In 2020 UK Prime Minister Boris Johnson promised to ‘build, build, build’, saying that he wanted to use the period of recovery after the initial Coronavirus crisis “to tackle this country’s great unresolved challenges” and get UK construction moving.
The Infrastructure and Projects Authority has revealed that the 2020/21 National Infrastructure and Construction Procurement Pipeline has an estimated total contract value of between £29 billion and £37 billion.
This makes now an excellent time for new players to enter the marketplace. Learn how to win construction tenders by reading our “Construction Tendering 101” guide.
What is tender in construction?
Put simply, a tender means contract opportunity and the procurement process is sometimes known as ‘tendering’.
When a construction buyer decides to purchase any goods, works or services, it publishes a contract notice (or tender notice).
In the construction industry, the range of tenders available in the UK and the Republic of Ireland is vast. Plastering the wall of one classroom in one school may be a relatively simple tender, yet construction tenders can quickly become complex when it comes to building entire new hospitals or government buildings. Before you even start searching for construction tenders, a great first tip is to fully understand what your organisation can realistically achieve, taking into account your experience, size, location and financial situation. What do you want to gain from working in construction? What can your organisation offer that sets you apart from other organisations?
Once you understand your overall business strategy and can deliver it with some conviction, it will be much easier to find the construction tender that is perfect for your business.
During the selection stage a PQQ will ask for all of your organisational information – name, type of company, VAT number, registered addresses and so on – which paints a clear picture of who you are, what you have done before and how you did it.
BiP Solutions Ultimate Guide to Procurement notes that:
“The PQQ will ask questions about the financial and technical experience of your company and will seek evidence relating to issues such as Health and Safety, Equalities, Quality Control (eg ISO)and Qualifications, as well as requiring references from past clients and perhaps your bankers.
Are you a Living Wage employer? This is becoming a crucial question your business must answer if you’re to be successful in public procurement. Recently in Scotland, being a Living Wage employer became a requirement for all firms looking to win business with the Scottish public sector.”
Build, Build, Build
The Prime Minister announced in June 2020 that the government is investing in shovel-ready infrastructure projects to create jobs and support economic recovery across the country.
Projects funded include:
- regeneration of town and city centres
- green infrastructure and clean energy
- transport and digital connectivity improvements
- unlocking of housing and business sites
- support for SMEs and learners
The government has confirmed that:
“The successful projects (over 300) are expected to deliver up to 85,000 jobs, over 1,500,000 sqm of commercial floor space, unlocking 45,000 homes, almost 1,000,000 sqm of public realm or green space improved or created, over 50,000 new learners assisted, and 65 million kgs of CO2 emissions saved.”
These projects will bring opportunity to suppliers across the construction industry and many will be suitable for SME businesses.
SMEs are vital to construction tendering
With positive changes being implemented within the construction industry a sharp rebound in construction output and project start is forecast, as the construction sector recovers from COVID-19. Glenigan predicts that by 2022, the value of the underlying project starts is forecast to total £52.4 billion, just 1% below 2019 levels.
SMEs are key drivers of today’s economy in the UK and will play a key part in the government’s construction plans. They provide specialist thinking, innovative capabilities and agile ways of working – often demonstrating openness and collaboration, which larger organisations can sometimes lack. These qualities are essential to provide the more cost-effective, productive and environmentally conscious construction required for the future.
The construction industry relies heavily upon small and medium-sized enterprises – firms generally with fewer than 50 employees. Such firms enrich the local community of which they are an integral part and help keep the UK economy going strong. SMEs, therefore, play a key role in the UK construction tendering process. In recent years, a slew of important statistics has emerged to support the central role that SMEs play throughout the sector.
New measures to support SMEs and the supply chain
For SMEs to continue to thrive and drive greater value across the economy, both locally and nationally, appropriate procurement policies need to be in place to give them a fair opportunity to win business. In its SME Action Plan, launched in March 2019, the UK Government pledged to spend £1 in every £3 on small businesses by 2022 either directly or as part of the supply chain. Small Business Minister Kelly Tolhurst also announced that the Department for Business, Energy and Industrial Strategy (BEIS) will spend an additional £35 million with SMEs to level the playing field for smaller companies bidding for government procurement contracts. Work is currently being undertaken to ensure these goals are met – meaning even greater, fairer opportunities to get a slice of the construction procurement action for SMEs seeking to grow their business.
How to tender for construction work?
Once you have found the construction tender relevant to the services your business supplies, your next step is to ensure that you meet the minimum requirements. You can do this by consulting the Contract Notice and the tender documentation.
The Contract Notice sets out general information about the tender – the type of construction work required, the date when work on the project will commence and the contracting authority issuing the tender.
It will also state the minimum requirements your organisation will need to meet for you to apply for the tender. Examples of such requirements may be that all potential tenderers need to be an officially registered member of a professional body or be able to prove that they achieve a certain turnover each year.
Tender requirements such as a minimum annual turnover can be a barrier for SMEs or micro-businesses to achieve, especially in the construction industry. With over 1.6 million organisations labelled as SMEs in the UK (according to PBC Today, February 2019 statistics), 20% of these are construction industry SMEs. Construction SMEs are a crucial driving force across both the sector and the wider UK economy. If your organisation is a construction SME, a great way to grow your business in procurement is by trying to win smaller construction tenders that bigger companies do not apply for. Build up your experience and grow your knowledge in procurement, showing that you have credible evidence of previous successful construction projects. This will enable you to build up a portfolio of previous public sector work – and references – to show that you have the experience and knowledge behind you to win the bigger construction tenders. In addition, winning public sector work may help you to grow your business and expand your reach.
The Contract Notice will state where you can download the full tender documentation, usually for free, which will contain all the details of the tender. You will need to read these documents thoroughly as they will include details of how the selection questionnaires and final tenders will be evaluated, and how each question will be scored by the contracting authority. Understanding the scoring and the weighting placed by the authority on each question is crucial to winning the tender. If the contracting authority states that 60% of your tender bid is scored on how environmentally friendly and sustainable the project is, it shows the authority’s priorities and indicates that you must focus your efforts on achieving this element, rather than – for instance – how cheaply you can deliver the requirement.
Top tips for winning construction tenders
- Don’t assume that the contract notice you’ve received is entirely correct and accurate. Instead, confirm the tender procedure, legislation and estimated value. Make sure you’re clear on all abbreviations and terms used. The world of contracts can be full of acronyms, so make sure you’re clear on all meanings.
- Ask questions about anything you think anything is unclear.
- If your response is paper-based, make copies of all your tender documents and store the originals in a safe place.
- Consider creating a ‘bid team’ comprising a few members of staff for larger contracts. Different perspectives will allow you to create a thorough and comprehensive bid.
- Don’t be put off by the tender documentation – you can always ask for help as directed within the document itself.
- Provide all the information requested. If you can’t provide some of the information, for whatever reason, ask for advice.
Find construction tenders with Supply2Gov
The construction industry in the UK accounts for approximately 3 million jobs, providing a total of 10% of UK employment, and is a driving force for the UK economy. This means there are huge volumes of construction tenders out there to be won if you have the right tools and market insight to get there.
New to the tendering business? We make the tender process easy!
Supply2Gov specialises in helping organisations of all sizes that are new to procurement to find and win construction tenders that are right for their business.
With our Tender Alerts service, gone are the days of sifting through numerous portals across multiple touchpoints trying to find the right opportunities. Our Tender Alerts service does all the hard work for you.
We monitor over 3000 different sources of contracts. All you have to do is set your preferences in your Email Alert Profile, and let the opportunities come to you.