Project tendering is the practise of seeking bids from prospective construction contractors for the execution of certain construction work packages. It is a widespread way to obtain construction services. In this article, tender construction project, we take a look at the process involved and the options available to you.
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When would tendering be used in construction?
When it comes to construction procurement, materials, works, and services are normally acquired through one of four methods:
Traditional contracts — The most prevalent technique of construction management procurement, traditional contracts involve an agreement between the customer, consultants, and contractor. Following an open bidding process, the client selects the construction contractor to execute the project in accordance with the design and within the agreed-upon budget and timescale. This solution is low-risk because to the predictability of time and expense.
Design and build contracts — This technique of construction procurement entails the contractor assuming design and construction responsibilities. This provides the client with a single point of contact throughout the duration of the project and would be advantageous for projects in which the client is willing to pay a little more for one-on-one communication.
Management contracts — For management contracts, the customer independently hires designers and a contractor, paying the contractor a fee for overseeing the construction operations. With this strategy, there is less pricing certainty, as building can frequently begin before the design stages, with revisions made during the project. Nevertheless, the total procedure may be shorter than other construction procurement strategies.
Contractor-led contracts — In accordance with this strategy, contractors supply a design team to generate a concept design for the tendering process. This typically results in two construction teams advancing to the next phase of the project before a preferred bidder is selected. This technique may be more complicated than others, but it can ultimately save money.
The most frequent method of procurement in the construction sector is competitive tendering, and thousands of construction contracts are placed out to market annually in the United Kingdom.
What are the steps in the tendering process?
Invitation to Tender
In an invitation to tender, the work requested by the client will be specified. Typically, it will consist of an invitation to tender letter, preliminary information such as pre-construction details, the form of contract, a tendering pricing document, design drawings, and any other pertinent specifications for the works.
This will make it easier for prospective contractors to estimate the cost of the scheme and for clients to compare offers.
For clients who utilise pre-qualification questionnaires or pre-bid interviews, these must be completed before the invitation to make a bid is distributed. This ensures that only eligible candidates will be contacted to submit bids.
Occasionally, mid-tender interviews are undertaken to offer clients and suppliers with clarification. In the future, this will avoid the submission of incorrect bids and save time and money. Any additional information or changes to the tender documents must be shared with all prospective suppliers to ensure a fair bidding process. However, the supplier’s plans to meet the client’s requirements must remain discreet.
Submission of the tender
In response to the invitation to tender, suppliers will submit their proposals. This will include their price for doing the work and information on how they will satisfy the client’s specifications. Typically, tenders include:
- A finished document detailing the rates, prices, and totals of the supplier. On some projects, a contract sum analysis may be used instead.
- Schedule of prices. On larger projects where the nature of the job is known but cannot be estimated, it is meant to include all actions that may be required to complete the work. The price includes both profit and expenses.
- An initial Construction Phase Plan (CPP). The CPP describes the procedures for controlling the health and safety of construction project participants. The plan must be evaluated, altered, and updated during the duration of the project. It must be simple to comprehend and applicable to everyone on the premises.
- If asked, design proposals that detail the design professionals’ proposed solution to the client’s needs.
- A work schedule that specifies the order in which things must be completed.
- Essential project employees. Frequently, clients want to know who will be working on a project, so they request CVs.
- Management structure and command structure.
- Plant and labour resources and sourcing availability.
- Prior experience with previously awarded contracts.
- References from other completed works.
Tender Negotiations
After the client has selected a tender, or occasionally two tenders, a tender settlement meeting may be convened. These provisions allow the client to engage with their selected supplier to agree to or clarify any contract conditions. This may require submitting an updated bid or modifying the bid paperwork.
The parties must ratify any agreements achieved, as they will serve as the basis for future contract documents.
Contract engrossment and Execution
Contract engrossment is the incorporation of schedules and appendices into a signed agreement. Contracts may be engrossed by hand, when the parties sign the document, or under seal, in the presence of witnesses and as a deed. After agreement and signature, the contract is executed, at which time it becomes legally binding for all parties.
Different forms of tendering
Single-stage selective tendering and two-stage selective tendering are the two most popular types of tendering. Both procedures entail the invitation of bids from firms on a pre-approved or ad hoc list, selected because they meet certain minimum standards in general characteristics such as financial standing, experience, capability, and competence. The competitive factor of the bid is determined by both price and quality. In the two-stage procedure, the contractor is involved in the development of the project at an earlier stage, so tenders are submitted with limited information. In the second stage, the employer’s team collaborates with the preferred tenderer to produce the precise specifications. This strategy is preferred for complex projects in which the contractor may have substantial design input.
Other types of tendering include, open, serial, framework and public procurement.
How to Deal with Failed Tenders
After investing many hours on your proposal, it can be difficult to lose the contract. However, by requesting feedback on your bid, you stand to learn a great deal of valuable insight into how to enhance it for the future.
Consider requesting comments on whether your offer fulfilled all requirements; did it contain everything that was asked, such as pricing, strategy, and personnel details? You might also inquire directly why your bid was rejected and what your competitors did to get the job. The client may provide insight into what you could do differently the next time to improve your chances of success.
Requesting client input demonstrates your dedication to enhancing your organisation and demonstrates your sincerity in securing solid client relationships.
How we can help
We have a proven track-record of advising upon tendering for construction projects, from small residential developments to vast commercial projects. Not only does our construction department have extensive legal experience and knowledge of construction law but we also have the benefit of chartered surveying experts. We will guide you through the process and ensure all checks are carried out swiftly and efficiently and we firmly believe that with the right solicitors by your side, the entire process will seem more manageable and far less daunting.
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How to Contact Our Construction Solicitors
It is important for you to be well informed about the issues and possible implications of a construction tendering. However, expert legal support is crucial in terms of ensuring a positive outcome to your case.
To speak to our Construction solicitors today, simply call us on 0345 901 0445, or click here to make a free enquiry. We are well known across the country and can assist wherever you are based. We also have offices based in Cheshire and London.
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