We bet that you are already familiar with the tendering process steps, which include the call for submission, the bid submission, the selection process, and the formation of the contract. However, the process of tenders in construction is slightly more complicated as you have many more choices. Let us discuss how to tender for construction work in the following article.
What is Tendering in Construction?
In the construction industry, tendering is the process of requesting and receiving a price for a specific scope of work. The tendering process aims to help ensure fair competition in the industry and selection based on predetermined criteria to reduce bias. Usually, the tender for construction work process is utilised by public entities. Still, occasionally, larger entities in the private sector can also use the process to find a suitable contractor for a specific project.
The tender process starts with an Invitation To Tender (ITT). This may also be called a Request For Proposal (RFP) in a construction project, Invitation To Bid (ITB), or a Request For Qualification (RFQ). Irrespective of the name that you utilise, this document will include all the information needed to provide pricing on the prospective scope of work. Based on the tender documents, contractors provide the owner service cost/pricing. The owner will review the tender and select the one that best fits their expectations. Using ISO 9001 consulting services and obtaining an ISO certificate can be helpful to conduct a tender.
There are several types of tender processes in construction that can be used to select a contractor. Let us discuss them.
Types of Tender Processes in Construction
As mentioned above, different types of the tender process can be utilised by the government agency/private sector entity to select a contractor, including:
- Open tendering: During an open tendering process, everyone has the right to submit a tender in response to the invitation. The opportunity is advertised so all contractors can see it, and every interested contractor can submit a bid. However, in certain cases, contractors are submitted to a pre-qualifying round before they can submit/reply to an open tender. Open tendering is among the most competitive options; anyone interested in the opportunity will bid on it. Hence, the bids will have cut-throat price differences. The benefit of this process is that it allows emerging and new contractors an opportunity to win work, thereby forcing the seniors of the industry to remain on their toes.
- Selective tendering: Selective tendering is the process where the owner chooses a short list of contractors, and only these contractors are invited to submit a response to the tender. In contrast, to open tendering, only the pre-selected contractors may submit a tender offer. Such a type of tender works best in complex projects or projects requiring contractors with specific skills, expertise, or knowledge. Owners want to limit the response only to the particular class of construction companies deemed suitable for work. The disadvantage is that it excludes new and small companies, who could very well be competent, from submitting the bids and minimises the overall number of competitive bids. The advantage is that it ensures that only competent contractors participate in the process.
- Negotiated tendering: In negotiated tendering, only one contractor or dealer is selected to submit a tender, and the owner negotiates the terms of the contract to reach a mutually beneficial agreement. This tendering process is only utilised for highly specialised contracts, significantly reducing effort as there is only one proposal to view. As this process discourages competition between contractors, it can escalate the prices and make the negotiating process more challenging.
- Serial tendering: In this process, a particular contractor provides a set of typical values for a scope of work over a series of similar projects.
- Framework tendering: This process involves the selection of a contractor for on-call work over a period of time.
- Single-stage and two-stage tendering: The tender documents are fully developed and designed before the invitation is even sent out in the single-stage tender. In two-stage tendering, the initial design is incomplete before the contractors send the documents.
Apart from this, most of the construction organisations hire an ISO 45001 consultant to provide safety and health management for their company and employees.
How to Tender for Construction Work?
In most tendering opportunities in the construction industry, contractors are classified based on experience and price. Any steps the contractor can take to minimise the project cost will make their bid more appealing and competitive. Construction management software will let you keep your team updated with the latest construction documents and information to prevent mistakes, keep the job moving, and avoid costly rework. By the help of ISO 27001 consultant and obtaining an ISO 27001, all the information is kept safe.
More importantly, such software can also improve your response time because material takeoff becomes simplified. This will boost the accuracy of your competitive tender. Hence, consider modernising your estimating process to tender for construction work instead of relying on legacy solutions. Edara Systems does precisely that, helping you streamline your processes and create compelling bids that will outshine your competition.
Win the Tenders With the Help of Edara Systems
To tender for construction work, begin by selecting the type of tender most suitable to your organisation’s unique circumstance and include construction management software that will boost your accuracy.
If you need help in the tendering process for construction work, Edara Systems can help you. With the help of Edara Systems professional consultants, you will win all tenders without any problems. For more information, visit Edara System website and get in touch with this expert team.