Bouwdata

How a simple cost breakdown can improve collaboration between client and contractor

In traditional bill-of-quantities structures, some essential cost items remain underexposed. Many clients don’t understand what “indirect costs” actually entail, and architects often prefer to quietly pass the topic to the contractor. They typically have little insight into what site preparation and project coordination truly involve. If, during a tender, site setup is explicitly listed as separate line items rather than vague “to be confirmed” notes, that’s already a win.

The Netherlands has taken a very different approach for years. There, contractors don’t price a detailed bill of quantities written by the architect. Instead, they measure from drawings and specs themselves and use the MLPES: Materials, Labour, Plant & Equipment, Subcontracting. These are the basis of a quote, followed by tail-end markups. This breakdown is only introduced in Stage 4 (Technical Design), when technical systems dominate the language of the process. Since 2013, Dutch professionals have also used the NEN2699 with cluster B5 for General Site Costs from the earliest design stages.

BouwData adopted this structure early on, but it wasn’t until the first edition of whitepaper I in 2022 that public clients like the Agentschap Facilitair Bedrijf endorsed the approach. Since then, more public bodies have adopted the method — step by step, with every new edition of the whitepaper.

The authors of the whitepaper don’t advocate full transparency of internal business operations, but they do promote a clear division between: – the production cost: all resources needed to physically build the structure, including general and overhead costs, – and the general site costs (GSC): preparation, site setup, and project management, also including overhead and profit margins.

This split makes all the difference. Production costs are fairly similar across contractors: they buy from the same suppliers and subcontractors, and a worker from Contractor A won’t be miraculously faster than one from Contractor B. The added value lies in the organisation — the GSC — where a contractor can show how they plan to carry out the work and demonstrate their efficiency. And possibly how they can complete it faster than anticipated, should the client choose them.

For the client, this breakdown offers insight into complexity. A greenfield project is something else entirely compared to one in a dense historic city centre. By making GSC visible as a separate item, complexity can be assessed and managed — even before execution starts.

🎯 Practical tip

📌 Five steps to build an GSC structure as contractor or early-stage cost consultant:

1. Request wage data per role from accounting (incl. employer contributions and benefits). Think: project director, project manager, site supervisor, junior staff, admin support…

2. Determine the team needed for off-site preparation and how much time it will take. Use step 1 to calculate the total wage cost.

3. Do the same for on-site project management.

4. Calculate site setup costs: – initial (containers, utilities, signage, etc.) – monthly costs (rent, consumption, maintenance) – dismantling and cleanup Ideally, create an internal database to track these costs across projects.

5. Add overhead and margin: – Overhead is based on last year’s results and stays constant per project. – Profit depends on your market position: high if your books are full, lower if you’re chasing work or prestige. – Risk markup reflects project complexity. 👉 Not an exact science, but a usable framework that leaves room for estimation and dialogue. 3