What should UK tradespeople check before using AI for tender pricing?

AI can price up a tender in minutes. It can also price you into a loss in minutes.

Use AI tender pricing as a first draft, not a final price. Before you submit, check the documents it read, the quantities, the costs, the labour, your margin, the contract and the data you uploaded. Then get someone who knows the trade to sign it off.

In short

• AI is good at the slog: measuring, building rates and drafting the quote. It isn't good at knowing your costs.
• The big risks are underpricing, missing work in the spec, old material prices and contract terms that eat your profit.
• Check every key quantity against the drawings, and every price against a current supplier quote.
• Keep client and commercial details out of AI tools unless you know where that data goes.
• A competent person signs off the final price. AI speeds you up. It doesn't make the decision.

What is AI tender pricing?

AI tender pricing is using AI software to help build the price for a tender. That can mean measuring quantities off the drawings, working out labour, pricing materials or drafting the quote.

It saves a lot of evenings. But the AI only knows what you give it, plus whatever it picked up in training. It doesn't know your merchant, your gang or your overheads.

Why can't you submit an AI price as it is?

You can't submit an AI price as it is because AI can sound sure of a number that's wrong. It can misread a drawing, miss a line in the spec or use a price from two years ago.

A tender price is a promise you have to keep. If it's too low, you still have to build it for that money.

The main ways it goes wrong:

• Underpricing: the total looks fine but the job loses money.
• Missed scope: work in the spec or the addenda (changes issued during the tender) never makes it into the price.
• Old or made-up costs: AI may guess a material price or use a national average.
• Contract terms: retention, late-finish penalties and slow payment can wipe out a thin margin.

What are the 8 checks to make before using AI for tender pricing?

The 8 checks are: the tender documents, the quantities, current costs, labour, overheads and profit, contract and compliance risks, confidential data, and a final sign-off. Here's each one.

1. Has the AI got the full tender pack?

Only if you gave it every document. That means the drawings, the scope of works, the specification, any bill of quantities, all the addenda and the tender instructions.

Then check it hasn't skipped the awkward bits:

• exclusions (work you're not pricing);
• provisional sums (money set aside for work that isn't designed yet);
• access limits, such as working hours or no parking on site;
• temporary works, such as props or scaffolding;
• work by others that your work depends on.

2. Are the quantities right?

Not until you've checked them. Check every big quantity against the drawings and what you know about the site.

AI can misread a dimension, count something twice or forget waste, cutting, fixings and sundries (the small bits that add up). Don't trust it to read a drawing without checking. If the tender comes with a bill, see how a bill of quantities is laid out so you know what you're checking.

3. Are the costs current?

Only if they come from today's quotes, not the AI's memory. Get supplier quotations and check delivery charges, VAT, plant hire, subbie rates and whether the materials are actually in stock.

Use prices for where the job is. A generic UK average can be well off for your area.

4. Is the labour allowance realistic?

It's realistic only if it matches what your lads actually get done in a day. Check output per day, gang size, travel, setting up, site inductions, access, working hours, weather and snagging.

Don't forget supervision. And allow for what an employee really costs you, including paid time that isn't on the tools.

5. Does the price cover overheads, contingency and profit?

It should, but check with your own figures. Make sure the price pays for insurance, vans, tools, the office, finance, waste disposal and running the job.

Keep contingency (money for things that go wrong) separate from profit. If the contingency gets used, your profit should still be there. Our guide to what tendering really costs a small firm shows why the margin matters.

6. What contract and compliance risks are hiding in the tender?

Look for anything that costs you money or time once you've won. Check the building regulations that apply, health and safety and CDM duties, insurance, warranties, liquidated damages, retention, payment terms and how variations are agreed.

A few plain explanations:

• CDM is the Construction (Design and Management) Regulations 2015, the health and safety rules for managing building work.
• Liquidated damages are a fixed sum you pay the client for every day or week you finish late.
• Retention is money the client holds back until the job is finished and the defects period is over.
• Variations are changes to the agreed work. Check how they get priced and signed off.

Check which duties fall on you for this job. A subbie and a principal contractor have different ones.

7. Is it safe to upload the tender documents?

Only once you've checked the AI tool's privacy policy. Find out how long it keeps data, whether it trains on your uploads and who can see them.

Keep out client names, unpublished drawings, other firms' prices and anything commercially sensitive, unless you're allowed to share it and it's protected.

8. Has a competent person signed it off?

It should be signed off by an experienced estimator, tradesperson or the business owner. They check the build-up, the sums, the exclusions, the assumptions, how long the price is valid, the VAT and the final total.

Keep a record of where each rate came from and what you changed from the AI's draft. If the job goes wrong, that record shows how you got to the price.

How can AI underprice a job?

AI can underprice a job by missing small costs on every line, so the total looks sensible but comes out short.

Here's a worked example for a plastering job. The figures are made up to show the point, not market prices.

The AI came in 1,250 pounds under. Submit the 3,250 pounds figure and win, and you lose 1,250 pounds before you've made a penny of profit.

None of those lines looks crazy on its own. That's what makes it easy to miss.

What does UK guidance say about AI and tenders?

UK guidance doesn't ban AI in tenders, but it expects you to check the work and protect data. Three sources are worth knowing.

• The Cabinet Office's procurement note (PPN 017): it says suppliers' use of AI isn't banned when bidding. Central government buyers may ask whether you used AI, but those answers are for information only and aren't scored. Buyers may do extra checks, such as clarification questions or a site visit, to make sure an AI-assisted bidder can really deliver.
• The Information Commissioner's Office (ICO): its AI guidance helps you decide what personal information is safe to put into an AI system.
• The Health and Safety Executive (HSE): under CDM, contractors must have the skills, knowledge and experience to do the work safely. AI doesn't take that duty off you.

If you write the quality answers with AI too, the same rule applies. Our guide to bid writing in construction covers how buyers score them.

What should you check just before you submit?

Just before you submit, run down this list and don't send the tender until every line is done.

The golden rule: use AI to speed up estimating, not to make the final call. Your price should rest on checked quantities, current costs, real labour and a margin that makes the job worth doing.

Where Nexley fits

Nexley is AI software for UK tradespeople and small construction firms that prices tenders and measures take-offs. It also writes quotes and runs the back office through WhatsApp, linked to Xero, QuickBooks and Sage.

Nexley prices the bill from your own labour and material rates, not a generic price book. Quantities come off the PDF drawings, itemised so you can check any line against the drawing it came from. Margin and risk stay your call, and you review it before anything is submitted. See how AI tendering software works, or try it free for 7 days.

Common questions

Can I use ChatGPT to price a tender?

You can use ChatGPT or a similar tool to help, but not to set the final price. It's useful for listing what to price, checking you haven't missed a section or drafting the cover letter. It doesn't know your merchant's prices, your gang's output or your overheads, so every figure it gives needs checking against your own.

Do I have to tell the buyer I used AI?

Only if the buyer asks. Under PPN 017, central government buyers may ask whether you used AI to write your tender, but the answers are for information only and aren't scored. Answer honestly. Other public bodies can choose to follow the same approach, and private clients set their own rules.

Is AI tender pricing accurate?

AI tender pricing is only as accurate as the documents and rates you give it. Fed your own rates and current supplier quotes, it can get close fast. Left to guess, it can be well out. Treat every AI price as a draft until you've checked the quantities and costs yourself.

Can AI read construction drawings?

AI can read many PDF drawings and pull out quantities, but it can misread scales, dimensions and notes. Check the big quantities against the drawings yourself, especially on the lines that make up most of the price. A wrong area on a big item costs far more than a wrong count of small fittings.

Sources

This page is general guidance, not legal or financial advice. For a large tender or unusual contract terms, get the contract checked before you sign.

• PPN 017: Improving transparency of AI use in procurement (Cabinet Office, GOV.UK) (gov.uk)
• Artificial intelligence guidance (Information Commissioner's Office) (ico.org.uk)
• CDM 2015: contractors and their duties (Health and Safety Executive) (hse.gov.uk)