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BU504 Construction Management Guide and Example: Tender Pricing, Risk, and Ethics (Question 1)
Question 1 of BU504 Construction Management puts you in the seat of a main contractor’s estimator. Bumpy Construction Ltd wants to win the tender for a five-storey classroom block with a ground floor atrium for the University of Leicester, and you have to price two items: roof handrails and earthwork support. The figures are simple. The difficulty is that the estimator’s notes push you towards leaving things out to win the job, and the question is really testing whether you notice, and whether you can defend your decision commercially, legally, and ethically.
Most students on this module already work in construction: site managers, assistant quantity surveyors, estimators, and engineers studying part time. You know how tenders work in practice. This guide shows how to turn that experience into a 25 mark answer: how to lay out the build-up, how to argue the “work or risk” question using your own figures, and how to justify your approach from three perspectives. It ends with a worked example for a fictitious contractor that prices different items, so you can see the method without a model answer to Question 1.
BU504 – Construction Management
Question 1
A main contractor’s (Bumpy Construction Ltd.’s) estimator has been told by his managers the company is very keen to win the tender for the construction of a five story classroom block with a ground floor atrium area for the University of Leicester.
The estimator has to price for the following two items of work that are to be built into the tender price:
(i) Handrails to the perimeter of 150m of the roof for the 10 weeks period that workers will be required to work on the roof in an exposed manner.
(ii) Earthwork support to the excavation faces of 3,000m² of very deep basement excavations, 1,000m² of trench excavation of various depths and 500m² of shallow trenches for concrete kerb footings.
The estimator has made notes on how rates are to be priced, calculated some rates, and obtained a subcontract quotation which are discussed below:
A scaffold subcontract quotation has been obtained for providing the 150m of handrails to the roof for 5 weeks amounting to £7,500.00. The quote includes an extra hire period rate of £300.00 per week if the roof handrail is to be on-site longer than the 5 weeks period.
The estimator has calculated rates for providing earthwork support if required to:
The basement excavation faces at £20 per m².
The trench excavation faces at £10 per m².
The shallow concrete kerb excavation faces at £5 per m².
The estimator’s notes record the scaffold quote needs 5 – 10% adding because its fixed price term expires before the project commences.
The estimator’s notes record there is a belief that Bumpy Construction Ltd will be the lowest tender if the price does not include for providing all the excavations with earthwork support and that there is an additional competitive advantage that can be taken if Bumpy Construction Ltd does not price the roof handrail for the full 10 week period.
The estimator’s notes also make reference to what the ground report states about the ground conditions and the discussions that have been had with managers as to how to build this project and construct the roof work in a safe manner.
The estimator notes record that all the rates discussed above should have added 10 – 20% for overheads, profit & general attendance.
- Provide a build-up and explain how you as the estimator would calculate the figures for the roof handrails and the earthwork support that you decide needs to be included in the tender price. Also provide an outline of your reasoning as to why you have priced the work in this manner. (12 Marks)
- Explain and discuss by reference to your answer to this question whether an estimator is in fact pricing up “work” or pricing up “risk” when building up a tender price.
Ensure your answer to this part of the question makes reference to:
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Health and safety risk.
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Financial risk.
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Ethical considerations associated with taking measures to remove or minimizing risk.
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Marks)
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Discuss whether the course of action that you have proposed to take as an estimator can be justified as correct from:
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A commercial perspective.
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A Health and Safety perspective.
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An ethical perspective. (6 Marks) (Total 25 Marks)
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What Question 1 Asks You to Do
| Part | What you deliver | Marks |
|---|---|---|
| (a) | A build-up of the figures you’d include for the roof handrails and the earthwork support, and an outline of your reasoning | 12 |
| (b) | A discussion, by reference to your answer, of whether an estimator prices “work” or “risk,” covering health and safety risk, financial risk, and the ethics of removing or minimising risk | Not shown in the copy we reviewed; 7 by subtraction from the total |
| (c) | Whether your proposed course of action can be justified from a commercial, a health and safety, and an ethical perspective | 6 |
| Total | 25 |
Check the marks for part (b) on your own question paper. In the version we reviewed, the figure is missing, and 7 is what remains after parts (a) and (c).
The Scenario Facts That Drive the Marks
Read the scenario as a list of decisions you have to make, not just numbers to multiply:
| Fact in the question | The decision it forces |
|---|---|
| Operatives will work on the roof in an exposed manner for 10 weeks, but the scaffold quote covers 5 weeks, with an extra hire rate per week | How many weeks of handrail to price |
| The scaffold quote’s fixed price expires before the project starts, and the notes say to add 5 to 10% | Which percentage to use, and why |
| Three types of excavation, each with its own support rate | Which faces to support |
| The notes suggest the bid would be lowest without full earthwork support and without the full 10 weeks of handrail | Whether to follow that suggestion |
| The notes refer to the ground report and to discussions about building the roof safely, but don’t give the details | What you assume about ground conditions, stated clearly |
| 10 to 20% for overheads, profit, and general attendance on all rates | Which percentage to use, and why |
The question gives you ranges deliberately. Choosing a figure and explaining why is part of the reasoning marks.
Part (a): Building Up the Figures
Lay out each item as a table, one step per line, so the marker can follow every figure:
| Step | What to show |
|---|---|
| 1. Base cost | The quotation, or the quantity multiplied by the rate |
| 2. Extra duration | Additional weeks multiplied by the weekly hire rate, if you price beyond the quoted period |
| 3. Price uplift | The percentage you’ve chosen for the expiring fixed price, applied to the subcontract cost |
| 4. Overheads, profit, and attendance | The percentage you’ve chosen, applied to the adjusted cost |
| 5. Item total | The sum, to two decimal places |
State the order in which you apply the percentages. Applying the price uplift to the subcontract cost first, then overheads and profit to the adjusted figure, is a common and defensible order; whichever you choose, say so.
Outlining your reasoning
Your reasoning should tie every decision to a fact in the scenario and, where relevant, to a legal duty:
- Duration of the handrail. The Work at Height Regulations 2005 require employers to take “suitable and sufficient measures to prevent, so far as is reasonably practicable,” a fall liable to cause personal injury (reg. 6(3)). Ask what that means for the weeks when operatives are on the roof but the handrail isn’t priced.
- Earthwork support. Regulation 22 of the Construction (Design and Management) Regulations 2015 requires all practicable steps to ensure no excavation collapses, including “the provision of supports or battering” where necessary. The ground report matters here; since the question doesn’t give its contents, state your assumption about the ground and price accordingly.
- Percentages. Say why you chose the figure within each range, for example the level of inflation risk on the quote, or how competitive the bid needs to be.
Part (b): Pricing Work or Pricing Risk?
The question says “by reference to your answer to this question,” so use your own build-up as evidence. A clear structure:
- Your position. For example: an estimator prices both, but the decisions with the biggest consequences are about risk.
- Health and safety risk. Which of your figures exist to control a hazard rather than to produce part of the building? What happens to that risk if they’re priced short?
- Financial risk. What does your price uplift on the quote protect against? What does your overheads and profit percentage protect against? What would happen to the margin if you priced the shorter period and then had to provide the full protection anyway?
- Ethical considerations. If an estimator removes or minimises safety measures to win the work, who ends up carrying the risk? The RICS Rules of Conduct require members to act with integrity, act in the public interest, and take responsibility for their actions (Royal Institution of Chartered Surveyors [RICS], 2021), which gives you a professional standard to argue against.
Keep the three types of risk in separate paragraphs. Markers can then see that each required element is covered.
Part (c): Justifying Your Course of Action
Part (c) asks whether your proposed approach is justified from three perspectives. Give each its own short paragraph and a clear verdict:
- Commercial: acknowledge the cost. Including full protection may lose the lowest price position. Then weigh it against what happens if the protection has to be provided after winning the work at a price that didn’t include it.
- Health and safety: show how your approach meets the duties in the Work at Height Regulations 2005 and the CDM Regulations 2015.
- Ethical: show whose interests your approach protects, and how it fits a professional standard such as the RICS Rules of Conduct.
An answer that argues only one side is weaker than one that admits the commercial cost of doing the right thing and still justifies it.
BU504 Example: A Worked Tender for a Fictitious Contractor
Our BU504 example is a five page worked answer in the style of Question 1, for Northgate Build Ltd, a fictitious contractor tendering for a hospital car park. It prices different items with different figures: temporary edge protection to open deck edges, and earthwork support to drainage trenches, manhole pits, and pad footings in loose sand. It includes:
- A stated set of assumptions, with a reason for each percentage chosen
- Two build-up tables, step by step, with every calculation shown
- Reasoning that ties each decision to the scenario and to the relevant regulations
- A part (b) discussion that uses its own figures to cover health and safety, financial, and ethical risk
- A part (c) verdict from each of the three perspectives
- Comments explaining what each part of the answer does
Here’s part of its reasoning:
Leaving out the shallow footing support would reduce the bid by only £1,840 including overheads and profit, a small saving for a significant risk.
The example’s contractor, project, quotation, and rates are fictitious, and it prices different work from Question 1, so it can’t be used as your answer. It shows the layout and depth a full answer needs.
Download the BU504 worked example (.docx)
Plan It Around Your Work Week
- Evening one (about 1 hour): List the decisions the scenario forces, choose your percentages, and write your assumptions.
- Evening two (about 1.5 hours): Build both tables for part (a) and write the reasoning.
- Evening three (about 1.5 hours): Write parts (b) and (c), using your own figures as evidence, then check every calculation and reference.
Where Question 1 Answers Lose Marks
- The build-up shows only totals, not each step
- Percentages are chosen without a reason
- The order of the percentage uplifts isn’t stated
- No assumption is stated about the ground conditions
- The estimator’s suggestions are followed, or rejected, without explanation
- Part (b) discusses risk in general, without referring to the candidate’s own figures
- Ethics is mentioned in one sentence rather than argued
- Part (c) gives one verdict instead of three
- Regulations are named without the regulation number or a reference
Pre-Submission Checklist
- Every figure in part (a) shown step by step, in pounds to two decimal places
- A reason given for each percentage and for the duration of the handrail
- An assumption stated about the ground conditions
- Part (b) covers health and safety, financial, and ethical risk, using your own figures
- Part (c) gives a commercial, a health and safety, and an ethical verdict
- Legislation and professional standards referenced accurately
Frequently Asked Questions
What is BU504 Question 1 about?
Tender pricing. As the estimator for a main contractor, you build up prices for roof handrails and earthwork support, discuss whether estimators price work or risk, and justify your approach commercially, for health and safety, and ethically.
Do I have to follow the estimator’s notes in the question?
No. The notes suggest ways to make the tender cheaper, and the question asks you to decide what to include and explain why. Your reasoning is what earns the marks.
Which percentage should I use from the ranges given?
Any figure within the range, as long as you explain why. For example, link the uplift on the scaffold quote to the risk of the price rising before work starts.
Which regulations are relevant to Question 1?
For roof work, the Work at Height Regulations 2005. For excavations, regulation 22 of the Construction (Design and Management) Regulations 2015. Cite the regulation numbers you rely on.
How do I bring ethics into a pricing answer?
Ask who carries the risk if safety measures are left out of the price, and compare your decision with a professional standard such as the RICS Rules of Conduct.
Can I submit the BU504 example on this page?
No. It’s a fictitious contractor pricing different items with different figures. It’s for illustration only.
Want a Second Look Before You Submit?
If you’re working on site or in a commercial team and want structured assignment support setting out your build-up, arguing the work or risk question, or checking your references to the regulations, message Gradevia on WhatsApp at +1 564 544 6924 or email Support@gradevia.com.
Sources
The Construction (Design and Management) Regulations 2015, SI 2015/51, reg. 22. https://www.legislation.gov.uk/uksi/2015/51/regulation/22
Royal Institution of Chartered Surveyors. (2021). Rules of conduct (Global ed.; effective 2 February 2022). https://www.rics.org/content/dam/ricsglobal/documents/standards/2021_roc_en.pdf
The Work at Height Regulations 2005, SI 2005/735, reg. 6. https://www.legislation.gov.uk/uksi/2005/735/regulation/6