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Before we kick things off, we need to clarify that there are different types of tendering in construction:
In this article, we’ll focus on the construction tender process where main contractors invite Subcontractors to bid on specific trades, as described in construction tendering 101.
Construction tendering, a core definition of tendering in construction, is the process main contractors follow when requesting and receiving prices for a specific piece of work within a project. Tendering sits within the wider procurement process and underscores the importance of tendering for securing both cost efficiency and high-quality construction work.
The construction tendering process, central to any construction tender definition, begins when a main contractor sends out invitations to tender to subcontractors, as outlined in types of construction tenders. This invitation should include key details:
Subcontractors then have a set amount of time to submit their tenders. These tenders will typically include:
Once all tenders have been submitted, the main contractor compares them on an apples-for-apples basis.
The main contractor will consider a variety of factors:
Once the comparisons are complete, a recommendation will be put forward, reviewed and ticked off following a predetermined approval framework, an essential step in construction contract management.
Depending on the size of the subcontract, the tendering process could be time-consuming and may require a significant investment of resources from the subcontractor.
A common problem facing construction projects across the board is tight schedules. Because there’s so much to do and limited time, invitations to tender may occasionally be sent out without complete information, resulting in inaccurate quotes. On the other side, subcontractors responding to tenders without the correct documents can also prove challenging.
Tracking which subcontractors you’ve invited to tender and the status of their responses can be tricky, especially if it’s all handled through one person’s inbox — one of 10 common construction procurement risks. Knowing who’s intending to quote, who’s declined, who’s viewed documentation or who’s responded with a question are all critical bits of information. If all communication is done through one person, it reduces visibility and increases risk for the rest of the organisation.
The risk here is not getting sufficient coverage of quotes to accurately price the trade & meet the budget, highlighting the benefits of tender coverage and bulk tendering. The construction industry is extremely busy, so getting subcontractors to respond to your invitation to tender in a timely manner, if at all, can be a challenge.
Many parts of the construction tender process remain highly manual, overlooking the potential of construction procurement data: generating Scopes of Work in Word documents, contacting subcontractors with invitations to tender, chasing them for responses, comparing quotes in Excel, and tracking everything via email and other disconnected systems.
These challenges can be avoided or mitigated by following construction procurement best practices and leveraging specialist construction procurement software.
Construction procurement software with tendering functionality can integrate with Construction Management Software that handles Document Control, for example, Procore or Aconex .
This improves tendering processes by helping main contractors quickly and effortlessly compile tenders, send invitations to tender, compare quotes and make recommendations.
It can also track the status of tendering in real time, meaning you and your entire organisation have 24/7 visibility on the status of tenders — a key advantage of construction procurement software.
Construction tendering is an important process that helps to ensure that construction projects are completed on time, on budget, and to the highest possible standard.
Promoting transparency and competition can help to drive innovation and efficiency in the construction industry, ultimately providing better value for money.
However, construction tendering isn’t perfect, and there’s a massive opportunity for main contractors to improve their tendering process through construction technology innovations — especially given why tendering is important in construction for cost savings and quality outcomes.
Tim Rogers
