How is the estimated value of a contract calculated?

The estimated value of a contract in a public tender ... Uff, that's the heart of the matter, right? Basically, that figure sends in everything: from how much the tender must be advertised to what rules are applied. And yes, it also influences whether or not suppliers are encouraged to get into the ring.

How is that magic number calculated? Well, you have to add absolutely everything that will be paid during the life of the contract: premiums, extra payments, options ... Everything. Eye, that is not only what you pay, we must also consider what the contractor could win - typical canons, rates, whatever he falls by the contract.

If the contract is supplies or services, put in the calculator the full value of what you are going to receive or what they will do to you. In works, do not forget to add up to the last brick and any expenditure that arises along the way.

Now, super important: do not get creative to dodge the law. Nothing to juggle the numbers to skip the procedures required by the regulations. You cannot inflate or shrink the figure just because yes - there are rules for that, and skip them can get expensive.

Each country (and sometimes each city) has its own roll with these rules, so you do not trust only what you read on the Internet. Better consultation to someone who knows, or minimum, take an eye on legislation.

Ah, and don't forget to investigate how much it really costs what you are going to buy. You have to look at how the market is, the complicated thing of the matter, the risks ... because if you cannot fall short or spend with the estimate.

Of course, do not emotions thinking that this estimated value is what you will end up paying. It is a reference, not a sentence. In the end, you can get more expensive or cheaper, depending on the offers, negotiations and surprises that the process brings you.

In summary: calculating the estimated value of a contract is not five minutes. You have to think well, add everything and do it without traps. If you do well, the bidding process will go much more right and, hopefully, even competitive.