Preparing a good tender involves information-gathering and decision-making. It is better to prepare the tender systematically. A good tender for a medium-sized contract worth 20,000 will take 2 or 3 days work to prepare, spread over a period of 2 or 3 weeks. Information needed 1 Work plans; information on other jobs coming up; diary; advance warning of tender; brief description of the job. 2 Site plans; bill of quantities; on-site information on materials, design, use and conditions. Do you want to bid for the job? Decisions Source of advice Team leaders Other potential clients Project client Project client Site owner Local contractors Project client Supplier companies Specialist advice Safety consultant Training provider Statutory agencies Accountant Local site knowledge Project client Training mentor
3 Detailed design for each element; good idea of team How much will it cost skills and productivity; plant, materials and other you to deliver? costs.
4 Contract details; your own project plan; site information; team certificates; path portfolio. 5 Cashflow forecast; weather trends; feasibility analysis. 6 Client decision and feedback.
Is it a risky job?
At each stage of the process decide whether you wish to proceed only continue if you still want the job, believe that you can win the tender and think that you can make a profit. You can drop out of the tender process at any stage, and usually up to 30% of bidders do, but you must let the client know immediately: failure to respond by the closing date will not create a good impression for the next job.
when work is required? Is your team good at this type of work? Do you really want the job? Preparing a few thorough tenders for the jobs you want is more likely to win work than submitting rushed bids for every job possible. It is good practice to evaluate invitations against predetermined criteria, although there will obviously need to be some flexibility. Some factors to consider include: Does the organisation offering the work have a track record of managing pathwork. Are you confident that it is aware of its responsibilities in managing the job and is it capable of meeting them? Does the organisation offering the work have the financial resources available to pay for the work? Are you technically capable of undertaking the work? Do you have several suitably skilled staff available or are you relying on one person? What would happen if that person was not available? Are you financially capable of completing the work? Check that interim payments are available and that your cash flow can cope with the timing of these, including a contingency for delays in payment. Are you likely to be made a better offer by another organisation during the contract period? Do you have all the resources available to undertake the work at the appropriate time? Appraise the tender as early as possible after receiving the invitation as you will need plenty of time for the subsequent stages. Do not spend any further time on a job you do not wish to bid for. Keep the client informed of progress and seek extra information on any points that are unclear. Explain to the client your teams abilities and areas of special interest, as this will be useful in planning future work and helps build up a good working relationship.
If there are factors that will change the way you deliver the work, write them down and decide whether they will affect the cost. Do you know enough to predict each of these factors? If the job is not feasible or to your liking, you can pull out at this point. The site visit also gives you an opportunity to talk to the project manager face to face, to decide whether you will work well with them, and an opportunity to eye up the competition!
Estimating the cost of works is a complicated task, and different contractors may adopt different approaches. Consider the options of using different types of plant or other working methods, such as airlifting materials. This may have an impact on your costs and the price
for providing the optimum qualityprice ratio. Air-lifting materials may be more expensive, but it will create less disturbance to the site, and this may be of prime concern to the client. Talk to the client and consider offering two options and prices.
Make sure that you provide all this information and any additional requested it is surprising how many bids are incomplete, and these are the first to be rejected. If you are unable to meet any of the conditions contained in the contract, or are uncertain about how they apply, then bring this to the attention of the client and include this in your covering letter. However, do not make your bid a conditional offer by saying that it only applies if certain conditions are met clients do not like this approach. Be positive and concentrate on preparing a good method statement: this is a great opportunity to show the client that you have thought through the contract. Having a plan that is prepared and ready to deliver could put your bid ahead of a lower cost but less wellplanned competitor. Many successful contractors submit a detailed method statement for every major contract, whether the client requests it or not.
On the other hand, the tender may offer opportunities, including: making a profit at the end of a contract that reflects the effort expended and level of risk incurred; continuity of work, enabling retention of a skilled and reliable workforce; developing new techniques and gaining experience, resulting in improved skills in the team; boosting your reputation and developing a positive client relationship that may lead to further work opportunities. The price you bid will depend on many things: if you think there is a high chance of weather lay-offs, increase the price by 1015% and seek reassurances on being given extra time to complete the job. If you need work urgently and want to impress a new client cut the price by 510%. Always set your bid price at a level that more than covers all costs, and never go below this. Add a margin to your total expected costs that gives you room to manage the variables and make a profit if you are successfully able to do this. Look around at the other teams bidding and particularly the availability of skills at the time the client needs the work done many larger client organisations prefer higher prices to delayed work. Your price should cover all work anticipated, including site restoration and return visits for any remedial work (usually 34% of the construction cost). Do not bid a low core price with the expectation of adding plenty of extras when on site clients will be looking for a realistic, single price that reflects all that the job demands.
Submit your bid in the manner requested often in two envelopes and with an electronic copy and well before the closing date set. Ask the client how long a decision is likely to take: this can vary from 3 days to 6 weeks depending on the complexity and size of the organisation. There may be a long delay if the information is being relayed to grant aid partners for their approval, but the client should let you know if this is the case. You may be asked for additional information, and a prompt turnaround is essential. The winning bidder will normally be contacted by telephone and given a brief period to confirm acceptance. Unsuccessful bidders will receive a letter a few days later. It is not standard practice for clients to disclose the winning bid price because of the relatively small number of teams bidding. Whether or not you are successful, contact the client for some feedback: you have spent several days preparing the bid, and feedback will aid your success next time. Feedback from the client to contractors should include the following: price, quality of tender, future prospects. How did the contactors price compare with the winning bid? Give a percentage above or below, even if actual prices are not disclosed. How did the contactor rate for team ability and skills? Are there gaps in the teams abilities that need to be addressed? Did the bid cover everything that was needed? Did the contractor provide the right level of information and did the client understand how the contractor would deliver the job? You should let the contactor know of future jobs, and discuss the abilities and availability of the contactors team.
Competitive tendering: some good practice pointers for contractors and clients
Be transparent: explain how the tendering process will work, how bids will be assessed and provide feedback Be consistent: provide the same level of information to all involved and confirm verbal instructions or communications in writing. Be positive: emphasise the benefits of a thorough and rigorous tendering process better planning, fairer assessment, less dispute. Maintain perspective: the cost of tender preparation should not be greater than the expected contract value. Timing: allow adequate time for return of tenders. Some bids may require much more preparation than others. Be realistic: do not underprice work. Path work is demanding, and you do not want to working for nothing or at a loss. Be thorough: ensure that you understand all of the contract conditions and their implications.
If you are in doubt about preparing a tender seek advice: talk to your local enterprise company; attend a short course; or approach an experienced firm and ask to shadow their work. Tenders for work are the most complex and important pieces of paper in pathwork: how you approach and prepare your bid not only tells others about how you do business, it is also a legally binding contract if you are successful and win the job.