ABSTRACT
For various reasons it may be necessary at times to negotiate with a single contractor. There are basically two methods which can be used by the purchaser to negotiate the price. The first method is to compare the contractor's estimate for an item or section of the works with other prices already known to the purchaser or his consultant and which were obtained in competition for similar classes of work. The alternative method is to require the tenderer to separate out his commercial overheads and profit and to break his unit costs and quantities for each item of work into its component elements. The quantities of materials to be used will be checked by confirming the 'take-off' from the drawings with due allowance for wastage. Overtime payments to labour should be identified and if the contractor is making any percentage charge on top of his labour costs for any elements of overhead recovery should be related to basic costs only.
