The tender stage in construction is when a client invites multiple contractors to submit their proposals and bids for the construction project. During this process, the organization that requires specific goods/services would provide details of the project including its scope, requirements, specifications and budget in a document called “Tender Document.” Contractors review these documents and prepare their bids to execute the work.
Once the bids are received, organizations conduct a thorough evaluation process. This includes comparing the submitted proposals against established criteria and shortlisting contractors. Once the final decision has been made, a contract is awarded to the selected contractor. The contract award announcement is then made public to inform potential suppliers of the winning proposal.
Depending on the type of project, tendering processes can differ. For example, a negotiated tender allows the client to select contractors with whom they’re comfortable working and involves a collaborative process that may lead to cost savings for both parties.
Two-stage tendering is another method that’s often used for projects with a high design or risk profile. This process allows the organization to obtain contractor input early and can accelerate timelines by ensuring a greater degree of design and cost certainty.
Whether a project is subject to single-stage or two-stage tendering, the tender documents should be broken down into smaller bid packages. This helps reduce the number of interfaces and ensures that the tender document is easier to price for contractors. It also allows contractors to concentrate on the parts of the project they can best deliver.