Why selective tendering in construction can save you time and money.

Being able to bid on construction projects swiftly and well might make the difference between generating money and losing money. Because of this, it’s quite vital for both project owners and managers to know how to buy items the appropriate way. Many construction professionals now like selective tendering because it helps them identify suitable contractors and saves them time and money.

Open tendering lets a lot of individuals bid, but selective tendering only lets contractors that have already been approved bid. This way of getting construction bids has both good and bad points. It makes the evaluation process easier and typically leads to stronger submissions, which is a good thing. It might also make competitiveness harder and require more planning ahead of time. But if done effectively, selective tendering can save you time and money when you buy products and finish tasks.

What is selective tendering in construction, and how is it different from an open tender?

Selective tendering is a means to buy things or get things done. Only vendors that have already been approved are asked to bid on a construction project. This is a totally different choice from open tendering, which permits any contractor who wants to bid on the project.

Contractors can’t show interest in a selective tendering procedure; instead, they get a formal invitation. Then, the project team will compile a list of the best contractors based on certain criteria for their project, such as:

• How well they did on comparable projects in the past
• Stability in finances
• Knowledge of technology
• Records of safety
• Specialist skills

This strategy works best for: 

• Contracts that are specialised or sophisticated and need a lot of information
• Projects that need teams with a lot of experience and have short deadlines
• Situations where just a few contractors have the right skills

The name “limited bidding” comes from the fact that it is also called that. 

“Restricted tendering” is another word for selective tendering that appropriately reflects what it is. Making it apparent that only a small number of people can join on purpose and that only persons who were chosen by the project team can access it.

The term “restricted procedure” is also used in various fields, especially the public sector, to designate a comparable two-step process. The first step is to look at the bidders’ talents, expertise, and ability to make a short list. After that, only the people on this list will get an invitation to bid.

The limited vocabulary also brings up an important facet of this method: the control aspect. When project owners limit who can participate, they have better control over the quality of submissions and the suitability of possible contractors.

Both terms, “selective” and “restricted,” suggest the same thing: this is not an open process; it is a carefully curated one that weeds out candidates who are not a good fit before they invest time crafting bids.

This strategy works for everyone. This means that project owners have to look at fewer bids that are superior. This means that contractors will have to compete with fewer people and know that they have already passed the initial certification test. Because of this, contractors sometimes spend more time and money creating thorough proposals when they are picked for restricted bids. This is because they know they have a better chance of winning than in open competitions.

How the process of selected tendering works

The selective tendering process has a set order that makes sure that only qualified contractors are asked to bid on construction projects. Both clients and contractors need to know these procedures in order to successfully follow this procurement path.

Making a list of the best suppliers

Once you have a list of qualified contractors who have shown they can manage projects of the same size and difficulty. Project teams generally start thinking about possible contractors early on in the project, using:

• Past work with contractors
• Recommendations from trade groups and the industry
• Framework vendors with a history of success
• Meetings and presentations by contractors

Once a long list is made, the formal pre-qualification procedure begins. This usually includes questionnaires or interviews that look at:

• Stability of finances and health of the business
• Experience and technical knowledge that are useful
• Records of health and safety
• Insurance coverage
• Operational capability for the project’s time frame

The goal is to narrow down the initial pool to a manageable list of contractors, usually between three and six. This comprehensive screening makes sure that all contractors who are allowed to bid have the basic skills needed, which saves time by not having to look at offers that are plainly not fit.

Invitation to bid

After the shortlist is finished, the client sends out a formal Invitation to Tender (ITT). This comprises a well-organised ITT with clear instructions for bidders on how to submit their bids and when they are due. With a pricing document, it shows the project’s scope through drawings, requirements, and limits. There will also be an evaluation matrix that shows how much weight each quality and price component should have.

Choosing and evaluating

Once the responses are in, the review procedure follows rules that were set before the tender was sent out. A normal evaluation has:

The first screening makes sure that all the necessary papers have been filed and signed correctly. The main assessment then looks at each tender based on weighted factors such technical compliance, experience, financial stability, delivery schedules, and quality assurance procedures.

Most clients utilise a grading system to compare answers to their own needs or standards. This makes it easier to compare bids side by side and see their strengths and drawbacks.

After scoring, clients can talk to the top bidders about the program details, the methods they used, and how they plan to handle risks.Finally, they choose the winning contractor and start getting ready for the contract and moving in.

Single-stage and two-stage bidding

Selective tendering can be done in one or two stages, depending on what the project needs.

In single-stage tendering, contractors send in entire proposals that include all the prices and technical information at once. The client looks at these precise proposals and chooses the contractor they like most. This old-fashioned way works best when all the design information is there and the needs are clear.

Two-stage tendering, on the other hand, is becoming more prevalent for intricate projects that need contractors to become involved early on. The first step is for contractors to compete on their initial costs, overhead percentages, and how they plan to complete the work, not on a set price. After that, the client chooses the contractor they like best based on these things.

Stage two: The contractor makes specific plans with the design team, works with the supply chain, and finally agrees on a price for all of the work.

One of the best things about two-stage tendering is that it lets you gain technical advice from the contractor early on, work together to address difficulties, and get more accurate estimates based on well-thought-out designs. The second stage needs to be managed carefully, though, to make sure the shift to a fixed-price contract happens well.

You should choose amongst these strategies based on how hard the project is, how long it will take, and how useful it is to have contractors with experience early on to help improve the design solution.

How selective tendering saves time

One of the best things about selective tendering in the construction sector is that it saves time. These are:

• Fewer proposals to look at
• The selected approach makes it much easier to evaluate because it cuts down on the quantity of entries. You could get dozens of proposals when you perform open tendering. With selective tendering, though, you just look at three to six bids. This smaller number of bids has direct real-world benefits:

The teams who evaluate can take extra time to look over each submission attentively.

It’s easier to compare bids when there aren’t as many things to think about.

During the evaluation stage, resources can be utilised more efficiently.

The selective nature is supposed to make it easier and faster to choose. Also, teams don’t have to waste time reviewing through bids that are clearly wrong or don’t match the requirements because they only have a small number of good proposals to choose from.

Pre-qualified vendors save down on paperwork.

The greatest strategy to save time might be to move qualification checks to the beginning of the process instead of doing them during full tender evaluation. This strategy saves time and money by not letting bidders who aren’t right for the task bid on complete tenders.

In practice, pre-qualification makes it less likely that you’ll have to undertake the same administrative chores again and over again. Once contractors have proved that they are qualified through the pre-qualification process, the attention moves totally to their specific proposal instead of re-evaluating their basic competencies. This saves both clients and suppliers a lot of time and work.

Standardised pre-qualification methods have made things even more efficient. The Common Assessment Standard is an example of an all-in-one assessment tool that can be used on a lot of different projects and with a lot of different clients.

A quicker way to make decisions –

Selective tendering speeds up decision-making since it is focused. Clients know for sure that contractors are qualified at the invitation stage because the screening process happens before the tender invitation instead of after submission. This indicates that qualifying checks are done first:

In general, the whole review process goes more faster and is less work for the people in charge. Also, since all bidders have already passed the minimum standards, comparing offers can focus on project-specific aspects like methodology, cost, and program details.

This sped-up timetable is very useful for projects that need to be done quickly. Pre-qualification can make the tender process go much faster because contractors have already been pre-qualified and can swiftly go on to the next stage of bidding. This more streamlined method cuts down on delays and speeds up the progress of projects.

In the end, spending time up front to choose a contractor makes the whole procurement process more efficient down the line. This method not only saves time during appraisal, but it also often leads to speedier project mobilisation once a contractor is hired, as evidenced by industry practice.

How selective bidding helps you save money

Selective tendering is a great solution for building procurement since it saves time and money. If done right, this strategy can save a lot of money throughout the course of the project.

Less chance of getting bad bids

Selective tendering is mainly a way to protect your money by keeping contractors who don’t have the right skills from submitting full bids. The pre-qualification process makes sure that only contractors who have the right financial stability, technical skills, and proven track records can take part.This targeted strategy greatly lowers the chance of picking the wrong supplier, who could provide bad work or run into money problems during the project.

It’s important to note that these pre-qualified contractors have usually shown that they can do certain types of work to a high grade. By using a list of reputable contractors, project owners lower the risks of the project and move more quickly to the next stage of development.In fact, a lot of project owners think that working with trusted partners is better than having less competitors.

Fewer delays and rework on projects

Selective tendering also helps keep project delays and rework from costing more than they should. By hiring contractors who have a track record of success in the fields that are relevant to your project, you may greatly reduce the chances of making mistakes that need to be fixed. This method usually lets projects start sooner and have fewer delays throughout construction, which is what we want.

When to use selective bidding

• Specialised contractors for jobs that are hard or risky.
• The old way of competitive tendering doesn’t work because it’s too hard.
• The contract contains particular services or equipment that can only be used for that purpose.

In these situations, only letting trained professionals take part saves time that would have been spent looking over offers from companies that don’t have the required expertise.

Projects with tight deadlines

For projects with tight schedules, selective tendering has some evident benefits. This method is always faster than open tendering because it doesn’t require the pre-qualification stage.

So, it’s easy to follow the complete procurement timeline:

It normally only takes one to two weeks to prequalify and produce a list of the best candidates.

For small and medium-sized projects, the time it takes to get a bid can be cut down to 2 to 4 weeks.

• It only takes a week or two to win an award and get things going. 
• When time is short, selective tendering makes it easier to discover good contractors quickly.
• When the quality of the provider is very important
• Selective tendering is very helpful for projects when safety, quality, and capacity are the most critical elements. Clients feel more certain that their demands will be satisfied with this strategy.

This strategy does make it harder for some businesses to compete, but the focus on contractor quality usually makes up for this. Selective tendering helps you create long-term partnerships with trustworthy suppliers and makes sure that standards are kept high.

This strategy works best when clients can locate the correct contractors ahead of time and wish to have greater say over quality and capacity.

Lastly, selective tendering is a great way to get things done when building projects need to find a compromise between speed and quality control. It’s clear that selective tendering needs more planning ahead of time than open approaches. But this initial expenditure pays off in the long run by making the procurement process easier and the project results better. Contact us to discuss how our team can help you write your next tender, review or evaluate your existing tender.