Construction Tendering: A Comprehensive Guide for UK Business Owners

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Tendering in construction can be complex, involving different specialisms, technical details, and thorough procurement steps. Construction businesses need a clear understanding of these steps to put forward successful tenders and secure profitable projects.

This guide explains the key parts of construction tendering, including important definitions, different types of tenders, ways to manage risks, and practical advice to help your business succeed.

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What is Construction Tendering?

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Tendering is when clients ask for bids from contractors to carry out construction work or services. The National Building Specification (NBS) describes tendering as:“…the process by which bids are invited from interested contractors to carry out construction work.

It should adopt and observe the key values of fairness, clarity, simplicity, and reinforce the idea that risk should be allocated to the party best placed to manage it.

”Tendering is not just about getting quotes, it's really about handling risk well and making sure projects succeed by choosing suppliers carefully.

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Tendering as Risk Management

Thinking about tendering as a way to manage risk is helpful. This includes:

- Finding possible project risks

- Working out how likely they are and how much impact they could have

- Putting risks with the parties who can best deal with them

- This way of sharing risk helps projects go more smoothly and reduces disagreements during construction.

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Types of Construction Tendering Processes

Choosing the right way to tender is very important. Here are the most common approaches:

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1. Open Tendering

Open tendering allows any contractor to put in a bid, usually after a public announcement.

Pros:

Reaches a wider range of businesses.

Can lead to better prices and new ideas.

Cons:

Might attract contractors who are not suitable.

Can give buyers too many bids to look through.

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2. Selective Tendering

Selective tendering only asks for bids from contractors who have been chosen by the client beforehand.

Pros:

Usually gets better quality bids.

Makes the evaluation process easier to handle.

Cons:

Limits competition to the contractors who were already picked.

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3. Negotiated Tendering

Negotiated tendering involves talking directly with a single contractor, often for very specific projects.

Pros:

Can appoint a contractor more quickly.

Allows the contractor to get involved early and provides more certainty about costs.

Cons:

Might be seen as unfair or limiting choices.

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4. Two-Stage Tendering

This method involves choosing a contractor in two separate steps. First, the contractor starts some initial work, and then they negotiate a final price.

Pros:

Gets the contractor involved early on.

Increases certainty about costs and how easy the project is to build.

Cons:

Can make the initial selection process take longer.

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5. Framework Tendering

Framework agreements set up long-term relationships between clients and several contractors for work that is ongoing or happens regularly.

Pros:

Reduces the time and effort needed for each procurement.

Encourages long-lasting relationships and efficiency.

Cons:

Setting up the initial agreement can take a lot of time.

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A standard tender package typically comprises several key documents that bidders must carefully review and address. The Invitation to Tender (ITT) formally invites contractors to submit a bid and outlines the project requirements and the process for submission.

The Pre-Qualification Questionnaire (PQQ) or Selection Questionnaire (SQ) is used in the initial stages to assess the suitability and eligibility of potential bidders based on various criteria such as financial stability, experience, and compliance.

The specification provides detailed information about the materials, workmanship standards, and performance requirements for the project.

Drawings offer visual representations of the project design and scope.

The pricing schedule details the format in which bidders should present their costs.

Finally, the tender package includes the terms and conditions of the proposed contract.

A thorough understanding of each component within the tender package is not only essential for ensuring compliance with the client's requirements but also for crafting a compelling and robust bid. For more information, take a look at our Subcontractor Procurement Guide.

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Finding Tenders

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Successfully navigating the construction tendering process requires a strategic and methodical approach. The initial step involves identifying and finding relevant tender opportunities within the UK construction sector.

This can be achieved through various channels, including the government's Contracts Finder website (gov.uk), industry-specific online portals, active networking within the industry, monitoring relevant trade publications or construction focused business intelligence for lead generation.

It is crucial for businesses to develop effective strategies for filtering these opportunities to identify those that genuinely align with their capabilities, expertise, and past experience. Adopting a proactive stance in seeking out suitable tenders is fundamental for maintaining a consistent pipeline of work and driving business growth.

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Choosing the Right Tender Method for Your Project

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The best tendering method depends on things like how complex the project is, if it needs specialist skills, and the budget:

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Standard Projects: Consider selective tendering to ensure you get bids from suitable, pre-approved contractors.

Technical/Specialist Projects: Two-stage tendering is often a good idea, as it allows specialists to get involved early.

Maintenance Contracts: Framework agreements can make ongoing maintenance work more efficient.

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Common Construction Procurement Routes

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Construction procurement methods generally fall into four main categories:

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Traditional (Design-Bid-Build)

The client hires a designer and a contractor separately, awarding a contract after the designs are finished.

Advantage: Clear roles, predictable costs.

Best for: Simple, low-risk projects.

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Design and Build

One contractor handles both the design and the construction.

Advantage: Single point of contact, easier communication.

Best for: Projects where simplicity and speed are important.

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Management Contracting

A management contractor coordinates the construction work on behalf of the client, usually for a fee.

Advantage: Flexibility and a quicker start to the project.

Best for: Complex projects where a fast delivery is needed.

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Contractor-Led Contracts

Contractors take the lead in the design and suggest solutions at the tendering stage.

Advantage: Potential cost savings through combined design and construction.

Best for: Innovative projects or specialist design-build schemes.

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Stages of the Construction Tendering Process

The typical construction tendering process includes:

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1. Pre-Tender Stage

Clients define what the project involves, the budget, the timeline, and other specific details.

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2. Tender Advertisement

Projects are advertised through online portals (like FTS and Supply2Gov), industry magazines, and social media. The documents provided usually include design specifications, how bids will be evaluated, pricing forms, and contract terms.

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3. Tender Submission & Closing

Contractors submit their complete bids before a set deadline (PPQs).

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4. Tender Evaluation

Bids are reviewed fairly and scored based on pre-set criteria such as price, experience, quality, and timelines. In the realm of public sector procurement, the evaluation is increasingly guided by the principle of the "most advantageous tender" (MAT), which, as outlined in the Procurement Act 2023, emphasises overall value rather than solely focusing on the lowest price.

This means that factors such as quality, social value, and sustainability play a more significant role in the decision-making process.

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5. Tender Award

The chosen contractor is selected and informed. The contract starts once they accept.

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Tips for Successful Tendering in Construction

To increase your chances of success, follow these practical tips:

- Review Tender Documentation Thoroughly: Make sure you understand all the requirements, risks, and opportunities before you bid. A frequent mistake is misinterpreting the tender requirements and specifications, leading to bids that do not fully address the client's needs.

- Complete PQQs with Accuracy: Clearly show that you meet the necessary standards (i.e. accreditations, insurances, experience etc) and have the right capabilities. Bids must have clarity, completeness and presented clearly.

- Visit Project Sites: If possible, visit the site to ensure your pricing is accurate and to show you really understand the project.

- Inadequate Opportunity Risk Assessment: That failing to conduct a proper risk assessment can lead to underpriced bids or an inability to fulfill contractual obligations. Your current list doesn't directly address this crucial step of evaluating risks and opportunities before bidding.

- Seeking Clarification on Ambiguities: Most tenders give an opportunity to ask any question, it is important to use this time to seek clarification on unclear aspects of the tender documents can lead to incorrect assumptions and a less competitive bid

- Highlight Track Record: Provide relevant examples of past work, references, and feedback from previous clients.

- Demonstrate Capability and Value: Clearly show how you deliver projects on time, within budget, and to a high standard.

- Include Social Value: Show how your business has a positive impact on local communities and the environment. This is very important in the Modern Construction World. ignoring it can negatively impact the bid evaluation, particularly in the public sector.

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Which Tendering Process is Best for You?

There's no single answer that fits every situation. Each project is different and needs a tendering method that is tailored to it. By selecting the most suitable approach, construction businesses can handle risks effectively, control costs better, and improve their chances of winning profitable contracts. As growing business, speaking to the decision makers of different construction companies can help you scale, our Business Intelligence Team can support you and/or your sales/BDM manager in this journey.

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Procurement Act 2023

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The Procurement Act 2023, which came into effect on February 24, 2025, represents a significant overhaul of the UK's public procurement regulations and has notable implications for construction tendering. The Act aims to create a simpler, more flexible, and transparent procurement system, with a greater emphasis on delivering value for money, maximising public benefit, and promoting economic growth.

Key Changes from Procurement Act 2023

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Shift to "Most Advantageous Tender" (MAT)

Requires businesses to focus on demonstrating overall value, including quality, social impact, and sustainability, not just price.

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Increased Emphasis on Social Value

Businesses need to actively incorporate and evidence social value commitments within their tender submissions, particularly for public sector contracts.

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Greater Focus on SME Engagement

‍Encourages main contractors and public sector bodies to engage with SMEs, potentially creating more opportunities for smaller construction businesses.

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New Central Digital Platform

Businesses must register and utilise the enhanced Find a Tender service to access and bid for public sector contracts above a certain threshold.

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Mandatory 30-Day Payment Terms

Improves cash flow for contractors and subcontractors working on public sector projects, provided invoices are valid and undisputed.

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Enhanced Performance Monitoring

Contracts exceeding £5 million will require at least three key performance indicators (KPIs) to be monitored and reported, increasing accountability.

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Introduction of Debarment List

Businesses with a history of poor performance or misconduct may be excluded from bidding for public sector contracts.

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To adapt to this new regulatory landscape, construction businesses should proactively familiarise themselves with the full details of the Procurement Act 2023 and the associated guidance. Updating internal processes to align with the Act's requirements, particularly regarding the evaluation criteria, social value, and payment terms, will be essential. Businesses should also focus on clearly demonstrating their social value and sustainability credentials within their bids. Registering on and effectively utilising the Central Digital Platform is crucial for accessing public sector opportunities. By taking these steps, construction businesses can navigate the new regulatory environment and position themselves for continued success in bidding for public sector contracts.

Conclusion

Tendering in construction is very competitive and can be complicated, but understanding and choosing the right procurement method can greatly improve your success. Construction business owners who actively manage risks, clearly explain their value, and match their tendering strategy to what clients expect are much more likely to win profitable projects.

For expert advice and practical help to improve your tendering success, contact Saint Global - we specialise in helping construction businesses grow by securing better tenders.

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FAQ 1: What exactly is construction tendering?

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‍Answer: Construction tendering is the process where clients invite bids from contractors to carry out specific construction work or services. It's not just about getting the lowest price; it involves managing risk effectively and carefully selecting suppliers to ensure project success, emphasising fairness, clarity, and simplicity.

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FAQ 2: What are the main types of construction tendering processes used in the UK?

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‍Answer: The most common types of construction tendering processes include: Open Tendering (where any contractor can bid), Selective Tendering (bids are invited from pre-chosen contractors), Negotiated Tendering (direct talks with a single contractor), Two-Stage Tendering (contractor selection in two phases), and Framework Tendering (long-term agreements with several contractors for ongoing work).

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FAQ 3: What are some key documents typically included in a standard construction tender package?

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‍Answer: A standard tender package usually includes: the Invitation to Tender (ITT), the Pre-Qualification Questionnaire (PQQ) or Selection Questionnaire (SQ), the specification detailing project requirements, drawings, the pricing schedule, and the terms and conditions of the proposed contract.

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FAQ 4: What is the "Most Advantageous Tender" (MAT) as outlined in the Procurement Act 2023, and how does it affect tender evaluations?

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‍Answer: The Procurement Act 2023 shifts the focus from the "most economically advantageous tender" (MEAT) to the "most advantageous tender" (MAT). This means that when evaluating bids, public sector bodies will consider a broader range of factors beyond just price and quality, giving more weight to overall value, including social value and sustainability.

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FAQ 5: What are some practical tips for construction businesses to improve their chances of successful tendering in the UK?

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‍Answer: To increase your chances of success, it's crucial to: thoroughly review all tender documentation, complete PQQs accurately, visit project sites if possible, highlight your track record with relevant examples, clearly demonstrate your capability and value, include social value considerations in your bid, seek clarification on any ambiguities in the tender documents, and conduct a thorough opportunity and risk assessment.

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