A construction quotation, the financial offer, starts from the bill of quantities: each work item with its quantity and unit cost, plus overheads, supervision and profit, which give the unit rate you offer the employer. Once the contract is signed, the same bill becomes a periodic progress claim (payment application) that measures how much of each item is done. Enter the items in the "Construction quotation" tab, then switch to "Progress claim" and type the progress, and the generator works out work done to date, this claim, retention, advance payment recovery, Saudi VAT and the net amount due. The Excel download keeps live formulas so you can carry on with the next claims.
How the generator prices the quotation and the progress claim
The unit rate in the quotation is the item's direct cost (materials, labour and plant) plus the overhead percentage, then the profit percentage on top of that. Each item's amount is its quantity times its unit rate, and the items add up to the contract value before VAT. In the claim, each item's value is multiplied by its progress to date, and whatever was certified in earlier claims is subtracted.
Unit price = Cost × (1 + OH) × (1 + Profit) · Net = Current − Retention − Advance recovery + VAT
Construction quotation format
A construction quotation is laid out as a bill of quantities: item number, description of the work with its specification, unit of measurement (m³, m², linear metre, lump sum), quantity, unit rate and amount. Employers compare tenders by unit rate rather than by the total alone, because quantities change on site and the contractor is paid for the quantities actually built. That is why overheads and profit do not sit on a separate line in the quotation you send; the generator spreads them over each unit rate and keeps the breakdown for you in the Excel file.
The quotation should also state the construction period, how long the offer stays valid, what the price excludes (temporary power connection, permit fees), the proposed advance payment and retention rates, and whether prices include VAT. You can download the quotation in Word to add your covering letter and your company letterhead.
Estimating the cost of a construction project
The direct cost of an item is what it takes to build one unit: materials including wastage, labour wages and equipment hire. Overheads are costs that belong to no single item: the site engineer's and supervisor's salaries, accommodation and transport, insurance and bank guarantees. Under the table, the generator shows direct cost, overheads and profit on separate lines, so you can see how much of the contract value you keep.
| Component | Examples | How it enters the price |
|---|---|---|
| Materials | Ready-mix concrete, rebar, blocks, cement | Direct unit cost |
| Labour | Carpenters, steel fixers, masons | Direct unit cost |
| Plant | Concrete pump, excavator, scaffolding | Direct unit cost |
| Overheads and supervision | Site engineer, accommodation, insurance, guarantees | Percentage of direct cost |
| Profit | The contractor's margin | Percentage of cost after overheads |
Progress claim template in Excel
A progress claim, also called a payment application or interim payment certificate request, is the contractor's periodic request for the value of work done since the last claim; the supervising engineer checks it before the employer approves it. The "Progress claim" tab exports an Excel sheet showing, for every item, the quantity, unit rate, previous progress, progress to date, previous value and this claim's value, followed by retention, recovery and VAT as formulas. For the next claim, copy the "to date" column into "previous" and type the new percentages.
- Retention: a percentage held back from every claim as security for defects, released at provisional or final handover depending on the contract. The generator totals it under the table so you know your retention balance.
- Advance payment recovery: the advance paid at signing is recovered by deducting a percentage from each claim until it is repaid. The generator uses the advance percentage by default and stops once the advance is fully recovered; you can change the rate under "Full details".
- Performance bond: a bank guarantee the contractor provides at signing. It is separate from cash retention and is not deducted from claims.
VAT on progress claims and construction invoices
In Saudi Arabia, VAT on a claim is calculated on the value of work done in that claim, not on the net after retention, because retention is part of the work's value with payment deferred. If a tax invoice was issued for the advance payment when it was received, the advance recovery is deducted from the claim's VAT base so that VAT is not charged twice on the same amount. The generator assumes this and lets you switch it off; for the treatment of a specific contract, refer to the implementing regulations of the VAT law. The approved claim is the basis for the contractor's tax invoice; it does not replace it.
Technical and financial proposals for tenders
A tender usually asks for two envelopes: a technical proposal evaluated first, and a financial proposal opened only for bidders who qualify technically. Government tenders in the Kingdom are published on the Etimad platform. The financial proposal is the priced bill of quantities this generator produces. The contractor writes the technical proposal, which normally covers:
- Understanding of the scope and the method statement for each stage.
- The programme and key milestones.
- The proposed technical team with their CVs.
- Plant and equipment available for the project.
- Similar past projects and their completion certificates.
- The quality and site safety plan.
Do not put any price in the technical proposal; many tender documents disqualify a bid that reveals its price in the technical envelope.
Common mistakes in progress claims
- Entering progress for this period instead of progress to date, so the current work is counted twice or lost.
- Calculating VAT on the net after retention, which understates VAT on the work done.
- Carrying on deducting advance recovery after the advance has been repaid.
- Progress to date lower than the previous claim without a variation order to justify it.
- Adding new items to a claim without an approved variation order setting their price.
- Not keeping a running retention balance, which makes it hard to claim back at handover.
What to do after preparing the claim
Download the claim as a PDF and attach the evidence for the quantities: measurement sheets, inspection and acceptance records and site photos, then submit it to the supervising engineer. Once it is approved, issue the tax invoice for its value. For the next claim, press "Set up the next claim" so the to-date percentages move to "previous" and the claim number goes up, or download it to Excel and continue there. "Share as link" opens the generator with the quotation data for a colleague to review.
When claims are spread across several projects
One claim on one project fits in a spreadsheet. Once you run several projects, each with its own contract, advance, retention, material purchases and labour costs, it gets hard to see the profit on each project and what each owner still owes you. At Microtec we offer contractors across Saudi Arabia accounting software (ERP) that brings sales, purchasing, inventory, finance and HR into one system. Try it on the projects you are running now.