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- From Quotes to Budgets
This week, I spent a fair amount of time turning contractor quotes into something much more powerful: a project budget. At first glance, they look similar—both are lists of costs. But in reality, they serve completely different purposes.
Table of Contents
Quotes vs. Budgets: Same Numbers, Different Purposes
A quote is the contractor’s perspective: their price for delivering the specific scope they’ve agreed to. It reflects their work, their risks, and their margins.
A budget, on the other hand, is the project manager’s responsibility. It must cover the total cost of ownership for the project, including not only the contractor’s scope but also design verification, commissioning, compliance, spares, and contingency.
One is transactional. The other is strategic.
Why the Gap Matters
The challenge lies in what’s not written. Contractors often exclude key elements such as electrical supply, stress analysis, or post-commissioning support. If those gaps aren’t captured in the budget, they become unexpected costs later—usually at the worst possible time.
That’s why every quote must be unpacked, tested, and restructured. A Work Breakdown Structure (WBS) is the best tool to do this: align each cost to a clear activity, identify missing pieces, and ensure no critical scope is left floating.
The Shift in Mindset
Here’s the distinction I always remind myself of:
A quote is about scope and price.
A budget is about responsibility and outcomes.
As project leaders, we don’t stop at collecting numbers—we interpret them, connect the dots, and fill the gaps. That’s how we build budgets that hold up under both approval and execution.
Action Step
Next time you receive a contractor’s quote, don’t stop at the bottom line. Map it against your WBS, highlight exclusions, and transform it into a budget that reflects the true cost of delivering the project successfully.
That’s where leadership shows—not in repeating what’s written, but in anticipating what isn’t.
P.S. If you’d like to explore more about project management and productivity, visit vandersonbaril.com.
Until next Saturday!