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What could possibly go wrong?

Dear What could possibly go wrong,

When a tender closed yesterday I only got one submitted, which is too high. I rang the other two tenderers, one said they didn’t realise the closing date was yesterday. The other asked if they could put it in next week sometime when they’ll have a bit more time to look at it. Is there anything that can be done to make sure that I can get competitive tenders?

 

 Dear ArchiTeam member,

First of all, there are formal ‘Rules for Tendering’ in an Australian Standard AS4120-1994, worth a look.

Tendering is the start of the phase where you are in least control of the project, not a good feeling. Builders seemingly say things that they don’t mean, are indifferent or can’t wait to get into it cos they haven’t got any work and just need something.

Also, there are the market forces at play like any event where there is competition. For the builder, a tender is a bit like an auction, there is a point at which, for a number of reasons, it is just not worth it. This will mean a range of prices and possibly exclusions or conditions added by the builder in their tender submission.

The most important aspect of getting some order in the process is putting a ‘selected’ tenderer list together. This means that there must be a ‘selection process’ to find builders who you can work with and are interested in the project. To do this you must get information from the builders to allow you to assess their previous work and performance during the construction / defects phase. Their previous projects should be similar to yours. Your attention to detail here will pay dividends during tender and construction if you can find a builder that will work with you instead of descending into an adversarial battle.

Where to start – request a list of previous projects with contact details for the client and architect. It is essential that you ring to check all references with good probing questions. People are usually happy to let you know if things went well or if there were problems.  If the builder can’t provide a list of previous work move onto another who can. Put your assessment into a formal report for your client, this will help you focus on the realities of the information.

Allow at least two months for the process, you’ll need to keep in touch with the builders because some will drop out for various reasons.

The minimum number of tenderers for the final selected list is five; this will usually result in getting three ‘genuine’ tenders giving you a high, low and medium range that you can report on to the client. To get five you will need to talk to a whole lot more than that – it is very time consuming and frustrating. Remember that you will need to establish a working relationship on the project with one of these builders so you’ll need to talk to all of them like they are going to be the contractor. Respect the fact that they will need to put in a lot of time an effort chasing subies for prices and taking a punt on other areas to submit a tender. One builder I spoke with about this said that the builder who got the job is usually the one who got the most things wrong. Another told me that when a tender was accepted he immediately went looking for all the things that had been missed to work out how to get around them.

Then there are the others who want to start negotiating a change of terms as soon as they win the tender – this is not good. When this happens don’t mess around move to the next lowest or you will have a builder who will be constantly arguing with you all the way through the project. The time to negotiate is during the tender, not after when they think they can squeeze you.

The tender documents must have an ‘information to tenderers’ containing all the basic information as well as any special conditions of contract / planning / permit conditions etc that are unusual. This is the place to draw the tenderers attention to these so that they don’t get ambushed by missing something buried in the documents. It is hopefully the start of an open working relationship.

Keep in touch with the tenderers during the tender period; this can be through a phone call or emails. Also call about a week before the closing date to make sure that they are still submitting a tender.

There will still be times when things don’t go as you would like but allowing enough time for a good process will reduce the risk.

Peter Finn, architect.
ArchiTeam director.

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