EPC Material Quantity and Cost Estimation – Importance in Sales and Execution cycle

January 31, 2024


EPC Material Quantity and Cost Estimation

There are many challenges in the EPC industry. It can be broadly categorized into

i) managing pre-sales

ii) project planning and execution.

The most critical factors which affect both of them are – material BOQ management, making an accurate price based on costs and markup, proper cost estimation (this is extremely important where there is competitive bidding), and ensuring proper cost control while doing the actual project planning and execution.

Today, the material cost is 70% to 75%, whereas other costs (manpower and overhead) are in the range of 25% to 30%.

It is evident from above that accurate material costing is an absolute must to win any new business and also to execute projects in a profitable manner.

While proper material estimation (both item quantity and cost) is generally challenging, it is all the way more important for organizations, where they have to respond to their customer’s RFQ or bids with a profitability of less than 15%.

Today, most organizations estimate the material costs based on the following key parameters-

  • Standardized item master with accurate specifications
  • Standardized BOQ
  • Accurate historical costing
  • Ability to generate engineering BOM/BOQ right from the sales/RFQ stage
  • Ability to capture all the costs – rate, taxes, import duties, CHA, etc. for each item
  • Ability to control purchase target rates

Therefore, To be successful and profitable it becomes even more necessary to accurately track project progress, manage project costs and budgets, and manage the vendors & subcontractors for EPC industries.

To ensure this you need cutting-edge software which can control all parameters regarding the project cost and budget.

TouchBase® – a comprehensively designed Integrated Project Management Software helps you overcome all the above challenges and automates the entire project execution life-cycle and avails you to avoid project cost overruns.

How is it beneficial for you?

  • Accurate cost estimates right at the sales RFQ/Bidding stage
  • Automates the complete end-to-end Project Management life-cycle with cost control.
  • Procurement costs are controlled by approved rates by the management
  • Track all changes between any engineering BOM/BOQ changes.
  • Track all changes in cost sheets
  • Defines the approval mechanism if the budget gets exceeded or the target price given to the procurement team exceeds.
  • Overview of Budget cost vs. Actual expenses.
  • Cost control by measuring variances from the cost baseline & taking effective actions to achieve minimum costs.



ProductDossier - The makers of TouchBase PPM solution, that is configured specifically to the needs of your industry and organizational standards & processes. TouchBase is designed uniquely for external customer projects, new product development, and internal initiatives. TouchBase supports multiple project management approaches such as predictive, agile, and hybrid. TouchBase digitizes your project management landscape, offers holistic solution to your project management needs, and integrates with your existing enterprise applications such as ERPs, CRMs, Accounting, and others - to deliver one version of project management truth!