Building Tendering Process

Building Tendering Process

One of the most tried and true methods for delivering value-for-money and cost effective methods for procuring buildings for clients is the traditional tender process. This method is even more effective in soft building markets where builders are finding themselves without work and they need future projects to maintain trade relationships and cashflows.

Utilising the building tender process is certainly not preferred by builders as it places them into a competition scenario and carries significant costs to the builder’s business. However, it allows the client to make an informed choice of builder based on cost and experience.

If the tender documentation is distributed to five or six pre-selected builders and depending on the size and scope of the project – it is not uncommon to have a builder pull-out from the process. However, clients with three of four builders to choose from, are always going to find a more cost-competitive and value-for-money outcome from the building tender process than the client who immediately engaged a builder prior to completion of the design and contract documentation process. Many clients are led to believe that the builder will provide a design without cost but remember: “…the user always pays…” In fact, engaging a builder prior to completion of a design and documentation is the highest price any client will ever pay. Most builders will invariably use a standard industry contract (i.e. HIA or MBA) without the inclusion of an architect or superintendent to supervise the building works – which is typically drafted in favour of the builder’s interests. For example, a standard industry contract will not make allowances for the payment of liquidated damages to a client should the builder take longer than the agreed building program. The ABIC suite of contracts and AS 2124-1992 make allowances for an architect to superintend the building works and certify progress payments to the builder – thus honesty and integrity is drafted into the contract and the client’s interests are also considered rather than just the builder.

The key to a successful building tender process is an accurate, thorough and complete set of architectural and consultant drawings that have co-ordinated information without anomaly. Evidence that would suggest a successful tender would include:

  • few tender queries by the builders
  • few addendums drafted by the architect
  • a small range of cost variance between tender submissions
  • tender prices are within the client budget


Contact us for discuss your building and design requirements or visit our Architectural Design, Documentation + Contract Administration page for additional information.

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