Building in Ireland

To Tender or Not to Tender…

To tender or not to tender”, is a question I have often come across in my career in the building industry.

In Ireland it is common for projects to be tendered to 3 or more trusted and vetted construction companies, in order to achieve a fair and competitive price.

This all seems fine, until you delve into the details of what can go wrong in the process and what the advantages are of not tendering, and negotiating a fair price for your project.

In my experience, when a project is ready to go to tender, the costs have already been estimated and the client is eager to proceed.

If you go down the route of seeking 3+ tenders, you must firstly identify a sufficient number of suitably qualified contractors that are willing e to carry out the work. Secondly you must find contractors that are available to do the work. Finally you must ensure that the tender package including drawings, specifications and bills of quantities is sufficiently progressed to allow the contractors to deliver a complete price for the project.

On receipt of your tenders, you are professionally bound to start contract discussions with the lowest tender (not always the most capable contractor).

If you decide not to tender, and to negotiate your project, you only need to identify the most capable contractor and ensure that they will be available to carry out the project when you require them.

When you are satisfied with the contractor, you can begin the process of negotiating the price. At this stage, you have saved on time and expense of preparing and sending out your tender package to all contractors, and can engage the expertise of the contractor pre-contract and ensure that your team has not overlooked anything and to clarify any areas that might otherwise be resolved post contract (at your expense).

In my experience, the appointment of a high quality contractor to complete your project far outweighs the benefits of getting the project completed at a lower price, by a contractor who has been squeezed a tender stage, and has not had the opportunity to get involved in the process before signing the contract. My advice is to wait for the most capable contractor to be available, negotiate in an open and transparent manner with them and to choose quality over price and programme.

A project will be recognised for its quality, but rarely for how cheaply or quickly it was built.

“The bitterness of poor quality will remain long after the sweetness of low price is forgotten”

Benjamin Franklin