Tender Process

The tender process is how you find the right contractor at the right price for each work package on your project. Done well, it gives you competitive pricing, a clear scope agreement, and a contractor who understands what they're building. Done poorly, it sets up twelve months of variations, disputes, and cost blowouts. The effort you put into tendering directly determines how smoothly your build runs.

Preparing the tender package is where most of the work happens — and where most developers cut corners. A complete package includes architectural drawings, engineering drawings, specifications, a bill of quantities or schedule of rates, the proposed contract conditions, a site information pack (geotech, survey, any known hazards), and clear instructions on how to submit. If you're using a standard form contract (AS 4000, HIA, MBA), include the specific edition and any special conditions so tenderers can price the risk allocation accurately. Incomplete documentation leads to qualified tenders — bids full of exclusions, assumptions, and provisional sums that make comparison impossible.

For small developers, tendering is often informal. You ring three builders, send them the drawings, and pick the cheapest quote. This approach is risky. The cheapest price isn't always the best value, and without a structured process, you miss critical differences in scope, exclusions, and programme assumptions. One builder might exclude site clearing. Another might assume a 10-month programme where you're expecting 8. A third might have priced imported fill while the others assumed cut-to-fill on site. Unless you normalise these differences, you're not comparing tenders — you're comparing guesses.

The evaluation process should be structured around clear criteria decided before tenders are opened. Price is obviously important, but it's not everything. Consider the contractor's track record on similar projects. Have they built townhouses before, or is this their first? Check their financial capacity — can they actually fund the job's cash flow, or will they be chasing progress claims to pay last month's subcontractors? Review their proposed programme critically. Is it realistic, or have they compressed it to look good on paper? Look at their key personnel — who will actually run your job day-to-day? And examine their understanding of the project. A tender that addresses site-specific challenges (difficult access, noise restrictions, heritage constraints) shows a builder who's actually thought about your job.

Beyond the numbers, compare what each tenderer has included and excluded. Create a scope comparison matrix that lines up every major item across all submissions. Where one tender excludes something the others include, adjust the comparison price accordingly. Where tenders include provisional sums, understand exactly what's provisional and why. Provisional sums are estimates for work that can't be accurately priced yet — they get adjusted to actual cost during the build, so they're a source of future variation.

After evaluation, you might shortlist two or three tenderers for interview or clarification. This is your chance to probe their understanding, meet the site manager, and discuss programme assumptions. It's also where you negotiate — not to beat down the price unfairly, but to resolve ambiguities and align expectations before contract execution.

The tender process sets the tone for the entire construction phase. A well-run tender — clear documentation, fair process, reasonable evaluation period — signals to contractors that you're a professional developer who will manage the project properly. A messy tender — incomplete drawings, unrealistic deadlines, constant scope changes during the tender period — signals the opposite. Experienced contractors price that risk. You'll pay more for being disorganised, even if you never see it itemised on the tender form.