BCIS introduced a new methodology for estimating the latest All-in Tender Price Index results in 2019.
The method is based on a panel (Delphi) survey approach*. BCIS enlisted a panel of cost consultants (BCIS Tender Price Index Panel) from firms involved in multiple tenders in each quarter.
The BCIS Tender Price Index Panel is intended to measure the trend of contractors’ pricing levels in accepted tenders at commit to construct, i.e. cost to client, in the previous quarter (mid-quarter to mid-quarter).
A questionnaire asking for the individual panel members’ experience in the last quarter is completed. The questionnaire also requests contextual details for the responses: i.e. location, size, procurement routes, sector, building types.
The results are analysed and reported to the panel for discussion. A consensus increase in the Tender Price Index (TPI) is agreed following the discussion. The result is a percentage change in the quarter.
The index is used to provide an estimate of the BCIS All-in Tender Price Index in the latest quarter.
It is not published as a separate series.
The previous methodology for calculating the TPI was based on pricing levels in contracts, typically single stage, traditional procurement, average value <£5million, (minimum £100,000, no maximum). It excluded M&E and other specialist trades, for example facades. It assumed that this reflected the market for single stage design and build, and specification and drawing schemes. The project Indices were normalised for location, size and procurement. A decline in the number of available projects procured using detailed measurement made the methodology unreliable. BCIS still analyses project to produce a project index to provide valuable background to the trend.
BCIS also analyses projects into elements to provide benchmarking data.
The BCIS TPI panel members at inception.
The panel has continued to develop and the current panel is shown in the news item on the results published each quarter.
*The Delphi method is a structured communication technique or method, originally developed as a systematic, interactive forecasting method that relies on a panel of experts. The experts answer questionnaires in two or more rounds to arrive at a consensus.
Other BCIS price index Methodologies
BCIS have developed price indices for a range of clients and purposes and would be happy to discuss developing bespoke indices. Visit our BCIS Consultancy page
Currently we produce two other price indices using different methodologies