How do you calculate TBM quote margin?

Subtract the required (cost) amount from the available (price) amount to get the gap, then divide by your reference basis. With a price of 125 and cost of 100, the gap is 25 and dividing by a 100 basis gives a 25% margin.

What is a good margin on a tunnel boring machine quote?

It depends on risk transfer. Pass-through equipment supply might run 8-15%, while a full bored-tunnel package carrying schedule and ground risk often targets 20-30% gross to absorb contingency. The default here returns 25%.

Should the margin basis be price or cost?

Dividing the gap by the price (the available amount) gives true margin; dividing by cost gives markup. They differ — a 25 gap on a 100 cost is 25% markup but only 20% margin on a 125 price. Set the reference field to whichever convention your finance team reports.

Why is gross margin not the same as net profit on a TBM job?

Gross margin only removes direct build or sell cost. Financing the multi-year build, escalation, warranty reserve, commissioning support, and bid contingency all hit below the gross line, so net profit on a TBM is usually well under the gross percentage.

How does this differ from markup?

Markup is profit over cost; margin is profit over selling price. The same 25 dollar gap is a higher markup percentage than margin percentage. Keep the two labeled clearly in a bid to avoid pricing a job low.

How often should I re-run the margin during bidding?

Every time a cost input changes — steel pricing, cutter tooling, freight, or a subcontractor quote — and at every gate review, because TBM cost stacks move fast and a stale margin can hide an underpriced bid.

Tunnel Boring & Heavy Civil Equipment calculator

TBM Quote Margin Calculator

TBM quote margin is the gross profit a contractor or OEM keeps on a tunnel boring machine bid, expressed as a percentage of a chosen basis. Estimators and proposal managers on heavy civil jobs use it to confirm a TBM package — cutterhead, shield, backup gantry, and erector — clears the threshold the business needs after subtracting build or sell cost. Because TBM contracts run into the tens of millions and span years, even a one-point margin slip is a large dollar number, so this check runs on every revision of a bid. It tells you whether the price you are about to submit actually protects the company once cost is removed.

What this calculator does

Estimate tbm quote margin for tunnel boring and heavy civil equipment using production-ready inputs so teams can measure the gap between available and required amounts.
Use it when tbm quote margin in tunnel boring and heavy civil equipment needs a clean margin number for a tunnel boring and heavy civil equipment go / no-go review.
It computes the gross margin percent on a TBM quote by subtracting required (cost) amount from the available (price) amount and dividing the gap by your chosen reference basis.

Formula used

Tbm quote margin amount gap = available tbm quote margin amount - required tbm quote margin amount
Tbm quote margin = amount gap ÷ reference tbm quote margin amount

Inputs explained

Available tbm quote margin amount: Enter available capacity, supply, revenue, savings, inventory, budget, or forecast quantity.
Required tbm quote margin amount: Enter required demand, cost, usage, commitment, service level, or target amount.
Reference tbm quote margin amount: Use the baseline demand, budget, standard, capacity, or forecast used for percentage reporting.

How to use the result

Use it on each draft of a tunnel boring machine proposal, after every cost update from manufacturing, freight, or subcontractor pricing, to confirm the bid still clears your target margin.
Simple gross margin ignores financing carry, escalation over a multi-year build, warranty reserves, and risk contingency — a 25% gross figure can shrink materially by the time a TBM is delivered.

Current U.S. benchmarks

Steel mill PPI stands at 348.53 (BLS, May 2026), up 6.7% from a year earlier. New factory orders are up 2.3% year over year (Census).

Common questions

How do you calculate TBM quote margin? Subtract the required (cost) amount from the available (price) amount to get the gap, then divide by your reference basis. With a price of 125 and cost of 100, the gap is 25 and dividing by a 100 basis gives a 25% margin.
What is a good margin on a tunnel boring machine quote? It depends on risk transfer. Pass-through equipment supply might run 8-15%, while a full bored-tunnel package carrying schedule and ground risk often targets 20-30% gross to absorb contingency. The default here returns 25%.
Should the margin basis be price or cost? Dividing the gap by the price (the available amount) gives true margin; dividing by cost gives markup. They differ — a 25 gap on a 100 cost is 25% markup but only 20% margin on a 125 price. Set the reference field to whichever convention your finance team reports.
Why is gross margin not the same as net profit on a TBM job? Gross margin only removes direct build or sell cost. Financing the multi-year build, escalation, warranty reserve, commissioning support, and bid contingency all hit below the gross line, so net profit on a TBM is usually well under the gross percentage.
How does this differ from markup? Markup is profit over cost; margin is profit over selling price. The same 25 dollar gap is a higher markup percentage than margin percentage. Keep the two labeled clearly in a bid to avoid pricing a job low.

Last reviewed 2026-05-12.