How to Analyse a Builder’s Tender

The easy way to ensure you receive maximum value from your contractors

So, you’ve gone out to tender for your latest project and received scores of proposals in return, but there’s just one problem:

At first glance, every contractor who submitted a tender looks like they could be perfect for the job at hand, presenting a unique challenge when it comes to choosing just one to award your project to.

To overcome that challenge and ensure that you’re entrusting this vital work to the absolute best contractor for the job, you need to pay a much closer look at the actual tender document itself.

Today, Bhangals Construction Consultants offers our expert advice on how to effectively analyse a builder’s tender to guarantee maximum value for your next project.

First though, a quick tip on how to make your life easier when it comes to tendering a construction process.

 

Use a Bill of Quantities and Schedule of Works to Guarantee Like-for-Like Comparisons

Can you imagine how much more difficult it would be to compare several builders’ tenders if each one quoted for different materials, quantities, and labour hours?

By far the easiest way to eliminate complications and confusion from the latter stages of the tender process is to produce a complete Schedule of Works and make this available when going out to tender.

Include a comprehensive Bill of Quantities in this document to ensure that every contractor is quoting for exactly the same quantities.

You can read more about how to do this in our recent article: Save Thousands With a Schedule of Works.

With that in place, you’ll have a much easier time carrying out the rest of these top tips for analysing a builder’s tender.

 

Check, Double-Check, and Check Again

Now that all those tenders have been submitted, it’s time to tackle the vital job of assessing each one. Your first task here should always be the same:

Ensure that every last detail has been accounted for by the contractor.

This is where that aforementioned Schedule of Works really comes into its own.

You can use this to check and double-check that the tender covers every last item of material, every last piece of equipment, and every last minute of labour.

If something is missing, now is the ideal time to find out why. That being said, if a contractor can overlook a vital detail at this early stage, you might want to ask yourself if they can be trusted not to overlook anything once they get on site.

 

Compare Like-For-Like With Other Contractors and Your Original Cost Plans

Now we come to the part you’re most concerned with:

How much is this project going to cost you?

To get the absolute best possible price, it pays to compare costs not only between each submitted tender, but also against your original cost plan.

Remember to analyse costs on an item-by-item basis, rather than simply looking at the total as some contractors may quote remarkably low numbers for some items but incredibly high ones for others.

For example, it’s not uncommon for contractors to charge inflated costs for groundworking yet reduced rates for everything else in the hopes of receiving the bulk of their payment right at the start of a project.

Ideally, payments should be spread out evenly throughout the duration of the project, with prices coming in as close to your original cost plans as possible.

 

Why Lower-Priced Tenders Aren’t Always What They Seem

You don’t need us to tell you that there’s simply no room for ‘cheap’ in the construction industry.

If a price for an individual item, or even an entire project is much lower than expected, then it’s time to remind yourself of that old cliche:

If it seems too good to be true, it probably is.

Quite apart from the possibility of contractors sacrificing quality in order to do the job ‘cheaper,’ a lower-priced tender could also mean that the contractor is reverting to one of the oldest tricks in the book:

Putting in a low-cost tender to win the project, then adding in extra claims and coming back for more money to make up the difference once a project gets underway.

Both are likely to cost you far more in the long-run, so it’s always good to be very wary of unrealistically low offers.

 

For more expert advice on construction contract tendering, contact Bhangals Construction Consultants on 03304 048 904 today.

Contact Bhangals Construction Consultancy for the cheapest like-for-like quote