The construction industry is pretty unique when compared to other sectors. There are plenty of reasons, but the biggest is the risk of bodily harm. For example, a hammer tumbling four stories onto your head or injuries from earth-moving equipment.
There is a lot of pressure on on-site managers to award public construction and maintenance tenders in the UK to companies with an excellent safety record and a reputation for high-quality builds. The best way to make this happen is to use the correct process for construction work tenders that will reveal the best contractors for the job.
We will look at the different types of tenders in the construction industry, their pros and cons, and tendering best practices to increase your chances of landing lucrative building equipment contraction contracts.
Understanding UK Construction Procurement
Let’s summarise the UK construction tender award process.
1) Open Construction Tenders
Open tenders throw the contractor’ doors wide so that everyone interested can submit a bid. Tender notices are published on tender alerts platforms for all to see. Tender notices include details for tender submission, project details like eligibility criteria, tender documentation, tender evaluation, and the timeline.
One of the primary benefits for contractors is tender accessibility, enabling all types of businesses to submit bids, including SMEs and those new to public sector tendering. This complies with the Procurement Act 2023, which levels the playing field so each tender is evaluated fairly.
One of the primary benefits for public sector organisations is access to a wide supplier pool where competition between companies results in creative solutions and innovative processes.
The process is transparent by nature, which is also in line with the requirements in the Procurement Act.
When is the best time for SMEs to submit bids? As early as possible to take advantage of early engagement opportunities.
2) Selective Tenders
With selective or restricted tenders the doors are still open but only pre-approved contractors can apply. It’s a two-stage process because suppliers must be pre-approved before entering the limited supplier pool. Once in, they must submit bids the traditional way, where they will be fairly assessed before the contract is awarded.
The process is great for public sector buyers because the suppliers in the pool are all qualified, suitable candidates.
Unlike open tenders, which can be used for virtually all types of projects. Selective tenders are best for complex projects with a high degree of specialisation.
This process benefits contracting authorities because they don’t have to go through dozens, maybe even hundreds, of submissions, winnowing out the unsuitable and unqualified contractors. Not only does this save an awful lot of time, but it also cuts down on admin.
The downside is that it’s difficult for SMEs and newbies to make pre-approved lists because they don’t necessarily have the previous experience or track record to support their bids. Instead, the same suppliers are often invited to bid on contracts, which locks the supplier pool and bars entry.
SMEs must craft their tender response carefully to prove they have much more value to offer than some of the larger enterprises in the public sector.
3) Negotiated Tenders
In negotiated tendering, the door is open for one supplier only. That supplier is pre-qualified, so there is no doubt about their ability to deliver the finished project. What exactly the finished project looks like is part of the negotiation process. Only single suppliers are invited to tender because the project is highly specialised or complex.
Negotiated tenders in the construction sector don’t always tick the transparency box because little of the process is conducted publically. There is a slight risk of favouritism because contractors and contracting authorities have a long-established business relationship.
Sometimes buyers and contractors each have a stake in the project. In joint construction business ventures like this, roles must be very clearly delineated with very specific details about their responsibilities.
Negotiation isn’t a once-off event at the beginning of a contract. Communication lines are always kept open in case something comes up that affects the contract, like a sudden drop in the market or an accident at one of the factories where materials are sourced, which causes significant delays.
4) Framework Agreements
Framework agreements are between the public and private sector, framework providers and contractors. They’re handy platforms that can divide big projects into manageable lots or mini contracts that are ideal for SMEs. Typically, suppliers apply to join a framework and are only admitted if they meet qualifying criteria.
Like restricted construction tenders, this limits the supplier pool, but it ensures that those in the pool are qualified to deliver the contract successfully.
A potential downside to this is limited competition. Because they are approved, some suppliers see this as an easy route to secure public sector tenders, but it doesn’t work that way. Often contractors must follow a traditional tendering process to capitalise on construction opportunities.
In this instance, the tender process can include:
- Two-stage tendering
- Single-stage tendering
- Direct awards
So, to be successful, increase their chances of consistent work, and establish beneficial buyer relationships, suppliers must keep innovating.
Frameworks, Communication, and Metrics
Framework agreements facilitate communication so everyone is on the same page or to move tender processes briskly forward. There’s usually ongoing risk management, which helps crucial decision-making at any stage during the project.
Frameworks typically contain metrics for performance analysis to ensure contractors maintain a high degree of quality and comply with industry and project regulations. The setup facilitates communication and relationship-building among buyers, suppliers, and key stakeholders.
5) Design & Build Contracts
Design and build construction contracts are a two-in-one deal. Architects and builders collaborate on the projects, which cuts time and saves money in the long-run. The contracts are convenient because there is one point of contact, which is great for quick and easy communication.
Collaboration and communication also facilitate decision making because both parties are on the ground, as it were. If decisions have to be made quickly they are easily (and sometimes immediately) accessible to discuss options and problem-solve sudden challenges, for example, a collapse in the supply chain.
They are best for very complex contracts that require architects and builders to collaborate at each stage of the construction process.
The Importance Of Tender Processes In Construction
Choosing the right type of construction tender is important in all fields, sectors, and industries, but more so in construction and infrastructure tender opportunities because quality is critical over the very long term. You don’t want bridges to collapse during a gusting wind or for walls to crumble in a much-needed local clinic.
To avoid these risks (and many more) public sector organisations must choose contractors based on quality and value, not just price. This means all contracts are evaluated fairly – no bias or favouritism.
Value for money is an essential requirement, so tender evaluation and award are based on a comprehensive view of services. It also includes social value, which is mandated in the Procurement Act 2023.
Fairness and value enable SMEs and firms with previous experience to enter the market, which increases competition and drives innovation.
Suppliers, meanwhile, must choose the type of construction tender that matches their services, goods, or works. Submitting bids on relevant contracts saves time and enhances their chances of winning competitive, lucrative tenders in the UK.
To do that, suppliers must find the right bids. Tender alerts platforms are the way to find construction tenders go. They can register and enter criteria for the types of construction tenders in the UK they’re looking for.
Supply2Gov provides a tender alerts platform with a database bigger than the government’s official Contacts Finder. Register now and relevant construction contract notices will wend their way to your inbox.