Client tips on how to gain an edge with your tender returns (Pt 3)

PART 3 OF 4: HOW TO GAIN A COMPETITIVE EDGE WHEN TENDERING FOR £4M – £9M 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?

Not quite.

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 £4m – £9m tender:

1. Tender List Creation

For larger projects, tender list creation isn’t solely about relationships. But it helps. The way to gain an edge here is through networking, awareness and word of mouth. Due to the complexity, most clients working at this scale prefer track record to familiarity.

Newsletters, digital brochures, and favourable press will all help convey competence.

If a warm introduction isn’t possible. The next best way to reach these clients is by direct contact. Offering to come in and give a presentation on the business and recent projects will often be well received.

A more unconventional tactic is to approach and befriend the project architects, interior designers and project managers. Establishing a good relationship with these professionals is efficient and effective. Not only can they vouch for your ability, but they can become a steady stream of work in their own right.

The best way to do this is to engage with their local membership organisations 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.

2. Invitation to Tender

At this level accepting the invitation is a strategic business decision. Tendering for such large projects requires a lot of work and clients often invite 4 or 5 firms to tender rather than 3.

However, this is a contractor’s first real opportunity to make a good impression. Site visits are a standard. However, this exercise becomes much more useful if you also get to know the client and their needs. 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)

At this contract level, tender docs should be issued with branded, standardised proformas to allow for direct comparison between the returns.

If this isn’t provided an easy way to stand out is to check with the design team whether there is a format they would like the information to be returned in.

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, communicate well and produce good work.

It’s simple but effective.

4. Tender queries/ RFIs during the tender stage

Tender queries at this level are very common.

These queries give the design team a good idea of which contractors are seriously reviewing the project information. The queries are often collated together and answered together but informal communication will still occur between the Project Manager and the client.

Tender queries are a great way to demonstrate your expertise and diligence.

An incisive question could save both you and the client a lot of pain and cost.

Another strategy that could pay dividends would be to confirm whether the client team would appreciate an additional cost for a more sustainable scheme.

This could be an effective way of demonstrating sustainable credentials and up-selling.

5. Tender Returns

At this scale, the tender returns start to become complicated. They’re large, complex and loaded with varying levels of risk.

Ideally, a data room should be provided for each contractor. If one isn’t created, I’d recommend creating one for the client team to download the return from.

Not only is this easier than sending a large email, but it also provides a digital audit trail for the process. This allows a contractor to demonstrate that they work in an organised manner.

Even at this scale, the thought process of the client can still be ‘if they can’t format a tender return, can I trust them with my very expensive project’. Additionally, Developers also need to convince their construction finance lenders that this contractor is reliable. Presentation helps with that.

C-Link’s whole approach is based on best-practice tendering. It standardises the tendering process and provides a great insight into how high-value tenders are scored by clients.

6. Tender Return Analysis

There isn’t much that a contractor can do at this stage to gain a greater advantage.

7. Value Engineering / Initial Negotiation and clarification

Material Cost inflation has made Value Engineering even more important.

While the most teams are good with costs, they are less familiar with lead times and supply chains.

In the Contractor’s Proposals, it would be advantageous to add supporting commentary on lead times and materials scarcity. This can be in relation to substituted specs or the base tender spec. Both would be helpful to the design team and would communicate mastery of your supply chain.

At this scale, a contractor with a deep supply chain and strong purchasing power will have an advantage and win confidence. In place of this, a contractor with clear commercial awareness will also stand out.

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.

Don’t.

Surfacing any concerns 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 is 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) can probably be done under a letter of intent with agreement on maximum spend.

Retention can be a controversial topic at this stage. More and more insurers and lenders are expecting 24-month warranty coverage. Don’t be surprised by this. If the project is phased this may mean agreeing on separate defect periods per phase rather than one for the whole project.

10. Contract Signing and Commencement

On projects of this scale, it makes sense to celebrate the new or ongoing working relationship. This should include the design team as well as the client.

It’s a small gesture but it can set the tone for working together.

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?

 

Photo by Josh Olalde on Unsplash

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.