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You do not get second chances in procurement. One careless move in the tender process, and you can trigger scope gaps, overspends, or endless disputes.
What most people miss is that construction tendering is not a single approach — it is a choice. Different tender types come with different timelines, risk profiles, and pricing expectations, shaped by the project’s contract, location, and trade.
Letting a contractor price a small fitout in Sydney’s CBD is not the same as procuring earthworks for a major rail corridor in regional Victoria. Different tender strategies apply to different scopes. If you have ever wondered, ‘Why can’t they just send a price?’, this guide is for you.
Tendering is where cost, scope, and risk take their first real form. It can lock in the commercial outcome of your project — or leave you untangling issues later.
Your choice of tender method affects who bids, how competitive the pricing is, and how smoothly you can compare quotes before awarding. No approach suits every scenario.
• Open tendering might bring transparency, but it can also flood you with useless quotes.
• Selective tendering is faster, but you risk missing out on new, sharper trades.
• Two-stage tendering buys you time to refine scope but needs firm management.
• Negotiated tendering is convenient when only one contractor can do the job, though it needs strict cost checks.
Pick the wrong strategy, and you will waste weeks clarifying bids or, worse, awarding a package to a subcontractor no one else would touch. If you have ever been in that awkward spot, you know how vital tendering is from day one.
Open tendering means anyone who finds the tender can submit a price. There is no prequalification or invitation requirement. It is common on public projects like schools, hospitals, or infrastructure and sometimes used by Tier 2 builders to test new trades or source local subcontractors.
The upside is competition. The downside is noise. You need time and structure to sift through unknown bidders. There is value in casting a wide net — but only if you can handle what gets hauled in.
Open tenders suit early-stage builds or jobs that need legally mandated transparency. They also win favour when you want to test new markets or do not have an established supply chain.
Open tendering draws in more quotes, but also more admin.
• More coverage: Bids from a wider pool.
• Less bias: Transparent process that tends to satisfy public procurement rules.
• Increased admin: Many RFIs, loads of quotes (some poor), and tricky comparisons.
If you are drowning in spreadsheets or manually compiling quotes, open tendering can stretch your team to breaking point. The remedy is a structured approach, with standard scopes and clear pricing formats for all.
Selective tendering invites only a chosen shortlist of bidders, often three to five. It is a time-saver for mid-sized builds or repeat packages, letting you skip the unknowns and focus on tried-and-tested trades.
By limiting bidders, you cut back on admin and accelerate decisions. However, you must watch pricing complacency — too much familiarity can soften the commercial tension.
Selective tendering reduces random risk. Yet a cushy group of known suppliers can hike prices if they sense less competition.
• Faster turnaround: Fewer bidders to chase for compliance.
• Known quality: You have seen their past performance.
• Less competitive pressure: Smaller pool can push up costs.
• Harder to benchmark: Missing out on new or more cost-effective entrants.
For public projects, you must still follow transparency rules. In the UK, that might involve frameworks like Constructionline or the Crown Commercial Service. In Australia, you might see prequalification panels (for instance, the NSW Government’s SCM1191 scheme).
In private work, you have more freedom. Still, keep a record of your shortlist, their performance, and final pricing. It is not foolproof if you cannot justify your decisions when budgets blow out.
Negotiated tendering cuts straight to one contractor without going to competition. It is common when a single supplier is tied to your design, or you want early input from a specific trade.
This can work well if the subcontractor has unique skills or prior site experience (façade systems, for example). But without other bids, there is little price tension, so you must scrutinise rates thoroughly.
Time pressure, complex scope, or proprietary systems often make negotiated tendering a logical choice. It also happens when a contractor already did early contractor involvement (ECI).
• Appointing a piling contractor who provided geotechnical advice.
• Negotiating specialised fire services with a proven supplier.
• Fast-tracking early works while your design is still evolving.
Without competing prices, you need structure. Here are five ways to tighten control:
• Document everything: Scope, assumptions, and exclusions must be written down.
• Use benchmarks: Compare rates to similar projects, adjusting for location and scale.
• Stage the deal: Fix prelminary costs first, then confirm the lump sum once scope is final.
• Cap early spends: Issue letters of intent with hard limits and expiry dates.
• Set timeframes: Define when each pricing round concludes.
Negotiated tendering is not about speed. It is about ownership. If you go down this route, be ready to defend every cost when the final account is questioned.
Two-stage tendering involves appointing a contractor early, then agreeing the final price once the design is further advanced. It keeps you moving without waiting for a full design set.
You often see it on complex jobs like hospitals or large education builds where the clock is ticking, but the plans are far from complete.
In stage one, you tender preliminaries, overhead costs, and programme. Once you appoint a contractor, they help finalise the design and procure the trades. That is stage two.
• Stage one: Issue partial design, price prelims, overheads, and methodology. Award a preconstruction agreement.
• Stage two: Contractor refines the design with the team, locks in trade pricing, then finalises the contract sum.
This lets you push early works forward while your final price is still evolving.
Two-stage tendering is not a get-out-of-jail-free card. It reduces risk from incomplete drawings but requires careful monitoring of costs.
• Suited for complex builds: Early engagement reduces redesigns and site clashes.
• Evolves over time: Budgets can creep if changes are not nipped in the bud.
• Stage two can drag: If the design is behind or trades are slow to price, it may stall.
To keep it tight, lock in procurement milestones and cap preconstruction fees. Separate early works from the main lump sum, and track each package to prevent scope creep.
A request for proposal (RFP) goes beyond the price. You ask bidders to explain how they will deliver the works. This is ideal for technical or design-heavy packages, where the ‘how’ is as important as the ‘how much.’
Typical examples include façade systems with detailed engineering, complex audio-visual installations for a new university building, or bespoke joinery that requires specialist input from the start.
You are not just buying labour and materials. You are paying for the thinking.
• High technical risk: Packages need a clear methodology.
• Shared design responsibility: The subcontractor provides essential design input.
• Early contractor involvement: The approach can affect programme and sequencing.
Traditional tenders focus on lump sums. An RFP evaluates both technical approach and price. You might give pricing a 50–60% weighting, with the rest awarded for methodology or programme efficiency.
Still, you must define your RFP requirements carefully. A vague request will leave you comparing apples to wheelbarrows, so spell out your evaluation criteria and submission format.
A request for quotation (RFQ) is all about the numbers. If your scope is straightforward — supply-only, or low risk — you issue a spec and ask for a price. Simple.
It suits materials supply, basic plant hire, or standard labour rates. Quotes might come back in 24 hours, especially if you are slotting final figures into a budget or need a quick check against an existing trade.
• Materials or product supply: Reinforcement bar, plasterboard, insulation.
• Plant hire: Scissor lifts, fencing, site huts.
• Repeat services: Waste removal, testing and tagging, consumables.
There is no heavy evaluation here. You either like the price or you do not.
With an RFQ, brevity is your friend, but it also means any scope gaps are on you. Check your numbers, clarify your requirements, and keep the turnaround short.
• Fast response: Often one to three days.
• Low admin: No big tender packs or heavy evaluation.
• Higher risk for scope mistakes: If you miss a detail, the price will miss it too.
Framework agreements pre-approve suppliers, pricing structures, and terms so you can form contracts quickly whenever you need the work. Public sector bodies like councils, departments, and health networks swear by them. Large private organisations also use frameworks for repeat builds or maintenance.
A well-set framework can mean fewer repetitive tenders, speedy procurements, and reduced legal wrangling.
Frameworks are ideal for scale and consistency. They are used by government and large organisations for repeated scopes such as civil works, maintenance, or modular buildings.
• Government frameworks: NHS and Crown Commercial Service.
• Private panels: Aged care groups or retail chains planning multiple sites.
Some frameworks limit you to one supplier; others have panels. Some allow direct awards; others require a mini tender for each call-off.
• Faster procurement: No fresh tender pack each time.
• Known suppliers: Performance and compliance are already checked.
• Fixed base terms: Less negotiation and legal complexity.
The catch is flexibility. If market rates drop, your framework might lock you into old prices. Big panels stay open for years, so they can become stale. Also, if you fail to follow awarding rules, you can land in hot water.
A dynamic purchasing system (DPS) is an all-digital method where suppliers can join at any time, unlike a closed framework. It suits frequent, lower-value works or services that crop up across multiple sites.
You see DPS often in public procurement, especially under Regulation 34 of the Public Contracts Regulations 2015 in the UK. The buyer advertises the DPS on the Find a Tender Service, and suppliers can apply whenever they meet the criteria.
DPS is not for large, one-off builds. It is designed for routine, repeated scopes like cleaning, minor civils, or plant hire. It works well if many small providers operate in the same niche and you want ongoing competition.
Once set up, the DPS becomes a list of pre-qualified suppliers. Buyers then run mini competitions for each package. Suppliers do not need to re-verify compliance — they are already in the system.
• Suppliers can join any time.
• Buyers issue call-offs within the DPS.
• Contracts are awarded per package.
A DPS can swell to huge supplier numbers if many meet the criteria. This openness encourages competition but can also create extra admin. Used properly, it is less rigid than frameworks. It is not The New Way — but it is often better than The Old Way if you have high-volume, low-complexity work and you keep a tight handle on the process.
Open tendering is the default for most public-sector projects. It is also popular in smaller private ventures that prioritise transparency or broad market testing.
Most contractors encounter four basic methods: open, selective, negotiated, and either RFP or RFQ. Each fits different combinations of scope, timeline, and risk. Large or complex projects often mix and match these methods.
They weigh four factors: design clarity, timeline urgency, appetite for risk, and whether cost or delivery speed matters more. Often the best fit emerges once you balance all four.
Tendering is not just about picking a format — it is about how that format slots into your overall procurement process. You might choose open tendering or an RFQ, but if your team is still juggling spreadsheets, chasing incomplete quotes, or rewriting contracts every other week, you are still stuck in The Old Way.
ProcurePro streamlines the entire workflow: from issuing tenders, tracking quotes, and comparing apples with apples, through to contract generation and real-time procurement status. It gives you consistency and structure, preventing the chaos that drags tenders off track.
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