Client tips on how to gain an edge with your tender returns (Pt 2)
PART 2 OF 4: HOW TO GAIN A COMPETITIVE EDGE WHEN TENDERING FOR £250k – £3M CONTRACTS.
Before we get stuck in, let’s have a quick recap…
WHY DOES GAINING AN EDGE BEFORE & DURING TENDER MATTER?
This is a fair question. If you submit the lowest price surely that should be enough to win, right?
Smart clients (the kind you want to work with) see the construction phase as the riskiest part of the process (and Contractors as the riskiest appointment).
This means that if a contractor submits the lowest tender price but they have a poor reputation or vague schedule of work, they will still lose.
The downside of making a poor impression during the tender stage is very expensive. Alternatively, the upside is very good.
Not only can it lead to tender to success, but even if you aren’t successful, it could make you a front-runner for another project.
HOW CAN CONTRACTORS GAIN AN EDGE DURING THE TENDER PROCESS?
All experienced contractors are familiar with this process.
Broadly speaking it is composed of 10 stages (from a client’s perspective). This is how you gain an edge at each stage of a £250k – £3m tender:
1. Tender List Creation
For small projects, tender list creation is almost solely about relationships.
The way to gain an edge here is through networking, awareness and word of mouth. Most small-scale clients don’t know any contractors and even fewer see them ‘in the wild’.
- Simple tactics such as leaflets, after-sales engagement with old clients and posting on social media (Facebook and LinkedIn) will generate leads and produce results.
A more unconventional tactic is to approach and befriend small architects, interior designers and project managers. Establishing a good relationship with these professionals is efficient and effective because they can vouch for your ability and provide a steady stream of work.
The best way to do this is to engage with their local membership organisations (RIBA, RICS etc) and offer to sponsor events or give talks. Architects often work with inexperienced staff so an offer to provide construction and detailing advice via CPD or consultation would be warmly received.
Accepting the invitation is a business decision. However, this is a contractor’s first real opportunity to make a good impression. Site visits are required to get to know the project. However, this exercise becomes much more useful if you can get to know the client (and their needs) as well. An engaged/professional client will want to meet you anyway.
In our experience, the contractors who ask for a design presentation from the Architect (preferably with the client present) tend to feel more familiar and engaged. The presentation also allows you to demonstrate your expertise. As mentioned before, Architects can be a great doorway to more projects. Even if you’re unsuccessful, making a good impression on the Architect will pay dividends.
If you decline the tender, you can still make a good impression by declining politely and also sharing the kinds of projects you have recently completed or are working on.
You may not want to be on this list, but you may want to be on the next one.
3. Tender Issue (Docs are sent out)
Once tender documents are sent out.
An easy way to stand out is to check with the design team whether there is a preferred tender return format. Or confirm whether the format you are intending to return the tender in is acceptable.
If the team hasn’t expressed one it’s unlikely you’ll get a strong steer. However, simply asking allows you to demonstrate your willingness to work together and communicate well.
4. Tender queries/ RFIs during the tender stage
Unless the tender docs are particularly poor, tender queries at this scale are rare.
However, it would be shrewd to make queries that allow you to demonstrate your expertise and diligence.
An incisive question could save both you and the client a lot of pain and cost. For example, very few domestic clients are familiar with the party wall act and their obligations under it.
Another strategy that could pay dividends would be to confirm the sustainability ambitions of the project.
This could be an effective way of demonstrating sustainability credentials and up-selling.
Say a client wants an extension.
A simple query about the existing properties EPC and an offer to cost separate retrofit works (insulation, solar panel installation, car charger installation) could not only help you secure the contract but increase its value and help develop a new line of work.
5. Tender Returns
At this scale, the tender returns will be relatively straightforward and reviewed in a simple way.
Although, if it’s for private residences the clients may be more sensitive to presentation. Their thinking is often, ‘if they can’t format a tender return, can I trust them with my home’.
The best way to stand out and communicate quality and reliability is through clear, attractive graphic design coupled with commentary and rationale (doesn’t need to be a lot). Subtle use/current/future projects can also help.
If the development/design team need to decode and interpret your tender you’ve probably lost. Even if you do win the tender, the lack of clarity is more likely to leave you with a painful project and/or a commercial loss.
There are freelance graphic designers on platforms like Fiverr who will review and brand all your documents. Talking to a Project Manager or Employers Agents about the most accessible format for them will also save you a lot of pain.
It may feel challenging at first, but once the system is locked you’ll be able to put your best foot forward effortlessly. This will free up more time for estimation and subcontract tendering.
C-Link’s whole approach is based on best-practice tendering. It standardises the whole tendering process and gives a great insight into how tenders are considered client side.
6. Tender Analysis
There isn’t much that a contractor can do at this stage to gain a greater edge.
This is where your effort to create a clear and attractive tender return pays off. Or your unclear, high-level return wastes the time of the client team and yourself.
7. Value Engineering / Initial Negotiation and clarification
This stage is important because it can make or break a project. The key to standing out at this stage is creativity.
Best case scenario; your client is commercially sophisticated and knows how to conduct a pre-contract VE (Value Engineering) exercise.
Worst-case scenario, they’re upset that all tenders have come back to high and they don’t know what to do.
In this scenario, a contractor with a deep supply chain and strong purchasing power will really stand out and win confidence. To demonstrate this, we’d recommend pre-emptively flagging items and specifications that you are confident you can match the quality of while reducing cost.
Floor, roof finishes, kitchens and bathrooms are the most effective Value Engineering areas.
8. Tender Award (Contractor is selected and unsuccessful are notified)
Good manners and a gracious receipt will be sufficient for this stage. The worst thing you can do at this stage is be rude, unreachable or evasive.
It can be tempting to keep quiet about any problems you noticed in the contract docs.
Surfacing any concerns you have will help build trust and avoid problems later.
9. Building Contract Negotiations and clarifications (Insurances, Contract Sum Analysis, Appointments, Novations etc)
If you’ve got to this stage (well done) the best thing you can do here is work closely with the team on final spec and insurance requirements. Any work that can be done in good faith ahead of signing to get the ball rolling (discharging planning conditions, surveys, confirming finishes with samples, site clearing and welfare set-up) should be done.
10. Contract Signing and Commencement
It’s more typical on larger projects but a small gesture to set the tone for working together would be a smart move and well-received. Especially on private domestic projects.
On smaller domestic projects, every chance you have to create and crystalise a good impression should be taken. It’s the key to earning word-of-mouth recommendations.
HOW ELSE CAN I GAIN AN EDGE IN COMMERCIAL TENDERING?
C-Link is helping market-leading contractors save hundreds of man-hours by digitising and streamlining their tender processes.
If you’d like to discuss how C-Link can help you do the same, drop us a note here.
If you’re not ready but you’re intrigued, why not check out our platform?
About Martin Prince-Parrott
Martin is an ESG Real Estate Developer and former Award-Winning Architect. He’s spent the last decade designing and developing a billion-pounds worth of mixed-use institutional-scale real estate. He’s worked with and for market-leading companies such as Gensler, Microsoft, Barratt Homes, Legal & General and Barclays Bank.
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