AN INTRODUCTION TO BILLING

Version: 2.0 (MK1.03) Last edited: 22 nov 2012 Designer: Rauno Randla

Summary
This module details how we produce bills of quantities from the measurements that have been
recorded. It addresses the general principles that would apply to billing a project under NRM style
contract sum analysis and includes detailed sections about:

1. What are Bills of Quantities and How they are Used?

2. Arranging Bill Sections Under an NRM Contract Sum Analysis (CSA)
3. Ordering of the Bill items within CSA section
4. Other Ordering Principles on which Bills of Quantities are Arranged
5. Using Software to Create Bills, Bill Sections and Bill Items
5.1 MBElite
5.2 Conquest
6. The Difference Between Hollow and Resourced Bills
7. Rules for the Description of Bill Items
8. Using Dimpads to Calculate and to Reference Locations
9. Compounding Quantities to Minimise the Number of Bill Classifications
10. When Additional Bill Classifications are Required
11. Recording Items that are not in the CSA or Specification or on any other tender document

12. Checking and Presenting Bills

The required and referenced appendices include various templates, examples and methodologies to
assist trainees with learning this module.

Status of Module
The module is still under development but contains the core information that is required

Prerequisites / Co requisites
Prior to this module trainee should have successfully completed the following trainings:
 The measurement NRM training module for the same work area that is still to be billed (to a
level where they have ‘reviewed’ training modules and have exhibited that they can measure
work correctly including previewing, self checking, planning modules).

Instructions to Trainees
This training should be completed as follows:

1 C:\Users\PC\Documents\Work\Trevor Sadd Asociates\Trainings\Billing\01 Billing - Introduction to Billing v2.docx

This module provides an introduction and overview to billing before learning how to use one of the
billing software and dedicated NRM billing training units.

The process of training billing is essentially a six stage process where trainees will:
1. Read through the Introduction to Billing module
2. Learn to use billing software
3. Work through first NRM billing module (module chosen by trainer)
4. Receive specific instructions from the divisional leader or lead estimator
5. Carry out first billing work
6. Read through the Billing Development module

A full description of the complete training module is included in Appendix A.

Instructions to Trainers
Whilst these are instructions for trainers they should also be read by trainees in order to promote
openness within the training process.

This module sets out the aspects, rules and procedures that everyone at TSA should follow.

It would make sense for trainees to start billing simple things. The trainer should look to train
trainees in the same areas that they have been trained to and have measured so the work and
ordering principles are clear to the trainee.

Ideally trainees should concentrate on their specialist (NRM) area until such time as they have
become proficient before learning to bill other sections. In this way they can link and understand that
section of tender documents with measurement and then billing techniques. This approach is
important as it will:

1) Reduce the overall time taken to measure and bill as it will be the province of a single mind
2) Accelerate the learning process and improve the quality of measurement and billing
3) Make it easier for trainee to reach at first an effective worker standard (EWS) and then work
towards an excellent standard
4) Allow for the business to grow in a managed way

Billing something that is unclear or measured by someone else requires much more experience and
risks errors being made. The training modules do not cover all the issues and eventualities that will
arise in billing and trainers should during the first stage of training ensure that trainees have the right
documents and the support that they need.

It is important that trainers satisfy themselves that the trainees understand the key elements of this
on first training before starting a project as it can reduce the amount of reworking required.

Training Period(s)
The approximate time (in minutes) required to complete this training including support, evaluation
and reporting.

2 C:\Users\PC\Documents\Work\Trevor Sadd Asociates\Trainings\Billing\01 Billing - Introduction to Billing v2.docx

Module / Sub Module Trainee Trainer

Billing – Introduction to Billing 180 30

Total Time 180 30

Module / Sub Module (Review) 30

Orienting (Hawthorne) Questions

The following questions are designed to direct the trainee towards key aspects or elements of the
module. The trainee should answer the questions as soon as the answers are found in the module.
1) What is the difference between a bill of quantities as prepared for the purpose of pricing
building works and an itemised list of materials?
2) Why is it important that the bill of quantities is prepared in accordance with the CSA?
3) List six ways in which a bill of quantities could be used to assist employer’s quantity
surveyors (EQS) and the building contractor’s team.
4) What are the differences between measuring, billing and estimating?

1 What are Bills of Quantities and how they are used?

The act of billing is one of creating a bill of quantities; this is often referred to as the BofQ, the BQ,
BOQ or the bill. The BQ is the document containing an itemized list (or schedule) of the works to be
carried out on a construction project. Each item in the list includes a reference, a description of the
work classification, a unit and a quantity. A quantity surveyor or estimator will add rates to a BofQ
when calculating the cost of the works to which the BQ relates. An example of a BQ can be found in
Appendix B.

A few definitions and examples of bills of quantities and their use can be found at the following
websites:
 http://en.wikipedia.org/wiki/Bill_of_quantities
 http://www.isurv.com/site/scripts/documents.aspx?categoryID=303
 http://www.arca53.dsl.pipex.com/index_files/admin3.htm
 http://homepage.ntlworld.com/derek.thomas/county0105/images/estimate.pdf

A BQ could be produced by the employers quantity surveyor (where the employer is the person
commissioning the works). If the employer does not provide a BQ the building contractor or their sub
contractors would need to measure the work themselves so they could rate the items for the
building works.

BQ are commonly used by employers, architects, quantity surveyors , commercial managers,

estimators, site managers, buyers and suppliers.

3 C:\Users\PC\Documents\Work\Trevor Sadd Asociates\Trainings\Billing\01 Billing - Introduction to Billing v2.docx

2 Arranging Bill Sections under an NRM Contract Sum Analysis (CSA)
The first thing you will need to know when you start with billing is what is required in terms of the
ordering of the bill. This order is usually defined in a document called the Contract Sum Analysis
(CSA).

Unfortunately the CSA is not the only term used to describe the ordering of bills, and we often have
to search for this ordering information in variously named documents such as:
 The schedule of works
 The summary of works
 The bill summary
 The tender sum analysis
 The employer’s requirements
 The pricing document
 Or any other variant of these words

The contract sum analysis (CSA) is usually created by the employer’s agent or quantity surveyor and
sets out the breakdown of the bill that they require to be able to compare the contractor’s tenders.

If the contractor pricing the tender does not supply their tender submission in this order their tender
may be excluded (not adjudicated or considered) by the employer.

Examples of some contract sum analysis documentation for actual projects can be found in Appendix
C.

On most first jobs the LE will usually give you an NRM type of CSA.

However, if it is not clear from documentation where to bill your items (under which bill section) –
ask your lead estimator.

Sometimes contractors may ask us to vary the layout of contract sum analysis; in which case the lead
estimator will define the order in which the bill is to be presented.

3 Ordering of the Bill items within CSA section

Contract sum analysis document defines the overall layout of the bill and the general ordering rules
for bill items.

Measuring and billing items under an NRM heading follows the alpha numeric code of SMM7. An
example of this NRM / SMM7 relationship can be seen in ‘Kaur’s Table’ where the biller would work
through the SMM elements in first the letter and then the number order. (The table can be found
here: U:\training\70 Training Modules\20. Measurement General\10. An Introduction to
Measurement\ NRM and SMM7 joined table).

The table itself only details the first level of SMM7 and trainees should refer to the actual SMM7
textbook for the ordering within individual sections. Most computer billing software and trainings
follow this order so most trainees will already be familiar with the system.

4 C:\Users\PC\Documents\Work\Trevor Sadd Asociates\Trainings\Billing\01 Billing - Introduction to Billing v2.docx

If the relationship between NRM and SMM7 is still unclear or you have questions talk to your
divisional leader or lead estimator to clarify your understanding.

Example bill pages for a complete project can be found in appendix B.

Whilst NRM is used on most building projects the employer’s agent or employer’s quantity surveyor (EQS) can select to order the works in
whatever format they see fit.

Examples of different bill types and orderings (and their associated rules) can be found in the appendix and include:
 Appendix D – Non NRM Elemental Bills

 Appendix E - Common Arrangement / SMM7 Bills

 Appendix F - Trade / SMM7 Bills
 Appendix G – As work Proceeds Bills

 Appendix H – Area Specific Breakdown

 Appendix I – Civil Engineering Bills – CSCME

 Appendix J – Highways Bills
 Appendix K – Other Bills

 Appendix L – POMI Bills

On smaller projects the EQS could dictate unusual ordering such as work schedules (see later). The good news is that everything is
ultimately measured in accordance with SMM7 (which will be familiar to those who have completed the NRM measurement modules) you
have to understand the layout of the bill sections and the ordering within those sections.

At this stage, trainees only need to be aware that there are different ordering methodologies. They will however need to familiarise
themselves with the relevant appendices if they need to bill in accordance with one of the other systems.

Using Software to Create Bills, Bill Sections and Bill Items

There are four basic ways of creating a bill section:

1) Importing a partial or complete excel bill based on documents provided.
2) Use part or complete bill section/element from a model or past project.
3) Create a bill by creating or selecting individual bill items in from libraries.
4) Any combination of the above.

See MBElite training videos later for further details.

Rules for Bill Item Descriptions

All bill items should include a general description of the measured item (in accordance with SMM7).

The billing software library descriptions will in most cases provide the majority of billing
requirements. Additional information that generally needs to be added to bill description:

 Reference to the NBS specification. i.e. M60/110 – refers to a specific type of painting that
the quantity of this bill item relates to. At the end of the job all materials specified in NBS
should be referenced in BQ, unless not required in SMM7 rules.

5 C:\Users\PC\Documents\Work\Trevor Sadd Asociates\Trainings\Billing\01 Billing - Introduction to Billing v2.docx

  Information required in relation to SMM7 rules. i.e. When excavating pits you need to state
the max depth and number of pits. Further details and examples given in NRM billing
modules.

Additional information that may be required to be added:

 Material type, name, manufacturer – Some Clients want this information to be added to item
descriptions. Production manager or LE will inform if this is required. You can add this
information yourself if you think that it will make the BQ more transparent and easily
checkable.

 Location information - Some Clients want this information to be added to item descriptions.
For example door references. Production manager or LE will inform if this is required. You
can add this information yourself if you think that it will make the BQ more transparent and
easily checkable. I.e. there was a sealant shown between stair and wall you should put in
description:
BUILDING FABRIC SUNDRIES
P22: SEALANT JOINTS
Joints
Silicone sealant on polyethylene backing rod; between stair and wall
Sloping
Section based examples and requirements stated in NRM billing modules

 References to drawings and other tender documents - add this information if it will make
the BQ more transparent and easily checkable. I.e.
E40: DESIGNED JOINTS IN IN-SITU CONCRETE
Construction joints
between trench foundation and RC beams; as
shown on section drawing SL13_Rev B

Any inaccuracies in the standard library item description should be removed.

In MBElite standard library there are a lot of information in some sections that is not required in
relation to SMM7.

Bill item description should be entered so that it would be easy to relate the BQ item quantity with
the measurement documents to understand quickly where the quantity came from and if it is
correct.

 Refer to a document “Guideline for using MB Elite Libraries”

How to Cross Reference Bill Items with measurement documents

See specific requirements and examples for each NRM section in NRM billing modules.

Resolving Problems and Conflicts – At the Bill Description Level

6 C:\Users\PC\Documents\Work\Trevor Sadd Asociates\Trainings\Billing\01 Billing - Introduction to Billing v2.docx

Contradictions in project documents are common (i.e. specification says one thing, drawings show it
differently and schedule describe the item in third way). If it is clear to you what the right solution is
you can put it to the bill but you must make a note to the Request For Information (RFI) form. If it is
not clear then you will also need to discuss the problem with your lead estimator. To help you make
the decision of which document to give precedence you will need to follow the following guidelines:
 Check the issue dates of the documents – latest document gets precedence.
 If there is difference in details of architects and engineers documents then usually engineer’s
document gets precedence.
 Think which option makes most sense, think about the possibility that architect may have
copied part of the specification or description from previous project without updating the
information.

As the documents are unclear you will still need to make a note to RFI about what you did so that the
lead estimator and client are aware of your logic. Then you will not be solely responsible if your
assumption have been wrong. With even a smallest doubt in your mind – consult your DL or LE.

Compounding Quantities to Minimise the Number of Bill Classifications

In TSA measuring process we intend to measure items in full enough details to make it easier for
someone else using the results to understand and check them. So for example we measure finishes
in different rooms separately, we measure internal walls within different floors separately etc. We
cannot use the same logic in our billing process as the industries requirements are different. We will
have to compound same type of work together. For example:
 All emulsion paint to walls has to be stated as a total quantity under one bill item.
 When you have different types of cavity walls but the inner leaf is always 100mm blockwork
then you will need to bill the total quantity of that inner leaf blockwork under one bill item.

Exclusions apply when we have special requests from our clients. Most often we will not need to
compound items if we have more than one building – then we might need to bill quantities
separately for different buildings (i.e. on new school we may need to bill work to sports hall
separately from work to classroom building).

To make compounded item quantity easy to check you will have to enter the quantities through
dimpad in full details as done in measurement reports with references to the areas where the dims
came from.

When Additional Bill Classifications are Required

In most of the cases we do not use additional descriptions to show the breakdown of the quantities.
However the lead estimator may ask you where it would be advantageous for example:
1) We believe a different rate should apply
2) We believe that it would assist the user of the bill in understanding the bill
3) It would be quicker and easier for us to complete the measurement.
4) It is easier to check and there is less risk of making an error

7 C:\Users\PC\Documents\Work\Trevor Sadd Asociates\Trainings\Billing\01 Billing - Introduction to Billing v2.docx

These extra items are only provided where the main contractor has requested such detail prior to
purchase of our service and the lead estimator has given you instructions in relation to this element
as every additional bill item that we include will create a cost to the main contractor in that:
 Subcontractors will need to price additional items which will then have to be analysed and
added to the bill
 Main contractors will have to rate and compare more items

Recording Items that are not in the CSA or Specification

It is biller’s responsibility to ensure that all items are measured and billed in relation to that
specification section. The biller is also responsible within this process to check for any items that are
included on plans (related to their section) but are not properly included within the specification
itself. We also need to bill items that are not specified in tender documents but are required in
accordance with NRM or SMM7 or common construction knowledge– i.e. render beads.

Checking and Presenting Bills

Appendices
APPENDIX A – Summary of Billing Trainings

APPENDIX B – Extract from Bill of Quantities

APPENDIX C – Example Contract Sum Analysis Sheets

APPENDIX D – Non NRM Elemental Bills

APPENDIX E – Common Arrangement / SMM7 Bills

APPENDIX F – Trade / SMM7 Bills

APPENDIX G – As Work Proceeds Bills

APPENDIX H – Area Specific Breakdowns

APPENDIX I - Civil Engineering Bills - CSCME

APPENDIX J - Highways Bills

8 C:\Users\PC\Documents\Work\Trevor Sadd Asociates\Trainings\Billing\01 Billing - Introduction to Billing v2.docx

APPENDIX K - Other Bills

APPENDIX L - POMI Bills

Comprehension Questions
1) Name at least 4 possible document names that may provide details of how the bill should be
laid out?
2) How the items within a bill section should be ordered?
3) In what circumstances would you modify the item description within the bill?

Project Review Questions

1) Were there any elements in the work that you billed that were not covered in the training
module. For example did you need to apply any other techniques or procedures that would
universally apply to other bills?
2) What other information did the lead estimator need to provide you with (that was not in the
training module) to enable you to complete your first billing project?
3) What modifications were required at the end of the billing process to correct the work and
how would you modify your procedures to ensure that those things were included.

9 C:\Users\PC\Documents\Work\Trevor Sadd Asociates\Trainings\Billing\01 Billing - Introduction to Billing v2.docx