Tendering

Tendering is a structured and competitive process that is used to find the best contractor for a project. Different companies send in bids for large projects. Instead of quickly choosing the first option, this process helps construction teams pick the best contractor for the project's needs. The client must verify that each bid meets the project's technical, financial, and legal requirements before awarding the job.

In this section, we will teach you what tendering in construction means. We’ll cover its types, the full process, and why it matters in construction projects. By the end, you’ll understand why getting it right from the start is so important. A good process can build your reputation, while a poor one can damage it.

What is tendering in construction?

Tendering in construction is a highly competitive process where competing contractors submit bids and the client selects the best one for the project. These bids include the total cost, work plans, materials, and expected quality. The project leaders then review each bid. They choose the best one based on cost, planning, and experience.

Tenders help in supporting competitive pricing, and this process helps find the right partners for the job. At the same time, it removes unqualified bids that could hurt the project's quality or cause delays. Tendering depends on the project’s size, location, and needs. It is not just a simple step. It plays a big role in the project’s success. A strong process can lead to long-term partnerships from the very start.

Types of tendering in construction 

Every method has a different purpose and is best for specific types of projects. Selecting the correct type for your project can help in risk management, attract competent bidders, and also make the overall value of the investment profitable. This section is going to help you look at the most common types of tendering in construction. You also get a brief idea of how it works.

• Open Procurement - This is the most common type, where the information is advertised publicly, and anyone qualified can submit the bid. It promotes transparency and a competitive spirit, giving the best value to the project owners. 
• Selective tendering - In this type, only those who are shortlisted or prequalified are invited to submit their tender. The higher authorities select the best fit based on their market reputation, past experiences, and their technical and financial abilities. This type of bidding is best for projects that demand experienced and specialised contractors. 
• Negotiated Contracting - This process is useful when there is a minimum time and urgent requirement for the project. The client directly negotiates with a contractor and finalises the deal. The chances for finalisation are higher in this type; however, it might not always offer competitive pricing.
• Single and two-stage - In single-stage tendering, candidates submit their bids in one attempt based on the complete project information given to them. Whereas, in two-stage bidding, they first submit an initial bid based on the basic information provided to them. After that, they again submit their second bid once the rest of the project details are given to them.

What is the process of tendering?

The process of tendering is a set of systematic and organised steps designed for a fair and transparent selection of contractors or suppliers for a project. It begins when a project owner, such as a government or a private developer. They required someone to construct a project or provide additional services in an ongoing project. They then advertise this requirement for those who think they are qualified enough to provide the service.

The process ensures that bidders align their proposals with the project’s goals and that all parties understand the expectations from the start. In this section, we are going to see how the entire process naturally unfolds and plays a huge part in the fair selection process of the right construction partners.

Invitation to tender 

The client sent out an invitation to tenders or a request for proposal to potential contractors or agencies. This document includes detailed information about the project and its key aspects, such as the specifications, its budget, and the tender selection criteria. Not all invitations will get a bid towards the tendering process. It all depends on the tender's ability and availability.

Submission of the bids 

Those who are interested in the project then submit their bids within a specific deadline. It mainly includes the asking price, schedules of the entire project, their approach, qualifications, and previous work experience. Following the submission requirements is very important for the tenders to be considered valid. This part of the tendering process is where the interested party pitches their ability to do the project successfully.

Bid evaluation 

The project owner then evaluates the submitted bids based on the criteria mentioned earlier, such as price, technical capability, and overall work experience. The team then carefully analyses each bid to ensure they make the right decision without compromising the project outcome later. This part of the process can involve a back-and-forth with all the bidders to ensure a clearer explanation of each bid. 

Awarding the Contract 

Once they complete all evaluations, the client awards he contract to the chosen candidate. They are then formally notified, and both the respective parties sign a formal agreement that highlights the working terms and conditions. This marks the end of the tendering process, and the contracted tenderer can start on the project officially.

Post tender negotiations 

In some cases, after the entire process, the owner might want to engage in discussions with the chosen contractor. This is to understand their approach in a bit more detail and how it is going to benefit the entire project. This stage of the process also ensures that both parties have a crystal clear understanding of the project expectations and its outcomes.