Winning Construction Tenders

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WINNING Construction Tenders

Winning Construction Tenders – A Proactive Approach

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For construction companies, big or small those who seek work through Tender invest a lot of time and money in the Tendering process. Unfortunately, many end up in disappointment because at the end there is only one winner or at most a JV if that’s how they would have submitted the bid. For those who win, the picture is not always rosy because projects often run out of time & cost and other shortcomings. Sometimes, parties end up facing Liquidated Damages and some even termination. But we all need to survive and that’s the way it has been since ages so should we surrender ourselves to the traditional way or should we take a much better proactive approach- this post is all about this.

If you are investing considerable amount of resources and time on Tender for a Project, consider it as a Project in itself because it has a clear goal, roles, resources, risks etc. If you disregard this fact, you are most likely to remain dis-organised and stacking the odds against you to achieve your objective through Tender.

But where should it all start ?

Should the Tendering start from collecting the bid documents and assigning it to your team and chasing them day in day out for submission on deadline, that’s one of the approaches but not necessarily a winning approach.

One of the primary reasons we fail is because we don’t know what our existing capacity is and how much of this is currently engaged somewhere and how much is available to use freely. Having too much money does not give a reason that we will necessarily succeed by hiring resources as & when needed rather doing periodic SWOT analysis gives a better idea of our real capacity picture. Many large companies still fail to win the Tender because somebody else has quoted a cheaper and better price perhaps they analysed themselves and the market better than them.

Once you have done the SWOT analysis of where you are with your current situation as a constuction company, it gives a much clearer idea of what you should Tender on and what should you not. This is a Golden Rule to avoid catastrophic dangers such as project failure or company collapse.

Below is a flow chart which shows a somewhat proactive approach towards the Tendering process :

Once we are done with steps 1 & 2, the next very important step is Competitor Analysis – who else is bidding on the project and what’s their capacity? We don’t necessarily have to leave spies in the market to do that. A closer look at some of the projects done by your competitors can give an idea. If you have more information such as their JV capacities, spare resources and where else their resources are engaged on can give a more clear idea. ” A true lover is the one who knows every second of his love” – keep this in mind and take the next step forward.

Tender as a Project

Tenders generally have the following challenges associated with them which make them “Special Project of Unique Kind” in themselves :

(1) Not enough information about Time & Cost

(2) Quite often not enough information about productivity and lead times

(3) Tight deadlines

(4) Zoomed In or Zoomed out view of Profitability i.e. unrealistic expectation

(5) Not enough idea about applicable legislations, latent risks, environmental issues, possible public or political interventions not being factored in.

(6) Lack of collaboration from intended stakeholders such as quotations not coming in on time or wide off the mark to enable us to quote

There could be many more but I have found these of particular interest from my experience. If you are a new contractor , you are most likely to be in the worst situation because of the learning curve. But if you are an experienced contractor , you can control many of the above by building databases such as “Lessons Learnt”.

Lessons Learnt

This is a very important part of any project including Tender doesn’t matter we succeded or not. Admitting mistakes and learning from them is the sign of brevity and prudence if we want to survive. Those who don’t are the ones who lose out more and more. If you have done 10 projects in the past and honestly conducted Lessons Learnt exercise, consider it as a golden investment for the future of your construction company because now you know the consequences of committing those mistakes and the rewards of taking professional approach. You should regard yourself as brilliant if you have built databases of productivity, lead times and issue registers because you are going to excel in your niche with confidence. These are very important tools for making a successful Tender Program without which you will be walking in the dark. As we say,

“Planning is a Map into the Future”

Below is a short company presentation of what I do and how can I help you achieve your goals, please contact me should you need focus and help :

To your success,

Madhu Barai




This post was first published on LinkedIn on 21Apr15 and will be subsequently publshed elsewhere.

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