Steel Frames
Every estimator in Australia has watched a quote get awarded on price when the price itself made no sense. The lowest tender wins because tenders are made to be compared, and comparing them on a single line (the number) is the easiest decision anyone in the chain can make. It is also, demonstrably, the decision that costs builders, developers and clients the most money across a project’s life.
The data makes the point in a few lines. Australia recorded 3,472 construction company insolvencies in the year to 30 June 2026, representing 24.5% of all Australian company insolvencies that year (ASIC data, via QUT analysis). Fixed price contracts signed below sustainable cost have been the single most cited cause. Variations on uncontrolled contracts commonly cause cost overruns of 15 to 30% beyond the original contract price (Contracts Specialist, NSW). Legal guidance routinely recommends builders and clients carry 10 to 15% contingency on a new home and 15 to 25% on renovations, specifically because thin quotes do not stay at their quoted price.
This blog takes apart the mechanics of what actually happens when a project is awarded on cheapest price alone. The anatomy of what makes a quote dangerously cheap, the escalation curve that follows, the insolvency risk if the builder runs out of margin before the handover, a worked example of how the saving disappears, the red flags experienced estimators look for, and the questions to ask so a cheap quote never gets through the gate on your project in the first place.
Quotes do not usually arrive labelled “incomplete.” They arrive looking confident. The things that make them dangerously cheap are what is left out, not what is written in. Six specific gaps account for most of the trouble.
The quote covers 80% of what the project needs, with the remaining 20% written as either “to be confirmed,” “excluded,” or simply absent. This often shows up as a line like “frame supply only” without clarifying whether that includes wall frames, floor frames, roof trusses, bracing, connections, and any specialist elements like steel lintels, beams or structural columns.
Typical warning language to look for: “supply only,” “frame as per preliminary drawings,” “based on information provided,” “excludes items not shown.” Each of these phrases is doing work. Each one is a hole the price will leak through later.
Frame design and engineering are a cost that someone has to carry. If a quote does not explicitly include engineering certification, structural design and the production of signed, stamped drawings, those costs will show up later as either a variation to the supplier or an invoice from a separately engaged consulting engineer.
For steel framing specifically, a Reg 126 compliance certificate from the structural engineer is a specific documentation requirement for most Victorian projects. If it is not named in the quote, it is likely not included. The cost of commissioning one separately typically adds thousands of dollars and weeks of programme.
“Supply only” quotes exclude the labour to install the frame on site. For a prefabricated steel frame, the install can be done efficiently by a small crew with proper erection drawings, but if the drawings are not included and the install is not quoted, the builder either absorbs the cost through their carpentry or framing crew (at carpenter rates) or scrambles to find a dedicated steel frame erector mid project.
Sometimes the exclusion is explicit (“installation by others”) and sometimes it is implicit (installation is simply not mentioned either way). Both are dangerous. Both make the quote look cheaper than it is.
Transport and delivery of a prefabricated frame from the fabrication facility to the construction site is a real cost. On a Melbourne metro project it might be modest. On a regional Victoria project it can be meaningful. If delivery is not quoted inclusive, it will be charged separately, often at a rate the client has no visibility of until the invoice arrives.
Some quotes get around this by quoting “ex factory” or “FIS not included” (free into store). Builders who are unfamiliar with the terminology can miss the implication at tender time.
Every steel framing project will have minor rectification items at some point during the build. A good supplier builds a rectification allowance into their price and provides a defects liability period. A cheap quote may contain neither, leaving the builder to foot the bill for every minor out of tolerance item that arises on site.
The absence of a defects liability period is a significant red flag because it signals a supplier who either cannot afford the risk or does not expect to be around to carry it.
Lead time is sometimes quoted at the lower end of what the supplier knows is possible, as a way of winning the job on perceived speed as well as price. The reality on site usually diverges from the quoted lead time by weeks. The resulting delay cascades through the programme: concrete pouring sequences, roofing scheduling, lockup milestones, and the trades that follow.
An unrealistic lead time is not usually a lie, but it is almost always optimistic. The cost does not land as a direct charge; it lands as holding costs, overtime for downstream trades, and schedule slip on the client’s own commitments.
A cheap quote does not stay cheap. The escalation starts the moment the contract is signed and typically runs through four phases, each with its own cost dynamic.
Phase 1: Early scope clarification. Within the first few weeks of a project, the gaps in a thin quote start surfacing as requests for information (RFIs). The supplier asks for engineering details they assumed would be provided. The builder asks about elements they thought were included. Each clarification is either absorbed by one party (unhappily) or becomes a variation. According to Contracts Specialist, NSW, variations are categorised as additive (new scope), deductive (removed scope), or substitutive (changed scope). Additive and substitutive variations are what builders and clients worry about, because they come with upward price pressure.
Phase 2: Mid build variation accumulation. As the project runs, further variations accumulate. A missed engineering detail here. An omitted connection there. A delivery charge that was not quoted. Each individually is small. Together they can push a project 15 to 30% above the original contract price, which is why legal guidance recommends builders carry 10 to 25% contingency (Contracts Specialist, NSW; Stonegate Legal, Queensland).
Phase 3: Programme slip and knock on cost. As variations accumulate, the programme slips. Trades that were scheduled around a particular framing completion date have to be rescheduled, often at a premium. Site establishment, supervision and finance interest continue to accrue. The HIA has noted that build time blowouts are now a major contributor to overall cost escalation. A project running two months late can quietly add 2 to 4% to total cost in holding items alone.
Phase 4: Dispute and legal. When variations become too large to absorb politely, projects move into dispute territory. Payment claims, security of payment legislation, adjudication, and in the worst cases, litigation. Legal fees are expensive, management time is expensive, and the damage to supplier relationships for the next project is harder to quantify but very real.
The cost of all four phases is almost never captured in the original tender comparison. It arrives afterwards, line by line, and the project that was awarded on cheapest price often ends up more expensive than the quote that was declined for being too high.
Why experienced estimators are now flooded with work. Build Metric, an estimation firm, received over 1,500 enquiries from Australian builders in the six months to July 2026, with monthly enquiries rising from 158 in February to 398 in June (newshub, 2026). The surge reflects a sector that no longer has the in house capacity to properly price its own work, and that is increasingly aware of what thin quoting is costing them.
The worst case outcome of a cheap quote is that the supplier or builder who gave it never finishes the work, because they cannot afford to. Over the last four years this has stopped being a rare worst case and started being a routine category of project risk in Australia.
The headline numbers. Australia recorded 3,472 construction company insolvencies in the year to 30 June 2026, representing 24.5% of all Australian company insolvencies (ASIC data, via QUT analysis). Construction has been the single largest insolvency category for several years running. In the 2024/25 financial year, 2,832 building and construction companies collapsed, up 29% on the prior year (RSM Australia).
Why fixed price contracts are breaking builders. Analysis by QUT’s Dr Lyndall Bryant and Dr Amanda Bull identifies the common pattern: builders signed fixed price contracts before or during the COVID period, with margins calculated against the input and labour costs of the time. When costs then rose sharply through 2022 to 2026, the fixed price locked those builders into losses on every live contract. There is no mechanism within a conventional fixed price contract to recoup those losses mid build, and no realistic way to make them up on future projects fast enough to stay solvent.
Who pays when a builder collapses mid project. When a builder enters external administration, incomplete projects stall. Deposits already paid may be partially or wholly lost (home warranty insurance covers some of the exposure in some states, but not all of it). Subcontractors who worked on the project may be unpaid. The client typically has to procure a new builder to complete, usually at significantly higher cost because the work is now partial completion rather than a fresh build, and because the risk profile is elevated.
The damage radiates. Subcontractors who were underpaid by the collapsing builder often go under themselves. Suppliers who extended credit to the failed builder tighten terms for everyone else in the market. The whole sector’s cost of capital rises on the back of the collapses, which feeds back into every quote the surviving builders write.
The connection to cheapest price. Builders who routinely win on cheapest price are the most exposed to this cycle. If their quoted price does not include a realistic margin for risk, cost escalation, variations, warranties and defects liability, there is nothing to absorb the shock when input or labour costs move. They become the next cohort of insolvency statistics.
From a client’s perspective, awarding a project to the cheapest quote now carries a non trivial probability that the builder will not be there to finish it. The best price in April 2026 may be irrelevant by August 2026 if the builder is in liquidation. This is the ultimate reason cheapest price is often the most expensive decision.
To show how this plays out in practice, consider a hypothetical six unit townhouse project in Melbourne going out to tender for the structural steel framing package in mid 2026. Two quotes come back.
Quote A: $180,000. Headline figure, lowest tender. The quote is one page. It states “steel frame supply as per preliminary drawings,” with no itemisation, no engineering line, no delivery line, no erection line, no mention of a Reg 126 certificate, and a lead time of “4 to 6 weeks.”
Quote B: $200,000. Three page quote. Itemised scope: wall frames, floor joists, roof trusses, bracing, connections. Explicitly includes 3D BIM design, structural engineering, Reg 126 certification, delivery to site, erection drawings, and a two week rectification allowance. Lead time quoted at 6 to 8 weeks.
On pure price, Quote A wins by $20,000. Here is what tends to happen through the project.
At week 2 of design coordination, Quote A’s supplier asks for engineering input that was not in their scope. The builder has to engage a structural engineer separately. Additional cost: approximately $8,000. Delay to shop drawing issue: 2 weeks.
At delivery, Quote A invoices $4,500 for transport to site, which was not quoted. Not disputed, because the quote did not include it. Running total variation: $12,500.
At erection, Quote A’s “supply only” scope means the builder’s carpentry crew installs the frame. At carpentry rates, the install takes 10 working days vs the 5 days a specialist steel frame install crew would have taken. Additional labour cost: approximately $7,000, plus a 1 week programme slip. Running total variation: $19,500.
During installation, two trusses arrive out of tolerance. Quote A has no rectification allowance. The replacements take 3 weeks to re fabricate, during which the project cannot be weathertight. Programme slip extends to 4 weeks total. Additional cost in holding, finance interest and downstream trade overtime: approximately $12,000. Running total variation: $31,500.
At completion, no Reg 126 certificate was in Quote A’s scope. The builder commissions one separately through a structural engineer. Additional cost: approximately $4,500. Running total variation: $36,000.
Final cost of Quote A to the builder: $180,000 original + approximately $36,000 in variations and knock on costs = $216,000, delivered 4 weeks later than Quote B would have been.
Final cost of Quote B: $200,000, delivered on the original programme, with the Reg 126 certificate in hand, with the install done cleanly by a specialist crew, and with the rectification handled under the original quote.
The $20,000 saving at tender turns into a $16,000 overrun on direct cost and 4 weeks of programme slip on top. The overrun is before accounting for the knock on effects on other trades, holding cost on the land, finance interest, or the client’s view of how the project was managed. The headline cheapest quote is quietly the most expensive one.
Numbers in this example are illustrative, not actual. The pattern they illustrate is the one playing out on live Australian projects every week.
Experienced estimators and procurement managers develop a sense for which quotes are going to escalate. The patterns are consistent. Any one of these flags in isolation might be innocent, but two or more clustered in the same quote should trigger a conversation before any contract is signed.
The estimators who do this well are not looking for perfect quotes. They are looking for the quote where the things that are missing from the page are small enough and surprising enough to not matter, and where the supplier’s answer to “what have I missed?” is credible.
The only way cheapest price comparisons stop punishing projects is for the comparison to be on genuinely like for like terms. That means specifying up front what the quote has to include, so no supplier can win by leaving things out.
A tender request for a structural steel framing package should specify:
Complete scope definition. Set out explicitly which elements the quote is to cover: wall frames, floor joists, roof trusses, lintels, beams, bracing, connections, specialist elements. Reference the drawing set at a specific revision. Call out any items the supplier is to design and engineer themselves.
Mandatory inclusions. State that the quote must include design, structural engineering, 3D BIM modelling where required, shop drawings, Reg 126 certification, delivery to site, erection drawings, and a defined defects liability period. If any of these are to be excluded, require the supplier to state it explicitly rather than leaving it to inference.
Itemisation requirements. Require the quote to be itemised rather than lump sum. Separate lines for materials, fabrication, design and engineering, delivery, and installation (if included). Itemisation lets you compare like with like and spot where a cheap quote is cheap.
Lead time with milestones. Require the quote to state design time, fabrication time, delivery time, and the realistic earliest site delivery date. Ask what else is in the fabricator’s queue so the lead time can be sanity checked.
References and insurance. Request at least three recent reference projects of similar type and scale, with the ability to speak to the builder or client. Request confirmation of public liability and professional indemnity insurance cover.
Payment terms. State the payment terms the project will accept (typically a schedule aligned to design completion, fabrication completion and delivery, with retention on defects liability). Any supplier wanting materially different terms is signalling something.
Variation handling. State how variations will be priced (rate schedule, cost plus with cap, or lump sum per variation) and who approves them. A clear variations regime removes a lot of the discretionary cost drift that thin quotes create.
With these requirements in the tender request, the comparison stops being between a one page cheap quote and a three page proper one. The one page cheap quote either becomes a three page quote or the supplier declines to tender, which is itself useful information.
For a deeper breakdown of what to look for in a reliable supplier beyond the quote itself, our guide on how contractors and distributors choose a reliable steel stud supplier sets out the full qualification process.
CMC Steel Solutions quotes are structured to pass a like for like comparison test cleanly. The specifics:
Itemised value for money quotation. Our estimators prepare a quote that is detailed, inclusive of all construction elements, and broken out by line so the scope is unambiguous at tender time. There is no “supply only” ambiguity to resolve later.
Design and engineering included. 3D BIM modelling, structural engineering, shop drawings and site specific design are part of the standard scope. This removes the risk of commissioning a separate engineer at variation rates mid build.
Reg 126 structural frame certification included. The structural frame inspection and reg 126 certificate are issued on completion as part of the standard scope. For a Victorian project, this is a tangible compliance saving.
Delivery to site included. All deliveries to the project site are included at no additional cost. There is no transport variation to argue over when the first load arrives.
Erection drawings included. Full erection drawings are issued with the delivered frame so install crews have what they need without a round of RFIs or guesswork on site.
Rectification allowance built in. Minor rectification items within tolerance limits are handled under the original quote, not treated as new scope.
Established track record. Over 10 years delivering steel framing to residential, commercial, industrial, childcare and NDIS projects across Melbourne and Victoria, with repeat business from major Australian builders and developers. References available on request.
For builders tendering a steel framing package and worried about the cheapest price trap, this is the specification sheet to compare any other quote against. If a competing quote omits any of these items, that is the gap that will show up as a variation. More on how to evaluate steel frame suppliers more broadly in our guide to how contractors and distributors choose a reliable steel stud supplier, and more on the technical scope of what we fabricate on the prefab steel frame page.
A reference tool for scoring any steel framing quote against the items a complete scope should cover. Tick each item that is explicitly addressed in the quote; items left ambiguous or omitted are red flags that will likely become variations.
Item | Explicitly included? | Notes |
|---|---|---|
Full scope of frame elements itemised (walls, floors, trusses, bracing, connections) | Yes / Partial / No | Watch for “supply only” ambiguity |
3D BIM modelling or shop drawing design | Yes / No | If No, who is doing the design? |
Structural engineering certification | Yes / No | Cost of commissioning separately is thousands |
Reg 126 compliance certificate (Victoria) | Yes / No | Required for most Victorian projects |
Erection drawings issued with delivered frame | Yes / No | Needed for install crews |
Delivery to site included | Yes / No | Transport is a real cost line |
Installation and erection scope | Yes / No / Excluded | If excluded, who installs? |
Rectification allowance for minor out of tolerance items | Yes / No | Absence signals risk shift to builder |
Defects liability period defined | Yes / No | Standard with established fabricators |
Lead time stated with milestones (design, fab, delivery) | Yes / No | Short lead times warrant verification |
Payment terms stated and reasonable | Yes / No | Heavy front load suggests cash flow pressure |
References from recent similar projects | Yes / No | Three recent references minimum |
Public liability and professional indemnity insurance disclosed | Yes / No | Routine for legitimate fabricators |
Variation pricing regime stated | Yes / No | Caps discretionary cost drift |
Any quote scoring below about 10 “Yes” ticks across this list is almost certainly cheaper than it looks on the headline figure. Any quote scoring 12 or more is likely to deliver the price it quoted.
Two reasons, usually in combination. First, suppliers interpret vague scope language differently, so what looks like the same job on paper is actually different jobs priced by different suppliers. Second, some suppliers price for completeness and some price to win, leaving items out knowing they can bill them as variations later. The widest variance is almost always a sign the scope was not specified tightly enough.
No, but it is almost always a reason to ask more questions before signing. Occasionally a supplier has genuine capacity utilisation reasons to quote keenly, or has existing efficiencies on the specific project type. Far more often, the quote is cheap because it is incomplete. Verify by checking the quote against the checklist above and asking the supplier directly what is excluded.
As a minimum: full itemised scope, 3D BIM or shop drawing design, structural engineering, Reg 126 certification for Victorian projects, erection drawings, delivery to site, installation scope (or explicit note that installation is excluded), a rectification allowance, a defects liability period, lead time with design, fab and delivery milestones, payment terms, and reference projects. See the comparison checklist above for the full list.
Usually the builder or client. Variations covering items that were not in the original scope are typically chargeable to the party that holds the contract to the supplier. Legal guidance from Contracts Specialist, NSW is that variations should be approved in writing before work begins, with clear pricing. In practice, variations often arrive informally and get resolved only at claim time, when the leverage sits with the supplier doing the work.
For most Victorian structural framing projects, yes. The Reg 126 compliance certificate from the structural engineer is a specific documentation requirement for the Victorian Building Authority framework. Not every project requires it in the same way, but it is routinely required and is a specific line item worth confirming at tender time rather than discovering at certification time.
Sometimes yes, but at the supplier’s terms rather than yours. Once a contract is signed, the leverage sits with the party doing the work. A missing engineering line or delivery line will be filled, but at a price the client has limited room to negotiate down. The time to specify inclusions is before the award, not after.
Legal and quantity surveying guidance in Australia generally suggests 10 to 15% for new homes and 15 to 25% for renovations (Contracts Specialist, NSW). On a project procured on thin quotes, higher is safer. On a project procured on properly scoped like for like quotes, lower is realistic. The quality of the tender process directly affects the contingency the project needs.
If you want a steel framing quote that scores a clean pass against the checklist above, with every inclusion stated at tender time and no variations hiding in the fine print, call CMC Steel Solutions on 1300 285 566, email info@cmcsteelsolutions.com.au, or get in touch online. We will walk through your project scope and prepare a quote that will not need to be renegotiated after the contract is signed.