There is this misconception out there that tendering is just providing a quote. It’s not. Asking for a quote vs running a tender process are two different situations. Of course, a quote is part of the tender. Quite a large part, but it’s not the only part of it. So let’s go over the process and all the things you might want to consider when thinking about tendering work, shall we?
Since my background is in private clientele specifically in high end residential building work I’ve had a chance to see both sides of the tender process, hundreds of times. And I mean here preparing a tender for contractors response as well as preparing responses on behalf of contractors.
Let’s establish first of all what a tender is and what it isn’t.
If we look into the definition: a tender ‘is a formal, structured procedure for generating competing offers from different potential suppliers or contractors looking to obtain an award of business activity in works, supply or service contracts…’
To put it in more human words - a tender is an offer. It consists of the price, but it should also consist of other elements such as timescales, start date, materials and products included, any exclusions, clarifications etc. A tender response is an opportunity for a contractor to market themselves and provide information and insight into why they are the best persons for the job.
More often than not the tender process is shaved back to bare bones where it all comes to price. The requirements packages are unclear, unfinished and often, sketchy. Which doesn’t really help with providing a price nor programme for the works. And it tends to end up with an email ping pong between the contractor and whoever is running the tender in order to clarify a multitude of issues. And that is time consuming, annoying and unnecessary. If only enough time and effort was put into the tender from the start.
It also tends to be difficult to compare offers if the information provided with the tender is poor or incomplete. As an example: if tender documents are as vague as ‘we want a table’ the responses / offers can be dramatically different. Someone can allow an ikea table, someone else could cost for a fully bespoke, handcrafted marble table and a third might not allow for it at all without further information. Comparing such responses is simply impossible.
How should projects be tendered?
The way we tender for projects varies slightly depending on the project itself. However the basic framework remains the same.
Step 1: Review the tender package you’re intending to send out and list things that are missing. It might be a detailed finishes schedule, perhaps the performance specification is missing for the Mechanical and Electrical installation, or maybe the external landscaping isn’t as comprehensively described as you wish. Be brutally honest with yourself. The more you can address right from the start the more of a chance that this won’t be an issue when you receive the tender responses. Have a plan on how to address these missing bits.
Step 2: Research and pre select potential contractors. Go broad. Choose 10-15 people. Speak to them. Are they interested in the project you have coming up? Are they interested and excited? What can they tell you about themselves? Let them sell to you. Let them take you on the journey ‘why should you give them a chance’.
Step 3: Do your due diligence on the contractors you’ve spoken to. Their interest in the project is a good start. But what’s their experience? Available references? Credibility? Financial situation? It might be worth asking all these in a Pre Qualification Questionnaire so you can compare and select the people you want to work with.
Step 4: Once you’ve chosen 4-5 contractors and issued the documentation for tender make sure you include things like: expected return date, how any questions or queries should be communicated, is there a date for site visits etc. The more pre organised you are, the easier the process will be.
Step 5: While in tender - don’t panic. There might be lots of questions coming back that you haven’t predicted. Address them one by one and submit responses to all contractors equally. There might be a contractor or two that will drop out. This is also normal. Things change. People might get another project or their personal situation might change and they won’t be able to fulfil the contract any more. Remember that submitting an offer is legally binding. Not everyone has to respond.
Step 6: Once you’ve received the offers, always confirm back to the contractors when you will get back to them with a decision. It’s not compulsory to do this in terms of the process but certainly in terms of good manners. Someone has just spent a lot of time considering your project and preparing a response for you. They deserve a little respect.
Step 7: Start comparing the responses. Price, timeframe, quality of the information provided. How does it tie in with the initial assessment you had of the contractors selection? Is anyone standing out for you? If not, don’t worry. There is usually a post tender clarification round as well. Meaning that - contractors are also people. They make mistakes. If they have missed something, something is wrong or stands out in relation to others - ask for clarification. It doesn’t hurt and can actually help you compare and understand the offers you have in front of you.
Step 8: Choose your contractor. And when you do, tell the contractors as soon as possible if they did or didn’t get the project. I often offer feedback as well - were they expensive, were they too cheap? What made me want to invite them to tender in the first place and why didn’t I choose them. That might be helpful but ONLY if requested. I never provide unsolicited feedback.
Step 9: Draft a contract and lock in your chosen contractor. Even if that’s just on the basis of a Letter of Intent.
Step 10: Start the project!
That’s my recipe for a tender process. It’s long, administration heavy and requires a lot of back and forth. However - it works. It allows me to gather the best offers for my clients. If you’d like to know more on how we could help you with your tender process you can check the details of this service here 👇👇👇