Evaluating a Tender Opportunity: Key Questions to Ask Yourself
So you’ve been asked to tender on a project. Now what? What are your chances? What questions should you ask yourself? How do you evaluate whether you should bother? Here are key questions you should ask yourself:
1. Who is the client, architect, and project manager?
Where did this request to tender come from, and how did they find out about you? By far the most important thing is to understand who you are dealing with. Are they reliable trustworthy and reputable people? If they found you online, are they really ready to accept your tender and sign a contract with you? A carefully considered tender list normally involves careful vetting of the potential tenderers. But just like you should never judge a book by its cover; be aware that something that might feel like an aggressive and awkward tender package initially turn into something positive once the client and their team get to know you and trust you. Sometimes it’s the smooth talkers you need to worry about.
2. Is this a legitimate tender and will the project go ahead?
If you’ve had some experience tendering, you know that when you get a call out of the blue and next thing you know a link to a tender package has arrived via email, it doesn’t seem like a legitimate tender opportunity. Often, it feels like they have failed to attract enough tenderers, so they googled some more companies that may tender. Be cautious of these situations. Additionally, look out for speculative tenders where someone is trying to get price feedback to see whether the project should go ahead. You can often tell this by the minimal engagement, sparse documentation, and sometimes the lack of terms of tendering. Either avoid these or proceed with caution, understanding the risks.
3. Do we have the capacity to take this on with insurance, staffing, and management?
If you win the project, can you even complete the work? Assess your current capacity, including insurance, staffing, and management resources, to ensure you can deliver the project successfully. Strategically is this the right project for you to try to win. If you have a business strategy how does this project fit into it?
4. Are the client's budget expectations realistic?
What is the project budget? If they don’t disclose anything, how do you know that the budget is not half of what the price might be, making the project non-viable? Ensure the client's budget expectations are realistic and aligned with the project's scope.
5. Are the documents any good?
The quality of the tender documents can indicate how tricky and time-consuming the tender process will be. High-quality documents often reflect a well-organized project team and a legitimate tender opportunity. Poor documentation may suggest the opposite.
6. Are the terms fair? Am I dealing with Fair minded people?
If the tender requirements, the information requested at the tender stage, or the proposed contract seem unreasonable, it might be best to avoid this tender. From your interactions, assess whether the people you are dealing with seem fair-minded and reasonable. If you already feel squeezed by the conditions and contract terms they have included in the tender docs this is unlikely to get any better.
7. How many tenderers are there?
If there are a lot of tenderers, your chances are limited. If the builders you are tendering against are not as established, new to the industry, or not reputable, then you may not want to bother because they will tend to be cheaper and their submissions less reliable. Understand the competition and your chances of success before committing.
8. What is your track record in tenders?
Have you been successful in tendering in the past? What is your expertise in tender strategy and experience in pulling a tender together? If the answer is none but you want to build up your tender muscles, then it's okay; you will get better by doing. If it’s a one-off, you may not wish to bother.
9. Does this project sit comfortably in your wheelhouse?
How many projects like this have you done in the past? You can always go for other projects, but you need to factor in additional teething and risk in doing something outside of your core expertise. Acknowledge that any leap into the unknown may result in a steep learning curve or necessity to hire more experienced project team members.
10. How much will it cost to tender?
Think about the real cost, not just the monetary cost to tender. Consider the value of your time, the goodwill of your subcontractors, and the potential distractions from other opportunities. Evaluate if the resources could be better spent elsewhere, like on marketing or improving your existing services.
11 questions to ask the client who has asked you to tender on their construction project? I guess some of these may already be answered in the tender documentation so you should check that first.
What is the purpose of this project? Why are you doing this?
What are the objectives of this project?
What’s most important to you; time, quality or cost?
What is the assessment process for tenders?
What is your experience with construction projects, have you had a project built in the past? What was that experience like?
If you have built before which builder did you work with and why would you not work with them again?
What is your budget for the project?
How have you budgeted to date? Who has advised you on budget?
Who else will be tendering on the project?
How will the contract and the project be administered?
Do you have any deadlines in mind for either commencement or completion?
Evaluation Tool
Here is a list of questions that will help you make a detailed assessment. Pick 20 that are the most important to you and put a response from 0-5 for each - 5 being most positive, zero being negative if the answer is ‘We don’t know’ then put a zero.
Then add the score out of 100
Client/Existing Team Fit:
Do you know the client and have they been referred to you by a trusted third party?
Previous Experience: Have you had successful previous experiences with this client, architect or project manager?
Communication and Responsiveness: Is the client communicative and responsive?
Financial Stability: Is the client financially stable and reliable?
Have you met the client in person?
How well do you know the architect or project manager?
Have you tendered for the architect or project manager before?If you have tendered for the Architect or PM in the past and was the tender project transparent?If you have tendered for the Architect or PM in the past and was the tender project transparent?
Project Fit:
8. Clarity of Project Scope: Are the project scope and objectives clearly defined?
9. Detailed Documentation: Are the project documents detailed and comprehensive?
10. Realistic Timeframe: Is the project timeline realistic and achievable?
11. Budget Adequacy: Is the budget adequate for the project requirements?
12. Subcontractor Availability: Are qualified subcontractors available for the project?
13. Technical Complexity: Is the project's technical complexity within your capabilities?
14. Is the amount of information expected from you reasonable?
Business Fit:
15. Payment Terms: Are the payment terms favourable and clearly defined?
16. Tender Documentation Clarity: Is the tender documentation clear and easy to understand?
17. Submission Guidelines: Are the submission guidelines straightforward and reasonable?
18. Pre-Tender Support: Is adequate support provided during the pre-tender phase?
19. Bid Preparation Time: Is there sufficient time to prepare a competitive bid?
20. Past Project Performance: Is there a track record of similar successful projects by the client?
21. Did it seem that it was too easy to get on the tender list, giving you the sense that you are either making up the numbers, or there to get a check price from rather than a serious contender?
Strategic Fit:
22. Alignment with Business Goals: Does the project align with your company’s strategic goals?
23. Long-Term Benefit: Will the project provide long-term benefits or opportunities?
24. Technical Capability: Do you have the technical capability to meet the project requirements?
25. Resource Availability: Are necessary resources (personnel, equipment, etc.) available?
26. Innovation Potential: Does the project offer opportunities for innovation?
27. Market Conditions: Are current market conditions favourable for this type of project?
Operational Fit:
28. Operational Capacity: Do you have the operational capacity to undertake this project?
29. Project Management: Do you have experienced project management in place for this type of project?
Legal and Contract Admin Fit:
30. Contract Terms: Are the contract terms reasonable and manageable?
31. Is it a commonly used form of contract?
32. Dispute Resolution: Is there a clear and fair dispute resolution process outlined?
33. Do you have contractual admin expertise and capacity to manage this project?
Quality of Tender Process:
34. How much work has gone into the tender doc preparation?
35.How much effort has the client or their team put into procuring a quality list of tenderers?
36. Budget Disclosure: Is the budget disclosed?
37. Bill of Quantities: Is a bill of quantities provided?
38. Number of Tenderers: Do you know how many tenderers are involved?
39. Evaluation Criteria: Are the evaluation criteria transparent and predefined?
40. Bid Opening Process: Is the bid opening process transparent and documented?
41. Feedback Mechanism: Is there a clear mechanism for providing feedback to unsuccessful bidders?
42. Conflict of Interest: Are there measures in place to prevent conflicts of interest in the tender process?
43. Consistency in Information: Is consistent information provided to all bidders, ensuring no party has an unfair advantage?
44. Are the documents clear and complete?
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