What’s A Construction Tender?

What's a construction tender?

Some professionals in the construction industry may want you to assume that the terms Tender, Bid and Quotation are the same, but each term stands for a specific part in pricing construction services.

Every profession has its own set of words that are used to describe aspects of the industry and the construction industry is no different.

A tender is a set of construction documents that are put together by the owner, or the contractor; the tender package is used to invite interested parties publicly or privately to the project. The documents that you submit to the owner or contractor are known as bid documents.

The bid documents may or may not be a price. The tender package may include some criteria that you have to follow when submitting your bid for the project. Your bid must follow the directions outlined in the tender.

Now, a quotation is a price that you submit to customers who are interested in using your services. A quotation may or may not be a part of a formal invitation to a project but a quotation is usually between a service provider and a potential customer.

Having a simple understanding of the terms will help you to get a better understanding of how pricing works in the Architectural, Engineering and Construction (AEC) sector.  Before we start to explain the differences you should have an understanding of how the AEC process works.

Construction Tender
The Tender Documents are part of a formal invitation to solicit responses from interested parties, to undertake work on a project. No matter where you are in the world you are, there is someone out there looking for some type of property to develop and use. If this person represents a company and decides to it for business purposes, then there would be some steps to follow before she starts building.

To get this property developed and ready for the business she would have to go through a process of designing and getting final approvals for working drawings. Another part of the designing process would be developing the specifications for the project.

The drawings, specifications, scope of work and contract terms are combined together to create the project or tender documents.

Pricing a construction project is the process of preparing and forwarding the tender documents to interested parties through a Request For Proposal (RFP), which allows the interested parties a chance to perform their services on the construction project.

The cost estimation process will start by reviewing the documents and deciding if this project is feasible and within your working capacity.  After the estimator reviews the blueprints, she would start to gather quantities to do a Quantity Take-Off.

Every estimator should have its own process set-up for responding to RFP’s.
Tenders may be referred to as different names. The different terms may reflect a certain stage in the project.  Here are some terms that you may hear that mean the same thing as Tenders and proposals.

1. Request For Information
2. Request For Proposal
3. Request For Quotation
4. Request For Bid

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