6 Types of civil work tenders Construction and Real Estate

We are certain you are aware of “What is a tender?” by now. In a nutshell, a tender is a submission made by a prospective supplier in response to an invitation to tender. Basically, It puts forth an offer for the supply of goods or services required for a particular project.

In the construction/civil work sector, the main tender process is generally focused on the best selection of the contractor that will construct the works as per desired guidelines in the tender document. However, as procurement procedures have increased complexity, civil work tenders today have a wider scope of work and contractors may willingly deliver additional functions such as design and management.

There is also an increasing tendency for suppliers to be aggregated into single contracts, for example, 'integrated supply teams' on public projects may include; the main contractor, designers, sub-contractors, suppliers, facilities managers, and so on.

Irrespective of the nature of the goods or services that are being sought, below are the types of civil work/construction tenders you may come across:

1. Open Tendering:

As the name suggests, an Open tendering option allows anyone to submit a tender to supply the goods or services as per the tender document requirements. Traditionally followed, an advertisement will be placed giving notice that the contract is being tendered, and offering an equal opportunity to any organisation to submit a tender. Recently trending is e-tendering and e-procurement procedures to avoid time-consuming and biased manual/physical tendering procedures.

Additionally, on larger projects or high investment projects, there may be a pre-qualification process that produces a shortlist of suitable suppliers who will be accessed on capability and then invited to prepare tenders. An important point to note here is, this sort of pre-qualification process is not the same as selective tendering.

2. Selective Tendering:

Different from the pre-qualification process done in an open tender, a Selective tender only allow permitted suppliers to submit tenders by invitation. A supplier is invited on the basis of his track record to be suitable for a contract of the size, nature and complexity required. A pre-selected list of capable suppliers is then created.

The biggest advantage of a Selective tender option in a civil work/construction project is that it gives clients greater confidence that their requirements will be satisfied reducing the wastage of effort and resources that can be involved elsewhere.

3. Negotiated Tendering:

A Negotiated tender is when a single supplier may be suitable for highly specialized/customised contracts, or also often used to extend the scope of an existing ongoing contract. This tendering method not only reduced the costs of tendering but also encourages contractor involvement at an early stage of the project. One disadvantage is that it gives no scope of competition as there is no other contractor bid for comparison purposes. We advise that the structure of the negotiation is clearly set well in advance to avoid an adversarial atmosphere to develop, even before the contract has been awarded.

4. Serial Tendering:

Serial tendering involves the preparation of tenders based on a typical or notional bill of quantities or schedule of works. The rates submitted can then be used to value works over a series of similar projects, often for a fixed period of time following which the tendering procedure may be repeated.

2 major feathers on the cap of a Serial tender are: Reduced tendering costs and encourages suppliers/contractors to submit low rates to secure an ongoing programme of work.

5. Framework Tendering:

By choosing the framework agreement method of tendering clients that are continuously commissioning work might reduce timescales, learning curves and other risks. Framework tendering allows the client to invite tenders from suppliers of goods and services on a call-off basis as and when required. A Framework tender document includes a request for a schedule of rates and time charges. Additionally, a breakdown of resources and overheads is also expected by the client (this rate and time charge will include any proposed subcontractor or sub-consultant details if applicable).

The biggest plus point in the framework tendering method is that you can appoint/select more than one supplier for a single tender. This gives you the scope of supplier change/addition/subtraction from the project as and when required allowing you the flexibility of work as a client.

6. Single-stage and Two-stage Tendering:

Single-stage tendering is used when all the vital information is available to calculate a realistic price when the tendering starts. An invitation to tender is issued to prospective suppliers/contractors, post which tenders are prepared and returned. Finally, a preferred tenderer is selected and following negotiations, they may be appointed.

Two-stage tendering is utilized to allow the early appointment of a supplier, which means this is done prior to the completion of all the information required to enable them to offer a fixed price. In the first stage, a limited appointment is agreed to allow work to begin and in the second stage, a fixed price is negotiated for the project.

Ultimate Words of Wisdom: LEAVE NO SCOPE FOR ERRORS

Whichever type of tender your submission falls under, you need to understand that a single small error in your tender document submission can cost you to lose a lucrative contract. We recommend you go through the 5 Common errors a contractor may do while submitting a Civil Works/Construction Tender submission. Avoid these in order to efficiently bag a civil works tender contract.

ALL THE BEST!