What three yards have to price

What makes a line item biddable

A yacht refit specification is not a work list. The work list comes from the captain and the chief engineer, but it is written in the shorthand of people who already know her. The specification is that list engineered into something a stranger can price without asking a question, which is what a refit tender asks of three strangers.

A line item is biddable when it carries five things: the system and where it is, by tag or compartment; the verb; the standard the work is measured against; who supplies the material; and what is handed over at close-out. The verb is the part most often left loose. Survey, overhaul, renew, replace in kind and replace to current standard are different jobs at different prices, and a yard reading "do the hydraulic ring main" picks one of them. Three yards will not pick the same one.

Written the other way round it reads: renew the ring main from the pump flat to the aft deck winches in 316 seamless tube, existing routing and bore, flushed to an agreed cleanliness class, pressure test witnessed, drawing at close-out. Three yards price that in an afternoon and the numbers describe the same work.

The exclusions and the format the bid comes back in

A refit scope of work defines what is in. Yards price what is out, and the gaps are where three quotes separate. Put a register at the back of the specification and make its return a condition of the bid: exclusions, assumptions and clarifications on the owner's numbering. A yard that has assumed the staging is by others, or the class surveyor's waiting time falls to the owner, has said where its number is thin. That register, not the covering letter, is the page to read first.

The format matters as much. Left to themselves, three yards return three free-format documents, items merged and renumbered, and the yacht refit specification can be faultless with the tender still not comparable. Instruct bidders to price on the owner's numbering, one row per item, in one currency, with a column marked included, provisional, excluded or clarification. No grouped totals. We return ours that way.

Then normalise. Add back to each bid the priced value of what it excluded and the others included, and three totals describe the same vessel leaving the same gate. Comparing refit quotes as returned compares three different vessels, and the cheapest before that arithmetic is often not the cheapest after.

What a bidder has to be shown

A yard prices what it is given; given nothing, it prices the risk. So the tender pack carries, to every bidder, a pre-refit condition survey, thickness readings where corrosion is plausible, the outstanding conditions of class, and the class and flag items falling due inside the yard period. Those last are the one surprise that is no surprise at all, readable months before the tender, which is where the tender pack begins.

The step that pays is spending money before tender. Lift a section of sole. Open one tank. Pull a panel of insulation at a known wet spot. It converts guesses into quantities, the difference between a provisional sum a yard has rated and one it has not.

Allowances, provisional sums and contingency

A refit contract uses these three words interchangeably and it should not. An allowance, or prime cost sum, is money inside the contract price for goods not yet chosen: the fabric, the galley appliances, the AV head unit. The work is certain, the selection is not, and it adjusts against the actual on substitution.

A provisional sum covers work whose extent cannot be seen until strip-down. It is defined when the scope is known and only the quantity is not, as with steel renewal in a tank priced per kilogramme against an agreed measurement method, and undefined when neither is. Defined sums are the safer of the two, because the rate was set while the owner still had leverage. Undefined sums reopen the negotiation with her stripped and immobile.

Contingency is the third, and it is the owner's money. It sits outside the contract price and the yard's quote; written into the yard's number it is no longer the owner's to withhold. With it belongs the rate card, agreed at tender and not at the moment of discovery: hourly rates by trade, overtime multipliers, the handling fee on owner-supplied gear.

Lift, lay days and staging as their own lines

These make two totals diverge without either yard doing anything wrong, so ask for them priced apart from the work. Lift and relaunch are two events and should be quoted as two, by tonnage. Lay days are priced in 24-hour increments, so the sentence that matters says when the clock stops.

Staging is three charges, erection, weekly hire and dismantle, and a yard quoting one of the three has quoted a third of it. Covered hall time is a scheduling commitment before it is a charge. On a coatings job the blast grit disposal line alone is worth reading. Class attendance is a line here too; when in the programme it has to be booked is taken apart in planning a yacht refit in Turkey.

Variation orders, and who signs them

A variation order is written, priced, dated and approved before work starts. It is still where disputes begin: on a live job the yard needs an answer today and the owner is in another country.

The fix is authority stated in advance. Name one representative on the owner's side, set a per-variation ceiling and a cumulative ceiling above which the owner signs personally, and agree a turnaround in the contract, a stated number of working days to price and the same again to answer. Anything slower and the yard is either standing idle at the owner's cost or working on a nod.

The captain knows her better than anyone and will still be aboard when the yard has gone, which is both the argument for him and the reason not to leave him alone with it. Test any adviser against incentive: a percentage of final cost rises with the overrun, and commission from a yard or a supplier is not independence. Write the role down and pay for it.

What a yacht refit specification cannot do

Emergent work is not a planning failure. Behind tank boundaries and under insulation, condition is unknowable until strip-down. What a good yacht refit specification changes is the price and the delay of that work, not its quantity. Where the rate, the measurement method and the approval chain are agreed, a steel find is settled before the shift ends. Without them it is a fortnight of correspondence with her open and the programme running.

Tendering this way costs this yard something. A bid returned on the owner's numbering with every exclusion written out takes longer to produce than a lump sum, and will not be the fastest quote back. On packages we have not opened we will not give a fixed price, which leaves the quantity risk with the owner. That is the honest place for it.

One thing it cannot settle is her customs position, which is a separate subject, taken apart in planning a yacht refit in Turkey. Eleven workshops here are on the yard's own payroll, so a variation crossing three trades is priced by one company rather than three. That does not make the find smaller. It shortens the argument about it.

Written at the yard in Tuzla. The tender conventions described here are the ones we ask for and the ones we price against.