This discussion assumes that you are acting as a general contractor, home builder, or construction manager NOT performing work yourself in specific areas of work.
This process is very similar to the unit cost approach of the subcontractor system. However, in this discussion, you have absolutely NO pricing history from subcontractors, just a lump sum quote, making it almost impossible for you to rate the quote. Possibly the only way to qualify the quotes is to compare the quotes of all the subcontractors in a specific section or category of specifications in the hope that none of the subcontractors or vendors leaves anything substantial (material, equipment, or labor) out. your flat rate quote. Another BIG concern is, what happens when you don’t get enough quotes on a spec section or category? It goes without saying that this method is very risky for your company. Whereas, in the subcontractor system unit cost process, you may have some pricing histories from some subcontractors who have bid you in the past for specific types of past performance work. But equipped only with system unit price histories from those or a few contractors, it probably won’t give you the time or price analysis to help reduce risk to your business or make your bid more competitive. This is mainly because your mindset is in lump sum pricing expectation mode, rather than thinking or preparing your analysis in a scoping or system framework.
No offense here, but this process is probably one of the most widely used processes, so it is highly recommended that you explore a hybrid estimating process, scoping estimating process, or subcontractor system unit cost process. Those areas expand the concept of checking subcontractor quotes into a little more detail to help you qualify quotes. One of the reasons this lump sum quoting process is so popular is not because it is efficient or accurate. It is strictly a time saver as you are only requesting quotes or offers from vendors or subcontractors. Therefore, this process does not allow you to understand (what is in the job or offer), the elements of the offer (or the complexity of the project), or how you expect offers or quotes to reach you in the last two hours or twenty minutes of a competitive offer to an owner. Basically, most people accept the subcontractor’s low lump sum quote without really understanding the scope or scope of the quote, where the volatile risk to your company is really high. Some would agree that making an offer like this is like flying blind, so investigate the other estimation processes mentioned above.