The tendering process in construction is a key method in finding a suitable contractor for a project. The process follows a particular structure, but can widely vary depending on several factors – such as project requirements and which specific public sector body will commission the works. Read on to gain a better understanding of the main stages of the tendering process in construction.
The 5 Stages of the Construction Tendering Process
The tendering process in construction has several key stages. The process itself aims to ensure fair competition while obtaining competitive pricing. It’s in place to ensure the most suitable contractor can be chosen for your construction project. Your project type and size can sometimes impact the stages of your tendering process, but the route still typically remains the same.
1 – Pre-Tender
The first stage of the tender process is pre-tender. This initial stage is when project requirements are discussed, the project scope is defined, and the timeline is set out. During pre-tender, buyers can assess market capabilities and prepare important documentation and evaluation criteria for the tender process to begin.
2 – Selection
It’s at the selection stage that tender documents are released, site visits and interviews are conducted and clarifications are provided to ensure that contractors bidding on your projects have all the necessary information to submit their proposals. Choosing the right supplier can be daunting, and it can take some time to evaluate tender responses.
Submitted tenders should be reviewed carefully and evaluated against specific criteria. A PQQ (pre-qualification questionnaire) can be used to ensure criteria are met. It’s important to assess each supplier carefully to make an accurate and fair decision.
At Procure Partnerships Framework, we have a selection of pre-qualified contractors available to consider, helping you save valuable time and money. We have a total of 87 contractors using our framework, and project price bands vary in price between 50k to 30M+, with 8 contractors per value band per region.
We remain on hand at all times to help clients. Whether it’s advising on timescales, providing you with specialist market intel, helping to develop tender documents, or simply advising, guiding, and supporting you – our team can be trusted to streamline your selection process.
3 – Submission
The submission stage is the third part of the construction tendering process. It involves potential contractors preparing and submitting their bids once they’ve assessed tender documents.
They can also submit vital information regarding their business. The submission stage shows a contractor’s understanding of the project and whether or not they’re suitable to take it on.
It’s important to note that the client, not Procure Partnerships Framework, is responsible for conducting evaluations and awarding contracts. This ensures that clients have complete control over the selection process and can choose the contractor that best meets their specific needs and requirements.
4 – Getting into Contract
Arranging the contract involves determining terms and conditions. It also involves ensuring the formal contract is signed correctly by both parties. Once a suitable tender has been selected, all parties involved should work together to form a construction contract.
While doing so, pricing will be finalised, and other vital details should be provided. Deciding which is the best contract type for your project can be challenging.
If your project is two-stage it will enter a Pre-Construction Services Agreement (PCSA). This is a contractual agreement outlining the services that will be provided pre-construction. For more information on PCSA, check out our blog on what happens after tender in construction.
Typically, in construction, both New Engineering Contracts (NEC) and Joint Contracts Tribunals (JCT) are considered. Let’s assess some key differences between the two contract types.
| Feature | The Joint Contracts Tribunal (JCT) | New Engineering Contract (NEC) |
|---|---|---|
| Most Popular Contract Type | Regarded as the UK’s standard construction contract | NEC4 is commonly used for engineering and construction project types |
| Language | Uses legal language with more precise terms | Uses simple English |
| Risk Transfer | Designed to transfer risks from the client to the contractor | Requires direct involvement from the client |
5 – Project Delivery
Project delivery is the final stage of the tendering process. Although it marks the end of the tendering process, it means that the work can begin. During this conclusive stage, any finalisations should be addressed before construction can get underway following agreed-upon terms within the contract.
The client should receive key deliverables and have a clear understanding of the programme, and how the construction project will go ahead. Typically, this stage reiterates the project outcomes discussed throughout the initial stages.
Unlike many other frameworks, Procure Partnerships offers comprehensive post-tender support. We provide our clients with valuable tools for monthly reporting as well as pre-construction assistance, social value verification and local supply chain compliance monitoring. These services are exclusive to our framework and can significantly enhance your project’s success.
The Different Types of Tender Processes in Construction
Construction has several tender processes – from single stage to direct award. Single-stage tendering is one of the most common types of tendering strategies – however, it won’t suit all construction projects.
Ultimately, each project will have different requirements, and the type of tendering process you choose will depend on your project type.
Single-Stage
In a single-stage tender, also known as a traditional tender, the tender documents are fully developed, typically at RIBA Stage 4, and include comprehensive survey information to ensure that contractors have all the necessary details to provide accurate and competitive cost proposals.
Essentially, a single-stage tender requires the client to provide complete project details upfront. If the initial design is insufficient, it can lead to disputes later on due to necessary modifications.
Based on this extensive set of information, contractors can begin to submit their bids, with the client later selecting whichever is most suitable. Although single-stage tender processes are a popular route to go down, they won’t be ideal for every project.
If your construction project has a tight deadline, you should be aware that this specific tendering process can take longer to award a contractor.
In many cases, single-stage tendering has required more admin work in comparison to alternative processes. Ideally, this type of process would be best suited for construction projects that demand less complex requirements.
Two-Stage
The two-stage tendering process involves an initial stage where both the client and contractor collaborate early on in a construction project, working together to refine design and cost estimates. This particular tender process is split into two sections:
- During the first selection stage of the process, contractors are required to meet extensive criteria. Potential contractors need to meet such criteria, proving their knowledge and experience to work on an upcoming project. The key commercial submissions at this stage typically include overheads and profit percentages, as well as preliminary costs
- Throughout the second half of the tender process, contractors will need to submit proposals which include key information about design development and costs
Proving to be less labour-intensive for contractors compared to most other processes, two-stage tendering has been the chosen route for many. A survey that was undertaken as part of the RIBA Construction Contracts and Law Report 2022 revealed that 37% of respondents had opted for two-stage tendering.
Open Tender
Commonly referred to as competitive bidding, open tender allows anyone to submit a tender on the project. The process involves advertising contract opportunities, and then inviting parties to place bids.
Open tendering increases competition, encouraging numerous parties to bid for the same contract. If you’re both a qualified and eligible vendor, you can bid. A key downside to open tender is that they don’t provide clients with a pre-qualified list of contractors, like frameworks offer – which can lead to inefficiency and increased costs.
Procure Partnerships Framework provides a level of support, expertise, and risk management that you won’t find with other frameworks, including financial checks and due diligence to protect against contractor insolvencies.
Direct Award
When a contract is awarded with no competition, it’s known as direct award tendering. The process of direct award is relatively streamlined and eliminates the need for competitive bidding.
The direct award route allows contractors and service providers to be appointed to a contract immediately. At Procure Partnerships, direct award takes just two days.
Procure Partnerships Framework Can Enhance The Procurement Process
Procure Partnerships Framework can enhance and streamline your procurement process. We support various public sector organisations, helping them find the best quality contractors to deliver their projects.
We also assist in finding professional services consultants within your region. Each of our five PCR15-compliant frameworks is effectively managed by regional procurement professionals – all of which remain on hand throughout the entire tendering process to ensure you’re equipped with ongoing advice and support.
From the beginning of the tendering process to the very end, you can rest assured that we’ll be here to assist you. You’ll have the option of four call-off methods, which provide flexibility with associated timescales on each. Our team can help find the most suitable tendering process to consider.
Our frameworks are cost-saving and improve the overall success of your construction project. By pre-qualifying suppliers, you’ll have less admin to deal with – allowing you more time to focus on kickstarting your project.
To learn more about our tendering processes, we encourage you to get in touch today.
