Tendering – the good, the bad and the ugly

Tendering is a beast that needs some wrangling and a bit of sweet talking, but once you get your approach well under control you can make playing the game work in your favour.

Tendering can take a few different forms, but generally it is the definition of bidding for a construction project, either formally or informally. The bidding may be competitive or negotiated.

Formal tender

A formal tender generally contains tendering documentation, such as the contractual requirements, full specification and plans that all outline how the pricing should be structured and submitted.

Formal tenders are frequently seen in commercial and government projects and can be run by architects or project managers. They are prescriptive, however, you need to make sure you read and understand the clauses in full as once your price is submitted, if accepted it can be binding. Formal tendering is an art form. Once the nuts and bolts have been measured, how the tender is put together while responding to the requirements in the contract documentation depends on the competitive nature, the type of job, the type of client, to name a few. Your QS is very helpful here! Informal tender

Informal tendering is generally found amongst homeowners who are renovating or building and are looking for one or more builders to price their project. Generally based upon detailed design, sometimes with and sometimes without a specification, bids of this nature do not usually have a prescribed format for submission. Sometimes this is a good thing, but sometimes it is not, particularly if you are tendering against other builders who take a different level of detailed approach to the pricing exercise. No one wants to spend a lot of time and money pricing against someone else who just writes a number on the back of a chip packet!

I would encourage you to understand how your client is planning on analysing the tenders they receive prior to spending a lot of time on it…

Tender letter

In both cases, I believe the best way to look out for your bottom line is by way of a tender letter. Generally, this is a requirement for formal tendering, however I definitely encourage its use in informal tendering situations too. A tender letter is a professional, detailed, official way of presenting your bid for a job, while ensuring you are covering yourself. It should clearly outline your total price for completing the work and lay out your tags and clarifications. Items that should be included in your tags and clarifications should be items such as:

• the plans including revisions and dates that have been reviewed • any other documentation, such as engineers drawings that have been reviewed • if a site visit was undertaken, and when • if there have been any product changes to the specification and why (such as cost saving, or inability to source) • any tags brought forward from subcontractor quotations • other items, such as no allowance for rock excavation, etc. Your tender letter paves the way for a well-organised project, clarifying all the work that you are doing and ensuring that any variations to the work are easy to define. The list above is by no means full and complete and will vary depending on the job.

By Victoria Harrison, Director Red QS. Red QS are NZCB National Partners and provide bespoke quantity surveying services to builders and sub trades, large and small, all across New Zealand. The team has an exceptional level of skill across the board, and our services are available on an as when needed basis! See www.redgroup.nz for further information.