Last edited 25 Jun 2019

Quote

In construction and other arenas of business, a quote (short for ‘quotation’) is a priced summary of the work to be undertaken, or the materials to be supplied or the services to be provided. Usually, the price stated in the quote will be an estimate that is based on information about the job given by a client to a supplier. In the UK construction industry, a quote may also be referred to as a tender or bid.

A supplier usually prepares a quote as a direct response to a client who may be considering using the supplier’s services. If the client finds the resulting quote acceptable, they may award the supply contract to that supplier. However, the client may obtain quotes from a number of potential suppliers, and may then select the most economically advantageous to them. This may not necessarily be the lowest priced quote - as other selection criteria such as track record, availability, duration of the works, staff capabilities and so on, may also be considered.

The accuracy of a quote will depend in part on the nature of the project involved. For example, the supply of 1,000 bricks would normally allow a supplier to write an accurate quote based on the known cost of bricks, the cost of delivery, any added tax and so on. In contrast, a quote for the construction of foundations may be a rough estimate as it may not reflect any unforeseen circumstances that may occur during excavation and which could cause delay and incur extra costs for the builder. Though an early estimate, it is still a quote that may be recalculated when more information about the project comes to light. It is important in this case for the contract to make clear who accepts the risk if the actual costs differ from the price given in the quote. For more information see: Fixed price.

A quote may have a time limit associated with it, after which the price offered is no longer available and may have to be re-calculated. It may also include terms and conditions of supply if there is no separate contract associated with the quote.

In the field of investment, a quote is the price of a share or investment commodity that is ‘quoted’ to a client and is the last (latest) price that the share was traded at.

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