There are many tenders relating to the construction industry. This can include projects for design build, infrastructure and ongoing repair and maintenance. Within the UK, public sector buyers are limited by certain regulations when it comes to issuing and awarding contracts. If the contract is over a fixed amount, a tender process must be followed to evaluate bidders. The process will look at both price and quality in order to fairly award the contract.
The tender process is used to try and avoid firms from undercutting the competition’s prices by bidding low and cheap on contracts. The process evaluates the company on both price and quality elements. The tender is not just about a pricing schedule, it is also a number of quality questions.
The buyer will evaluate bidders on as series of topics, such as:
- Social value,
- Health and safety
- Safe Working
- Track record and experience
- Supply chain information
The bidder must be prepared to submit a strong quality section in the tender submission, as a lot more is considered then just the price. It is important to be aware of fellow competitors and what is new and emerging in the industry.
There are some variations in the tendering process when it comes to tendering for construction contacts.
- Open tendering: The contracts are first advertised, giving notice to anyone wanting to submit a tender. Open tender usually provides an equal opportunity to any organisation to submit a tender. This can give new or emerging suppliers a chance to win contracts. Some buyers may request a (pre-qualification questionnaire) PQQ or a pre-tender interview. This is to ensure that only those who are suitable for the request, submit a tender, in order to save time.
Open tendering can be single-stage or two-stage. Single tendering is the usual route and means that all the information needed by suppliers to submit their tender is available when tendering begins.
- Selective tendering: This route can give organisations a more relevant response to their contract. Pre-selected potential suppliers are invited to tender. They will be assessed and approved as being able to complete the required work
This process is more efficient than the open tendering process and is usually used for specialist works or where only a few firms would be suitable.
However, it can create bias in the tendering process and exclude smaller suppliers in turn and as a result can oppress competition and innovation.
- Negotiated tendering: This happens when the buyer contacts a single supplier. This may be because they’ve worked together in the past, or because they are specialists in the field. For highly specialist contracts or for extending existing contracts, negotiated tendering could be the best way forward. It can give confidence to the buyer and help reduce time and cost.
However, it can remove the competitive element of tendering. In some cases, such as on public projects, negotiated tendering is not permitted and contracts must be advertised.
Other variations include:
- Serial tendering: This where tenders are submitted based on typical quantities or schedule of works.
- Framework tendering: For constant construction contracts , clients may reduce timescales and other risks by using framework agreements. These allow buyers to invite tenders which will be carried out over a period of time, as and when required.
It is important to identify which process is being used for the chosen construction tender. It is important to understand what the process entails.
Tips on how to win
- Know your strengths and weaknesses
When tendering for construction bids, the bidder needs to go into the situation without rose-tinted glasses. The supplier ought to know what exactly they can deliver without any complications and what they would need support in. The bidder should be brutally honest about what they can celery demonstrate as being experts on. They should then proceed to tailor the tender to these areas.
- On time and on budget
A great deal of construction tenders are project based. Therefore it is important to demonstrate that the bidder has the processes and experience to implement the programme on time and project manage it to a successful conclusion – on time and on budget.
- Research the Client
Clients appreciate it when tenders include details above and beyond the tender documents they have created. By taking the time to research the buyer, the bidder can learn their strategic plans for the future and what is important to them. Furthermore, this information can be used to tailor the tender approach. Bidders should demonstrate their construction services or products to the buyer and how it will offer support in both delivery and achieving wider goals.