Tendering is expensive business. Research* has found that of a construction industry worth £110bn per year in project turnover costs, the cost of bidding for work was roughly 2% to 3% of total revenue, with the average cost per contractor to win each bid being 0.57% of the project value[1].* The extent of work involved in a tender may not reflect the final size of the project. Each tender is individual requiring significant input in time and resources. With no guarantee of success, tendering must be undertaken carefully and strategically so that maximum input is put into those tenders that you really want to win and consider that you can have a realistic chance of winning.
Hawk, as a RICS regulated quantity surveying practice, has undertaken many tender reviews for clients. This has given us a great insight into the quality of tender submissions and the issues that can adversely affect them when being reviewed. Many of these are not to do with the adequacy of the submitted price or the undoubted competency of the contractor, but rather issues that demonstrate a lack of care, failure to answer the questions or failure to comply with the specific requirements set out by the Client in the tender documents. The tender says everything about your company and, given that many tenders are not simply won on lowest price, if it doesn’t provide the information required in a professional manner your chances of winning may be compromised. This article provides some suggestions which may help improve the overall quality of your tender once you are collating and reviewing prior to submission.
Firstly ensure that you have a tender review meeting prior to submission. Ideally meetings should be held regularly during the tender period to ensure all is on progress but a final review meeting is essential. It should include all relevant parties and be held so that there is sufficient time after the meeting to deal with any issues that may arise. If the tender process has been effectively managed then issues should be minimal, however be aware that last minute problems can arise, particularly if you are waiting on information from others such as subcontractors, suppliers or designers.
Ideally a draft of the complete tender should be available for review. This helps to give an overall impression of the completed document whilst allowing each section to be reviewed in turn and in relation to the rest of the document. This can highlight presentation and consistency issues as well as areas which are incomplete or not as strong as desired.
Tenders generally consist of much more than just the pricing document. Design proposals, health and safety information, and other such documentation, along with extensive supporting narratives may be required. Consequently the package has to be pulled together into a consistent, organised and logically set out submission. First impressions really do count and subliminal biases are easily created particularly from a negative perspective. If your tender, for example, doesn’t have a cover, have each volume clearly identified, or an accurate table of contents, the reviewer will not get a good first impression and the review process may be more difficult.
Many contractors use external consultants and bid writers to improve the quality of their submissions. This could be something to consider if you feel unhappy with the style and content of your submissions. Bid writers have an understanding of what clients require and may be able to articulate this more accurately and succinctly than your own team. Proportionality is a major consideration here where smaller size projects or those of lesser importance may not require external assistance, but if there is a really important tender, it may be an option.
Review the consistency of information in your tender, particularly that supplied by different parties. It is not just consistency of presentation that matters, but also consistency in the use of project information. Confusion may arise if different sections of the bid give conflicting responses or, for example, different risk assumptions have been made by different parties. All parties should give a consistent message, and this must be checked thoroughly once all sections are collated.
A full set of checks should be undertaken once everything is collated in draft. The RICS guidance on tendering[2] advises that clients will check for errors and conflicts including arithmetical checks, logic checks, errors in programme dates, qualifications that may render a tender null and void and conflicts of interest. If the client will be doing this to your tender, then you must make sure that these have been checked prior to submission and you don’t fall at the first hurdle.
Apart from an arithmetical check of your pricing document, consider the rates and prices that you have used. Clients will be looking out for any rates or prices that may look out of place, either abnormally high or low. Loading of tenders for cash flow purposes is generally high on the client’s radar.
Check the balance of the tender and how it compares to any scoring system the client will use. If the bid is based on say 50% quality assessment and 50% price, then ensure that your tender is weighted accordingly. Non price-based criteria must not be glossed over and should be given sufficient consideration.
Carefully consider any qualifications or exclusions that you may have included. Make sure that these are drafted in clear and plain English so they are easily understood. The client will be looking carefully at these so ensure that they do not invalidate your tender. Clients will prefer to avoid tenders with qualifications as they make comparisons more difficult. They also like to ensure that the tendering process is scrupulously fair. Litigation by disgruntled contractors is not uncommon so it is wise to try and avoid qualifications where possible and remember for next time that if there is any ambiguity raise a query during the tender process.
Review carefully the form of contract along with the bespoke amendments that have been made. Ensure that you are comfortable with the operation of the contract and that your bid has been prepared in alignment with those rules. For example an NEC contract is significantly different from a JCT and that your approach to pricing will be very different.
Use the final tender review meeting as an opportunity to review those areas of higher risk and that you are satisfied your responses suitably protect your company. Look at issues such as provisional sums and the risk that you are taking on. NRM2[3] section 2.5.5 Non Measured Works explains the implications of defined and undefined provisional sums. Although NRM2 or SMM7 for that matter, may not apply, the use of the term “defined provisional sum” has become fairly standard. Carefully check whether the provisional sum that you are pricing complies with the definition and, if it does, you have taken full account of this in your programme, planning and pricing of preliminaries.
Carefully consider how your preliminaries have been put together, particularly site resources. Think ahead such that there is clarity as to which resources are part of the project pricing and which will be considered part of the overhead. Far too often disputes arise on these issues where clarity at the start could have prevented a problem occurring.
Make sure that you have answered all the sections. Given the amount of information required in some tenders it can be easy to overlook or miss a section, so ensure that answers are provided to all that is requested.
The above items only give a few suggestions, but by the time of the final tender review meeting, there will be limited time left to make wholesale changes. At this point focus on the big issues; completeness, presentation, clarity and make sure that the documents are structured in a way that makes it easy for the client to follow and understand. Make your document look professional such that it stands out from the rest, or at least stands up with the other tenders. Shoddy and poorly presented documents are not acceptable these days and will give a negative first impression.
If you are confident the tender has been thoroughly checked and everyone is aware of the pros and cons, as there will always be areas where you know your submission is not as strong as it could be, then make sure you submit it on time. Don’t risk missing out by being late. There may be subsequent interviews and presentations but hopefully you will have done all that you can to allow your tender to float to the surface.
*Research undertaken in by MarketingWorks in association with myConsole and Reading University
[1] https://www.transport-network.co.uk/3bn-annual-bidding-cost-for-construction-sector/14046 quoting
[2] RICS Guidance Note, UK Tendering strategies1st edition; section 3.10.2.1
[3] New rules of measurement Detailed measurement for building works 2nd edition UK October 2021