Cost estimating: tendering

Return and opening

It is usual practice for only the form of tender to be returned (although occasionally, fully priced bills of quantities (BQs) or alternatively, contract sum analyses or schedules will also be requested). This is because preparing fully priced bills of quantities will cost the tenderer substantially and usually only 1 or 2 tenders will be of interest to the employer. It is therefore both best practice and reasonable not to request full bills of quantities, schedules, and so on. The programme should be agreed to facilitate and acknowledge that fully priced and monied-out bills of quantities and so on will only be requested from tenderers of interest to the employer.

Tenders should be returned to an agreed location or office in the unmarked tender return envelopes included in the tender documentation. A meeting to open tenders should be agreed and attended by the architect, employer and surveyor.

Upon receiving tenders, the amounts, together with brief comments (such as qualifications, the programme, the priced bills of quantities if received) should be recorded on a standard tender return form. Each person present should sign the form to record that they were present and that it is a true and accurate record of the tender opening.

A sample tender receipt and opening form is included in the related forms section.

Examination

If a priced bill of quantities or schedule has not been submitted with the tender, the first thing to do is to request this from the lowest tenderer. When 2 or more tenders are very close in cost terms, it is often worthwhile requesting a fully priced BQ from 2 tenderers, confirming to each that their tender is of interest to the employer.

Upon receipt of the priced bill of quantities, the surveyor will need to arrange for all arithmetical calculations in the bill of quantities to be checked for any errors. Any errors should be noted and adjusted in accordance with the appropriate JCT documentation (Practice Note 2012). If it is necessary to correct the tender, the tenderer has 2 options, both dealt with by the JCT documentation:

• alternative 1 - stand by his or her tender, adjusting the error within the overall figure;
• alternative 2 - amend his or her tender, so that the error increases or decreases the tender.

The alternative that applies to a particular project is usually stated on the form of tender or within the bill of quantities.

Qualifications and clarifications

Tender returns may contain a number of comments or technical qualifications. This is especially true for contractor-designed proposals or Design and Build Contracts, which may include proposals for alternative materials. The surveyor will need to seek clarification and recommendation from the relevant consultant on these matters, for inclusion in the tender report. The surveyor should assess the financial implications of each and every proposal.

In order for the employer to make a decision as to which contractor to appoint, it is normal practice for the surveyor to issue a tender report.

Tender report

The tender report should be in the form of a checklist. If a project is complex, it is best practice to issue this as a stand-alone report, rather than trying to cover all aspects in a long letter.

The tender report will cover:

• the tenders received;
• a detailed analysis of the tender (for either one or two tenders);
• a comparison with the estimate; and
• recommendations.

It is essential that the report concludes with a recommendation advising the employer of the next step in procuring the project and the appointment of the contractor.

It is also worth noting the period for which tenders remain open for acceptance.

Unsuccessful tenderers

Unsuccessful tenderers should be informed by the surveyor as soon as is practical, in accordance with the JCT guidance.