Are you a contractor looking to get more work? Creating construction tenders are key to getting those big contracts for your next project. Still, putting together a submission can feel like navigating a maze in the dark.
Let’s examine what reviewers look for in tenders, explain different tendering methods, and provide a step-by-step guide for submitting a successful construction tender.
What to Expect in the Construction Tendering Process in 2024
Before getting into the tendering process, let’s take a quick look at the state of the Australian construction scene:
- Total construction work done was down 2.9% to $64,032.5m in the March 2024 quarter.
- Building work done was down 3.7% to $33,315.1m.
- Engineering work done was down 2.1% to $30,717.4m.
- After a strong 2023, industry growth is expected to slow to 2% in real terms in 2024.
The construction industry contributes around 8-9% of Australia’s GDP and employs over 1.3 million people. However, the industry is currently facing challenges like labour shortages, skill gaps, and new building codes. Understanding the importance of comprehensive tender documents is key to successfully navigating the tender process.
To overcome these challenges, contractors need to win tenders and succeed. The success of any construction project often depends on getting competitive bids that meet the project’s needs.
What to Focus On When Writing Tender Documents
A competitive tender allows anyone to bid, encourages competition, and allows new and emerging contractors to win work.
Clear tender documentation is essential, which includes creating and reviewing the necessary documents, answering prospective tenderers’ questions, understanding the evaluation criteria, and submitting the tender documentation itself.
When clients and project owners review tenders, they look at a few key things:
Check All The Boxes
Does the tender cover every single point in the project brief? Incomplete or non-compliant submissions get binned.
Proven Track Record
Reviewers want to see hard evidence you can deliver. Show them similar projects you’ve completed and include client testimonials. Show them your experience with previous contracts.
Methodology and Approach
Paint a picture of how you will complete the project from start to finish. Explain your construction methods and tech and risk management strategies, showing that you have considered everything.
The project delivery method is crucial to planning and execution. Finalising negotiations and forming a formal agreement between the owner-developer and the contractor through a construction contract is crucial to address any project scope concerns during the tendering process.
Profitable Prices
The pricing needs to be competitive yet also realistic and profitable. Estimate all project costs, including labour, materials, equipment, overhead and profit margin. Break down your costs and show how value is being delivered for the client’s dollar.
Realistic Timeframes
Propose a timeline that’s achievable and meets the client’s needs. Reviewers will scrutinise your schedule to make sure it’s feasible.
How to Make the Cut During the Evaluation Process
To increase your chances of getting through during the tender evaluation phase, considering doing the following:
- Check every last detail of your tender before you hit “submit.”
- Respond quickly to any client queries or requests for clarification during the evaluation period.
- Show clearly you comply with all relevant Australian standards and regulations.
If you need assistance preparing your tender, consult our construction experts in Duo QS.
What to Avoid in the Tender Process
Knowing the whole process is critical to avoiding the following:
Skimming the Brief Only
When you’re in a hurry to meet the deadline, it’s easy to skim over the tender documents and miss the important segments. Failure to address all the specified requirements is a surefire way to get your bid rejected.
Take the time to read and understand every part of the brief. Create a checklist of all the mandatory criteria and check your tender covers them all. Having this extra step can make all the difference.
Copy and Paste Responses
Using old tender responses might save time, however, it’s a big red flag for reviewers.
They can spot a submission using a generic template from a mile away. It shows you haven’t bothered to understand their project needs.
Instead, write each tender from scratch, tailored to the client’s specific needs. Show you’ve researched their organisation and the project scope. Customise your approach, methodology and team bios to show how you’re the best fit for this project.
In some cases, such as highly specialised contracts, negotiated tendering can further tailor the approach and reduce costs.
Submitting Wrong, Inconsistent, or Unrealistic Costs and Timeframes
Clients will review your pricing and proposed schedule. Any inaccuracies, inconsistencies, or unrealistic estimates will trigger alarm bells. Unable to complete the dedicated task will leave a negative imprint on the service and the overall objective of the service.
Be precise with your costs, and make sure all calculations are error-free and based on real assumptions. Retrieve quotes from suppliers to validate material costs. Factor your timelines against industry benchmarks and your own history. Show your pricing and program rationale.
Contract negotiation is key during the procurement process, especially during the evaluation committees and contract management phases.
Forgetting to Proofread
Completing a long project can be rewarding when the tender is completed. However, not proofreading and getting the final sign-off can be costly. Typos, formatting issues, and missing attachments will result in your bid not delivering the quality and expectations your client is expecting.
Always allow time for a thorough review of your tender before you submit it. Run a spell check and get someone else to proofread for clarity and consistency. Also, ensure all requested attachments and that every page is numbered and labelled.
Most importantly, ensure you have received final sign-off from senior management and all parties.
Underestimating the Significance of Compliance and Licencing
Compliance is king in construction. Failure to show that you meet all the relevant Australian standards, building codes, and licencing requirements will knock you out of the running.
Ensure both parties are aligned with the compliance and licence required for the task/work. Provide evidence like certificates of registration, insurance policies and safety management plans. Highlight any industry accreditations or awards that set you apart.
Ignoring the Evaluation Criteria and Weighting
The tender process will specify the criteria and weightings against which bids will be judged. Not reading these is a major oversight. It is important to prioritise key sections that benefit a business or client to ensure the key components of a tender process are on track for completion.
Key Takeaways
- Reviewers will assess tenders on compliance, capability, approach, value for money and timeframes.
- Tenders go through initial screening, technical evaluation and financial scrutiny before a winner is chosen.
- Improve your chances by triple-checking your bid, responding quickly to queries and ticking every compliance box.
- Never reuse responses, never use dodgy numbers and never submit inconsistent tenders.
If you have more questions about the tendering process or what it takes to provide cost estimates, you can look into our FAQ.