Pros and cons of a tender process

Tendering provides a formal way to receive and compare quotes for your building project, but is it necessarily the best approach for your extension? Let’s weigh up the pros and cons of a tender process.

What is a tender?

In construction, a tender (or tender process, as it also referred to) is where a beauty parade of builders are invited to quote for a job by first inspecting the site, then raising queries, and finally submitting their bid using a pre-prepared quotation template provided to them by you or your architect.

Pros of a formal tender

1. The tender process will be administered by your architect, so you have the security of a familiar and trusted guide as you engage builders.
2. The formality of the process helps to weed out flakey builders.
3. The set structure of sending invitations, reviewing submissions, interviewing and accepting bids serves to attract professional builders.
4. A formal tender will include multiple schedules of work for different activities. By writing it all down, one leaves nothing to chance.
5. Parcelling up different schedules of work makes it easier and neater to subcontract the work out to different suppliers.
6. Formal tendering provides a set format for builders to quote within, making it easier to compare apples with apples.

Cons of a formal tender

1. You can administer the quote-collection process yourself. It isn’t difficult, nor should it be daunting – by now you understand the scheme as well as anyone. It also then doesn’t cost you anything.
2. The formality of the process is a double-edged sword and leads to self-selection of a certain (pricier) breed of builder. Tender documentation is exhaustive and will take a builder a lot of time, patience and technical research to fully understand. Often, builders will have a quantity surveyor in-house or on retention to price up tenders for work. This overhead will be reflected in their price.
3. On the flip side, tendering may scare off other talented builders who aren’t disposed to go through the tender process, because they can win work more easily elsewhere without needing to jump through hoops. The builder pool is therefore diminished (which is why you tend to see the same old faces winning contract after contract in the public sector).
4. Although writing out schedules of work means nothing is left to chance, the thoroughness of the schedule is only as good as the person writing it. Too often, tenders are verbose and overly complicated. There’s no benefit in writing out in words what the drawings already show on plan. If a builder can quote on plan and provide a side list of assumptions made, and considerations and exclusions to scope, then that’s a very good place to start.
5. Parcelling up work is ideal when you have various specialist tradesmen on-site, each doing one thing, as on large new-build developments. In the home improvement and renovation sector, builders will have smaller teams with multi-functional tradesmen, who won’t have the luxury of just doing one thing.
6. Set quoting formats do provide a framework for consistency, but so do quality working drawings. A well-specified set of working drawings will have the approved plans, structural designs and building regulation requirements, together with all the technical specifications and client selections, all in one place. So the working drawings themselves provide the set format for builders to quote against, allowing you to confidently compare like for like.

After weighing up the pros and cons of a tender process, we see that tenders have their place, being well suited for medium-to-large or complex projects. However, the drawbacks can outweigh the benefits when applied to classic house extensions, where tendering offers no more value than a quality set of working drawings.