What Is Tendering?

What is tendering? In construction, tendering is crucial because assembling the right team from the start is essential for project success. So, what is the process, what should we keep in mind, and how can we avoid wasting time? Let’s dive into that in this blog! In this blog, I’ll walk you through the steps of tendering and share some tips to make the process smoother. By the end, you’ll have an additional tool in your toolbox to help you manage this process more effectively.

1. Preparation of Tendering Documents

The project owner or client prepares tender documents, which typically include:

• The tender documents themselves
• Request for proposal (RFP)
• Invitation to tender
• Project scope, specifications, and requirements
• Terms and conditions the contractor or trades must meet
• Submission deadlines, evaluation criteria, and other pertinent information

The key here is to have a clear and concise document that allows for bid leveling. This ensures that all contractors are being compared fairly and that the information provided is consistent and easy to respond to.

2. Advertisement and Distribution

Tender advertisements can be shared via:

• Public notices
• Online portals
• Industry publications
• Direct invitations to pre-qualified contractors

The goal is to reach the widest pool of contractors possible, ensuring a competitive bidding process.

3. Site Visit

In some instances, conducting a site visit for potential contractors can be beneficial. This allows them to assess existing conditions, ask questions, and clarify project expectations.

4. Submission of Bids

Contractors need to submit their bids by the specified deadline, including:

• Pricing information
• Technical proposals
• Qualifications and experience
• References
• Any other required documentation

5. Bid Evaluation

Much like the bid leveling process, bids are evaluated based on:

• Price
• Technical ability
• Experience
• Team qualifications
• Other specific criteria

Each bid should be evaluated and ranked according to the predetermined criteria to ensure a fair assessment.

6. Bidder Award

Once evaluated, the project is awarded to a contractor. It’s not always about the lowest bid but rather the most qualified contractor based on a combination of factors like experience, qualifications, and cost. Choosing solely based on the lowest bid could result in increased costs through change orders and diminished quality of work.

7. Notification to Bidders

It’s important to notify both the successful and unsuccessful bidders. For those not selected, providing feedback is key to maintaining relationships and encouraging future bids. A good tendering process should be transparent and consistent, giving all bidders a fair shot at the project.

What to Never Do in the Tendering Process

One major rule: never waste a contractor’s time. If you know that you’re not going to select a specific contractor, do not invite them to bid. It’s unfair and unethical to ask them to invest time and resources when they have no chance of winning the bid.

Key Tips for Successful Tendering

1. Clearly Define the Project Scope: Ensure clarity around the project requirements, so it doesn’t take days to understand what you’re asking for.
2. Pre-qualify Contractors: Only invite contractors who meet the necessary quality, experience, and safety standards.
3. Engage Early and Often: Build relationships with potential contractors before the formal tendering process starts.
4. Avoid Political Games: Only put projects out to bid if you intend to select from multiple contractors.
5. Ensure Transparent Communication: If one contractor asks a question, share the answer with all bidders to ensure fairness.
6. Allow Sufficient Time: Contractors need ample time to submit detailed and accurate proposals.
7. Be Clear About Evaluation Criteria: Make sure contractors understand how their bids will be evaluated before they submit.
8. Consider Value, Not Just Price: The lowest price doesn’t always mean the best deal.
9. Negotiate With Shortlisted Bidders: Once you’ve shortlisted contractors, consider negotiating for a better price or more certainty.
10. Review Past Experience: Ensure the contractors you’re considering have relevant experience and the ability to execute the project successfully.
11. Legal Compliance: Ensure all selected contractors comply with local, state, and federal regulations.

Final Thoughts

Remember, you can have one or two underperforming contractors on a project, but not three—it could derail the entire job. Spend as much time as necessary during the tendering process to select the right team for the job. Choosing solely on price will only cause problems later on. I hope this blog has provided you with valuable insights into the tendering process. Use these steps and tips to make sure you have the right contractor, team, and deal for your next project. Stay tuned for more resources that can help you master this process!