Deciphering the Tender Process
The principle is, broadly, to enable the client to appoint a proficient contractor at the right price, time frame and apportionment of risk. Equally, the contractor will have adequate information upon which to make an honest bid.
There are different types of tendering processes, in their simplest form these include:
The contractor is employed by the client to take responsibility for both the design and construction of the project, after the client has initiated the design process to a suitable stage. There is a greater element of control for the client over the time and cost of build, as all aspects of build are controlled by one entity.
The client appoints a separate design consultant/ architect, who is responsible for design, cost control and contract administration. Once the design has reached the appropriate standard, the construction documents are released and contractors can bid to execute the building works. This method allows an early start on the build, as well as complete control over design, but there is less certainty over cost.
This is a variation where the client offers out the prepared construction documents (which usually including a bill of quantities and detailed drawings), and tenders are obtained from several possible contractors. The client chooses a contractor based on the most agreeable bid, usually taking into account cost and quality. This process offers competition in design and price, allowing the client to potentially reduce costs.
The purpose here is to allow an early appointment of the contractor to allow the project team to come together at an earlier stage and work collaboratively to get the contract to completion – usually taking less time than other forms of tender.
Contractors bid for the first stage of work, usually based on more limited information than a traditional contract – for example simple drawings, elevations and a lead time. After tenders are put forward, the client will usually take forward one contractor to the second stage (whether D&B or traditional contract) based on their scheme ideas, prelims, programme and quality (there are many and varied requirements). The contractor negotiates the price for the second, final development stage, and once contracted will then work as part of the project team to advise on buildability issues, value engineering and other elements of work to ensure a smoother transition to site alongside best value and practise.
*Find out more about two-stage tender benefits here.
Similar to the Traditional method, however in this case the architect and building contractor is selected prior to commencement, and collaborate throughout the design phase. When the designs are finalised, costs are negotiated by the contractor based on bids from sub-contractors.
Usually for those in a hurry! A management contract can be distributed by the client in order to meet tight programmes and is generally disclosed to the contractor earlier on in the design process so they can produce value engineering initiatives and raise any buildability issues (among others); this may even extend to before the design is actually complete which can raise issues of cost certainty to the client and ultimately a greater risk but will reduce project timescales.