Tendering In Construction

Construction tendering faces challenges with time constraints, competition and transparency. Success requires clear requirements, fair evaluation, and thorough verification. A systematic approach creates efficient processes that benefit contractors and clients alike. Achieving a high hit rate depends on understanding what is tendering in construction and how to manage the intense administrative load that comes with it.

The tendering process is a vital part of the construction industry, and in today's fast-paced and cutthroat world of slim pricing, the process is not always straightforward and can be plagued by numerous challenges. In this guide, we will explore some of the major challenges in the tendering process in construction.

What is Tendering in Construction?

At its core, tendering in construction is the process by which a client or head contractor invites parties to submit a formal bid to undertake specific work. It is the primary method for procurement in the industry, designed to ensure that the best-qualified team is selected based on a balance of price, technical competence and experience.

The Four Stages of the Construction Tendering Process

To understand what is the tendering process in construction, it helps to view it through the lens of efficiency. While every project is unique, most follow these four primary stages, which align with the NSW Government procurement guidelines for running a transparent and fair market briefing:

1. Expression of Interest (EOI) or pre-qualification

Before issuing a full tender, clients often seek an EOI to shortlist capable contractors. This stage is about proving you have the financial stability, safety record and past performance to handle the job.

2. Request for Tender (RFT)

Once shortlisted, you receive the RFT (or Invitation to Tender). This package includes the drawings, specifications, bill of quantities and the proposed contract. The challenge here is document control. 

3. Tender evaluation

The client reviews the submissions. While price is a massive factor, “value for money” is the real metric. They look at your proposed timeline, methodology and how you’ve addressed specific project risks. A clear, well-organised bid often beats a slightly cheaper but messy one because it signals professional management.

4. Award and contract

The final stage involves a letter of intent or a formal contract award. This is where the “promises” made during the tender must be codified into the project plan.

Common Construction Tendering Pitfalls that Cost You the Job

It's important to note: Tendering is a process that the majority of large-scale projects must undergo prior to breaking ground. The following list will help you identify some of the common pitfalls.

1. Time constraints

One of the major challenges in the tendering process is time constraints. Clients usually set strict deadlines for the submission of tenders, leaving contractors with little time to prepare and submit their bids. This can lead to rushed and incomplete bids, resulting in poor-quality submissions. Contractors may also be forced to outsource some of the work to other companies to meet the deadlines, which can increase the cost of the project.

2. Competition

Competition is another major challenge in the tendering process. With many contractors bidding for the same project, there is fierce competition, leading to bidding wars and low-profit margins. This can result in contractors submitting unrealistic and unfeasible bids, which can be detrimental to both the contractor and the client. The competition can also lead to corruption, where contractors try to win the bid by bribing the decision-makers, leading to unfair selection processes.

3. Complexity of projects

The complexity of the projects is another significant challenge in the tendering process. Many construction projects require specialised knowledge and experience, making it difficult for some contractors to submit competitive bids. The clients may also require a lot of documentation, certifications and licences, making it difficult for some contractors to meet the requirements.

4. Lack of transparency

Lack of transparency in the tendering process is another major challenge. Clients may have biases towards certain contractors, leading to unfair selection processes. The decision-makers may also lack the necessary expertise to evaluate the bids properly, leading to poor decision-making. This lack of transparency can lead to contractors losing trust in the tendering process, leading to reduced competition.

5. Inaccurate cost estimation

Inaccurate cost estimation is a significant challenge in the tendering process. Contractors must estimate the cost of the project accurately to submit a competitive bid. However, inaccurate cost estimation can lead to underbidding or overbidding, leading to losses for the contractor. Clients may also reject bids that they perceive to be too high, leading to the exclusion of some contractors from the tendering process.

6. Limited access to information

Limited access to information is another major challenge in the tendering process. Some clients may provide limited information about the project, making it difficult for contractors to submit accurate bids. The lack of information can also make it difficult for contractors to determine the feasibility of the project, leading to poor decision-making.

7. Legal challenges

Legal challenges are also a significant challenge in the tendering process. Clients may set unrealistic requirements, which may not be achievable by the contractors. The contracts may also have ambiguous terms and conditions, leading to misunderstandings and disputes. The legal challenges can lead to delays in the project, increased costs and damage to the contractor's reputation. 

To add a bit more context to the pitfalls above, they can often show up as:

• Losing track of addenda and sending outdated drawings to subcontractors

• Poor RFI management and missing key clarifications

• Scattered communication across inboxes, spreadsheets and attachments, which makes it hard to prove who received what and when

Open vs Selective vs Negotiated Tenders: Which Is Best?

Understanding the different types of tendering in construction helps head contractors decide how to procure their own subcontractors.

• Open tendering: Anyone can submit a bid. This offers the most competition and potentially the lowest price, but the administrative burden of evaluating dozens of bids is massive.

• Selective tendering: Only invited parties can bid. This is the preferred method for complex projects where you only want to work with proven, high-quality subcontractors. It reduces the “noise” and ensures a higher standard of submission.

• Negotiated Tendering: You deal with a single contractor from the start. This is common for highly specialised work or for repeat clients who value a long-term relationship over a bidding war. It's the most efficient method but requires a high level of trust.

How to Run a Fair and Scalable Tender Process: a Step-by-Step Guide

Step 1: Identifying the Need for a Tender

• One challenge in identifying the need for a tender is ensuring that the project scope and requirements are well-defined. To overcome this challenge, it may be helpful to involve all relevant stakeholders in the scoping process and use techniques such as workshops and brainstorming sessions to ensure that all perspectives are considered.

• Another challenge is ensuring that the budget for the project is accurate and realistic. To overcome this challenge, it may be helpful to involve a financial expert or consultant to review the project budget and provide recommendations for cost-saving measures.

Step 2: Preparing the Tender Documentation

• One challenge in preparing the tender documentation is ensuring that the requirements and specifications are clear and complete. To overcome this challenge, it may be helpful to have a third-party review the documentation and provide feedback on areas that may be unclear or incomplete.

• Another challenge is ensuring that the documentation is accessible to all potential bidders. To overcome this challenge, it may be helpful to provide the documentation in multiple formats and ensure that it is available on a publicly accessible platform.

Step 3: Issuing the Tender

• One challenge in issuing the tender is ensuring that it is communicated to all potential bidders in a timely and effective manner. To overcome this challenge, it may be helpful to use a variety of communication channels (e.g. email, social media, industry associations) to reach a wide audience.

• Another challenge is ensuring that all potential bidders have access to the same information and have an equal opportunity to bid. To overcome this challenge, it may be helpful to provide a platform for bidders to ask questions and receive clarification on any aspects of the tender documentation.

Step 4: Receiving and Evaluating Bids

• One challenge in receiving and evaluating bids is ensuring that all bids are evaluated objectively and fairly. To overcome this challenge, it may be helpful to establish clear evaluation criteria and a scoring system and to ensure that all evaluators are trained on the criteria and scoring system.

• Another challenge is ensuring that all bids are complete and accurate. To overcome this challenge, it may be helpful to provide a checklist for bidders to ensure that all required information is included in their bid.

Step 5: Awarding the Contract

• One challenge in awarding the contract is ensuring that the selected bidder meets all necessary requirements (e.g., financial, technical, legal). To overcome this challenge, it may be helpful to conduct due diligence on the selected bidder and to require that they provide documentation to support their qualifications.

• Another challenge is ensuring that the selected bidder has a clear understanding of the project requirements and is committed to delivering the project on time and within budget. To overcome this challenge, it may be helpful to include a detailed project plan and timeline in the contract and to establish clear communication channels for the duration of the project.

Step 6: Managing the Contract

• One challenge in managing the contract is ensuring that all parties are aware of their responsibilities and obligations. To overcome this challenge, it may be helpful to have a clear and detailed contract that outlines the roles and responsibilities of each party, as well as the timelines and deliverables for the project.

• Another challenge is ensuring that the project is delivered on time and within budget. To overcome this challenge, it may be helpful to establish regular project review meetings to track progress and identify any potential issues or delays.

Step 7: Closing the Contract

• One challenge in closing the contract is ensuring that all deliverables have been completed to the satisfaction of all parties. To overcome this challenge, it may be helpful to conduct a final review of the project to ensure that all requirements have been met.

• Another challenge is ensuring that final documentation and handover items are complete, including warranties, manuals, as-built drawings and defect close-out, so the project can be signed off without delays.

Tender Submission Checklist 

A lot of losses occur for reasons unrelated to capability. They come down to process control and document control, especially when multiple revisions are moving around quickly. Using a practical checklist ensures your submissions are consistent and reduces the risk of disqualification on a technicality.

Before you hit “Submit” on your next bid, ensure you have ticked off these essential elements:

• Mandatory schedules and forms — Complete every single page of the tender return schedules. Leaving even one "non-critical" form blank can lead to a non-compliant bid.

• Pricing format and GST assumptions — Double-check that your figures align with the client's requested format. Clearly state whether your pricing is inclusive or exclusive of GST to avoid any financial discrepancies.

• Inclusions, exclusions and qualifications — Be crystal clear about what is in your price and what is not. If you are excluding certain site works or specialised equipment, list them explicitly to prevent future disputes.

• Program, resourcing and methodology — Clients need to see how you will actually build the project. Include a high-level program and a brief methodology that proves you have the right staff and equipment available for the duration.

• Safety, QA and environmental documentation — Provide up-to-date Work Health and Safety (WHS) plans, Quality Assurance (QA) certifications and environmental management policies.

• Insurance, licences and compliance evidence — Attach current copies of your Public Liability, Workers Compensation and Professional Indemnity insurance, along with any relevant trade licences.

• Signed declarations and tender validity period — Ensure all declarations are signed by an authorised company officer and that you have noted the validity period (usually 30, 60 or 90 days) during which your price remains firm.

How to Modernise Your Construction Tendering Workflow

The construction industry is moving away from “spreadsheets and emails.” If you are still manually tracking which subcontractor has downloaded which drawing, you are losing hours of billable time.

Modernising your workflow means creating a single source of truth. This ensures that document control is handled automatically during the bid phase. When an addendum is uploaded, every subcontractor is notified instantly, and their acknowledgment is tracked.

Centralise documents and control revisions

Document control is where tenders are won or lost. When the tender pack changes, every bidder must be pricing the same set of drawings and specs.

• Store all tender files in one central location.

• Make revisions and addenda easy to identify.

• Ensure everyone is working from the latest version, not a forwarded email attachment.

• Keep an audit trail of who received which update and when.

Replace inbox tendering with structured workflows

Email threads are hard to search, hard to hand over and almost impossible to audit. A structured workflow makes it clear what is outstanding at any point in the tender.

• Track tasks by trade package and due date.

• See which subcontractors have opened documents and responded.

• Follow up on missing quotes without relying on memory.

• Keep notes and decisions linked to the tender, not in personal inboxes.

Manage RFIs and clarifications in one place

RFIs are essential to reduce scope risk and defend pricing assumptions. Modern tendering keeps RFIs visible, traceable and consistent across all bidders.

• Log RFIs with owners, dates and response status.

• Attach responses to the relevant trade package or document.

• Share clarifications fairly across the tender field where required.

• Reduce last-minute repricing by resolving questions earlier.

Standardise bid packages and evaluation

Consistency is what makes tendering scalable. Standard templates and checklists reduce omissions and speed up evaluation.

• Use repeatable tender templates for common project types.

• Build pricing schedules that force like-for-like comparisons.

• Apply a scoring model alongside price to compare value for money.

• Record evaluation notes to support transparent decisions.

Reduce tender risk with better visibility and reporting

When you can see tendering in construction progress in real time, you can act early rather than firefighting at the deadline.

• Track quote coverage across trades and identify gaps fast.

• Monitor addendum acknowledgements to avoid revision disputes.

• Spot pricing anomalies before submission.

• Improve your hit rate by capturing why you win and lose.

Centralise your bids with Plexa

The tendering process is critical, and even when operated correctly, it is not without its challenges, which can lead to poor-quality bids, unfair selection processes, low-profit margins and damage to the contractor's reputation. It is essential to address these challenges to ensure a transparent, fair and efficient tendering process in the construction industry.

Plexa’s tendering contract management software helps you create a central portal for bid documents, manage RFIs and addenda with version control and ensure every quote is based on the latest project revision. If your team is also looking to streamline procurement across trade packages, Plexa’s construction procurement module supports a more consistent process for inviting, comparing and awarding subcontractor tenders.

If you want to lift the hit rate of your tendering in construction, the goal is simple: reduce admin noise, tighten document control and spend more time on scope, methodology and risk — the parts that actually win work.