What is Tendering?

What Is Tendering?

Tendering is the formal process through which a client invites contractors to submit competitive offers — tenders — to carry out construction work. It is the mechanism by which projects move from design and cost planning into delivery, and it is one of the most consequential stages in any construction project. The tendering process determines which contractor will build the project, at what price, on what terms, and under what risk allocation. Get it right, and the project has a strong commercial foundation. Get it wrong, and the consequences — cost overruns, disputes, contractor insolvency, poor quality — can be severe.

For quantity surveyors, tendering sits at the heart of professional practice. On the consultant side, the QS advises the client on procurement strategy, prepares tender documentation, manages the tender process, evaluates submissions, and recommends appointment. On the contractor side, the QS is responsible for pricing the tender, assessing risk, building the commercial offer, and presenting a submission that is both competitive and commercially viable.

This article covers the full tendering landscape in UK construction: the main tendering methods, the documentation involved, the evaluation process, public sector procurement requirements under the Procurement Act 2023, and the practical considerations that determine whether a tender succeeds or fails.

Why Tendering Matters

Tendering is not simply about getting the lowest price. A well-managed tender process achieves three things: it tests the market to establish a fair price for the work, it identifies a contractor with the right capability, capacity, and financial standing to deliver the project, and it creates a clear contractual basis from which the project can be managed.

The temptation to focus solely on price is understandable — particularly when budgets are tight — but the construction industry has learned hard lessons about the consequences of awarding contracts to the cheapest bidder without adequate scrutiny. A contractor who wins a project at an unrealistically low price will almost certainly look to recover margin through aggressive claims management, reduced quality, or reduced resources on site. The resulting disputes, delays, and defects typically cost the client far more than the saving achieved at tender stage.

This is why modern tendering practice increasingly emphasises quality alongside price. Most public sector tenders now evaluate submissions on a combined price-quality basis, and private sector clients are following the same trend. The QS plays a central role in designing evaluation criteria that balance value for money with the need for a capable, financially stable contractor.

Tendering Methods

There are several established methods of tendering in construction, each suited to different project types, client requirements, and market conditions.

Open Tendering

Open tendering allows any contractor to submit a tender in response to a published advertisement. There is no pre-qualification stage — the opportunity is open to the market, and any contractor that meets the basic requirements can bid.

The main advantage of open tendering is transparency. It provides the widest possible competition and is difficult to challenge on grounds of favouritism or bias. For this reason, open tendering has historically been the default approach in public sector procurement, where accountability for the use of public funds is paramount.

The disadvantages are practical. An open tender for a £20M school project might attract 15 to 25 submissions. Evaluating that many tenders is time-consuming, expensive, and burdensome for both the client team and the tenderers. Many of the submissions will come from contractors who lack the relevant experience, financial standing, or capacity to deliver the project — meaning the evaluation team spends significant effort reviewing bids that were never realistic contenders. Open tendering also places a heavy burden on the market: contractors invest considerable resources in preparing tenders, and a process with 20 bidders means that 19 of them are investing time and money for no return.

Selective Tendering (Restricted Procedure)

Selective tendering addresses the inefficiencies of open tendering by restricting competition to a shortlist of pre-qualified contractors. The process typically involves two stages: a pre-qualification questionnaire (PQQ) or selection questionnaire (SQ) to identify capable contractors, followed by an invitation to tender (ITT) issued to a shortlist of typically four to six firms.

The pre-qualification stage assesses contractors against criteria such as relevant experience on similar projects, financial standing and annual turnover, health and safety record, quality management systems, insurance cover, and references from previous clients. Only contractors that pass the pre-qualification threshold are invited to tender, ensuring that the shortlist comprises firms with a realistic prospect of delivering the project.

Selective tendering is the most commonly used method for medium to large construction projects in both the public and private sectors. It balances competition with efficiency: the client receives a manageable number of tenders from qualified contractors, and tenderers invest their resources knowing they have a reasonable chance of success. Industry guidance suggests a shortlist of four to six tenderers for most construction projects — enough to generate genuine competition without placing excessive demands on the market.

Negotiated Tendering

Negotiated tendering involves the client approaching a single contractor — or occasionally two — and negotiating the terms, price, and programme directly. There is no competitive process in the conventional sense; instead, the client and contractor work together to develop the commercial terms of the contract.

This approach is appropriate in specific circumstances: where the contractor has specialist expertise that is not widely available, where the project is an extension of existing work and continuity is important, where the programme is critically urgent and a competitive process would cause unacceptable delay, or where the client has an established framework agreement or long-term partnering arrangement with the contractor.

The obvious risk of negotiated tendering is the absence of competitive tension. Without competing bids, it is harder to establish whether the agreed price represents fair value. The consultant QS plays a critical role in mitigating this risk by benchmarking the contractor’s pricing against market rates, historical project data, and cost models. On a negotiated £8M office fit-out, for example, the QS might benchmark the contractor’s preliminaries at 12% of construction cost against an industry norm of 10 to 14%, test the measured rates against published price books and comparable projects, and challenge allowances that appear excessive.

Two-Stage Tendering

Two-stage tendering is widely used on complex projects where the design is not sufficiently developed at the point of contractor appointment. In the first stage, contractors compete on the basis of overheads, profit margins, preliminary costs, and their approach to the project — but not on a fully priced bill of quantities, because the design information does not yet exist in sufficient detail. The client selects a preferred contractor based on this first-stage submission.

In the second stage, the preferred contractor works alongside the design team to develop the design, build up a detailed cost plan, and agree the contract sum through open-book negotiation. The second stage typically involves the contractor procuring subcontract packages competitively, with the client’s QS reviewing the tender returns and agreeing the selected subcontractors and their prices.

Two-stage tendering is particularly common on design-and-build projects and on projects using construction management or management contracting procurement routes. It allows the contractor to contribute buildability advice during design development, reduces the risk of a large gap between the tender price and the outturn cost (because the pricing is developed progressively as the design crystallises), and enables an earlier start on site because the contractor can begin enabling works while the second-stage negotiation is ongoing.

The trade-off is reduced competitive tension in the second stage. Once a preferred contractor is appointed, the client has limited leverage if the second-stage negotiations produce a price higher than expected. The consultant QS must maintain rigorous cost control throughout the second stage, benchmarking every package against market rates and challenging pricing that appears above the norm.

Serial Tendering

Serial tendering is used where a client has a programme of similar projects — for example, a housing association building 200 homes across four sites, or a school authority delivering six new primary schools over three years. The first project is tendered competitively, and the successful contractor is then appointed for subsequent projects at rates derived from the original tender, adjusted for project-specific differences.

The advantage is efficiency: the client avoids the cost and time of running separate tender processes for each project, and the contractor benefits from continuity of work. The QS’s role is to ensure that the rates from the original tender are applied fairly to subsequent projects and that any adjustments — for different site conditions, specifications, or market movements — are transparent and justifiable.

Framework Agreements

Framework agreements are a procurement mechanism rather than a tendering method per se, but they are so widely used in UK construction — particularly in the public sector — that they warrant discussion here. A framework is a pre-tendered arrangement under which one or more contractors are appointed to carry out work over a set period (typically three to four years), with individual projects awarded through either direct call-off or mini-competition among the framework members.

Major public sector frameworks include the Crown Commercial Service (CCS) construction frameworks, the Pagabo framework, the Procure Partnerships framework, and the SCAPE framework. Local authorities, NHS trusts, universities, and government departments routinely use these frameworks to access pre-vetted contractors quickly and efficiently, avoiding the need to run full procurement processes for each individual project.

For the QS, frameworks introduce specific commercial considerations. The rates and margins agreed during the framework tender are typically fixed for the framework period, which means the contractor’s profitability on individual projects depends heavily on whether market conditions have moved since the framework was let. A framework agreed in 2024 with a contractor overhead and profit margin of 6.5% may feel tight by 2026 if labour and material costs have risen sharply.

Competitive Dialogue

Competitive dialogue is a procurement procedure used for particularly complex projects where the client cannot adequately define the scope, technical solution, or commercial structure in advance. It involves a structured dialogue phase during which shortlisted contractors develop their proposals in conversation with the client, followed by a final tender stage where each contractor submits their best and final offer.

This procedure is most commonly used on major infrastructure projects, PFI/PPP schemes, and complex public sector developments where the client needs to explore different delivery models, risk allocations, or design solutions before settling on a preferred approach. Competitive dialogue is resource-intensive for both the client and the tenderers, and it is typically reserved for projects above £30M to £50M where the complexity justifies the investment.

Tender Documentation

The quality of the tender documentation directly affects the quality of the tenders received. Incomplete, ambiguous, or poorly structured tender documents produce tenders that are difficult to compare, commercially risky, and prone to dispute. The QS is typically responsible for assembling the commercial elements of the tender package.

Key Documents

A typical tender package for a construction project includes the invitation to tender (ITT) letter setting out the rules of the process, timelines, and submission requirements. The form of tender is the document the contractor signs to confirm their offer. The conditions of contract — whether JCT, NEC, or another standard form — together with any amendments or bespoke clauses. The pricing document, which may be a bill of quantities, a schedule of rates, an activity schedule, or a contract sum analysis, depending on the procurement route. The employer’s requirements or specification defining the scope and quality of work. Drawings and design information at the appropriate level of detail. The preliminaries specification covering site management, temporary works, plant, and general obligations. The pre-construction information and health and safety requirements under CDM Regulations. An information release schedule setting out when further design information will be provided. And, increasingly, sustainability and social value requirements that the contractor must address in their submission.

The Pricing Document

The pricing document is the QS’s primary contribution to the tender package, and the format depends on the contract form and procurement route.

A bill of quantities (BOQ) provides a fully measured breakdown of the work, priced by the contractor at their rates. BOQs are prepared in accordance with NRM2 (RICS New Rules of Measurement) for building works or CESMM4 for civil engineering works. They provide the most transparent basis for tender comparison and post-contract cost management, but they require a substantially complete design and significant QS effort to prepare.

An activity schedule is used under NEC contracts and lists the contractor’s activities with lump sum prices against each. It provides less measurement detail than a BOQ but aligns naturally with the programme and supports milestone-based payments.

A contract sum analysis is commonly used on design-and-build projects where the contractor is responsible for completing the design. It breaks the lump sum down by element or trade, giving the client enough visibility to manage variations and valuations without the full measurement detail of a BOQ.

Tender Evaluation

Evaluating tenders is not simply a matter of identifying the lowest price. A rigorous evaluation process assesses both the commercial submission and the quality of the contractor’s proposals, weighted according to the client’s priorities.

Price Evaluation

The QS leads the price evaluation, which involves checking the arithmetic accuracy of each submission. Pricing errors are common — transposition mistakes, missing items, incorrect extensions — and must be identified before any comparison is made. The QS also reviews the pricing for commercial balance: are the rates realistic and sustainable, or has the contractor front-loaded the pricing (inflating early work items to improve cash flow) or loaded rates on items likely to increase in quantity?

On a £25M contract tendered on a bill of quantities, the QS might receive six tenders ranging from £23.8M to £27.1M. The lowest tender is not automatically the best. If the lowest bidder has priced the structural steel package at 20% below market rates, that is a red flag — either they have made a pricing error, they intend to use a substandard supplier, or they plan to recover the shortfall through aggressive claims management. The QS should investigate and, if necessary, clarify with the tenderer before making a recommendation.

Quality Evaluation

Quality evaluation assesses the non-price elements of the tender — typically the contractor’s approach to programming, methodology, management structure, health and safety, sustainability, and social value. Submissions are scored against published criteria, often using a 0 to 5 or 0 to 10 scoring scale, by a panel that includes the project manager, design team representatives, and sometimes the end user.

The weighting between price and quality varies by project. A straightforward warehouse might be evaluated at 70% price, 30% quality. A complex hospital project might be 40% price, 60% quality — reflecting the client’s need for a contractor with proven healthcare experience, robust infection control methodology, and the ability to manage phased construction in an operational environment.

The Tender Report

The QS prepares a tender report summarising the evaluation results and recommending the preferred contractor. This report is a critical document — it must demonstrate that the evaluation was conducted fairly, consistently, and in accordance with the published criteria. In public sector procurement, the tender report forms part of the audit trail and may be subject to legal challenge if an unsuccessful tenderer believes the process was flawed.

Tendering in the Public Sector

Public sector construction procurement is governed by specific legislation that imposes additional requirements beyond standard commercial practice. Since February 2024, the governing legislation in England and Wales is the Procurement Act 2023, which replaced the Public Contracts Regulations 2015.

The Procurement Act 2023

The Procurement Act 2023 introduced significant changes to how public bodies procure construction work. The Act aims to create a simpler, more transparent procurement framework that supports economic growth, small business participation, and social value.

Key features relevant to construction tendering include a new set of competitive tendering procedures (the open procedure, the competitive flexible procedure, and limited tendering), mandatory publication of procurement notices on the Find a Tender Service (replacing OJEU following Brexit), new transparency requirements including publication of contract award decisions, pipeline notices, and key performance indicators for contract management, strengthened rules on conflicts of interest, and a new mechanism for challenging procurement decisions through the courts.

The competitive flexible procedure is particularly significant. It allows contracting authorities to design bespoke multi-stage processes — combining elements of what were previously separate procedures (restricted, competitive dialogue, competitive procedure with negotiation) — into a single flexible framework. This gives public sector clients more freedom to tailor their procurement approach to the specific needs of each project, which is especially valuable for complex construction schemes.

Threshold Values

The Procurement Act applies to contracts above specified threshold values, which are updated every two years to align with the World Trade Organisation’s Agreement on Government Procurement. From 1 January 2026, the threshold for public works contracts (including construction) is £5,193,000 including VAT — reduced slightly from the previous threshold of £5,372,609.

Below this threshold, public bodies have more flexibility in their procurement approach, though they are still expected to follow principles of transparency, equal treatment, and value for money. Many public sector organisations apply their own internal procurement rules to below-threshold contracts — for example, requiring three competitive quotes for contracts above £25,000 and a formal tender process for contracts above £100,000.

Find a Tender

All above-threshold public sector construction opportunities must be published on the Find a Tender Service — the UK’s official platform for public procurement notices. Contracting authorities publish a tender notice setting out the scope of work, the tender procedure, the evaluation criteria, and the submission deadline. Contractors can search and filter opportunities by sector, value, location, and procedure type.

For contractor QS professionals, monitoring Find a Tender is a core business development activity. Many larger contractors also subscribe to commercial tender alert services — such as Barbour ABI, Glenigan, or Construction Information Service — that provide earlier intelligence on upcoming projects before they reach the formal tender stage.

Social Value and Sustainability

Public sector construction tenders increasingly require contractors to demonstrate social value — the wider economic, social, and environmental benefits their delivery will generate beyond the immediate scope of the contract. The Social Value Act 2012 requires public bodies to consider social value in procurement, and many authorities now allocate 10 to 20% of the tender evaluation weighting to social value criteria.

Typical social value commitments in construction tenders include local employment and apprenticeship targets (for example, employing a minimum number of local residents or providing a specified number of apprenticeship starts), supply chain commitments (spending a percentage of the contract value with local or SME suppliers), environmental measures (carbon reduction targets, waste diversion from landfill, use of recycled materials), and community engagement (school visits, career talks, donations to local causes).

For the QS, social value adds a layer of complexity to tender evaluation. The financial implications of social value commitments need to be understood — a contractor who promises 50 apprenticeships is incurring a real cost that must be reflected somewhere in their pricing. If that cost is not visible, it may surface later as claims, quality issues, or delivery failures.

The Contractor’s Perspective: Pricing a Tender

For the contractor’s QS, tendering is where commercial skill is tested most acutely. The challenge is to produce a price that is competitive enough to win the project but realistic enough to deliver a profit. Misjudge that balance, and the consequences are either losing the tender or winning a project that cannot be delivered at the tendered margin.

Building Up the Estimate

The tender estimate is built from the bottom up. The QS measures the work (or verifies the client’s bill of quantities), obtains subcontract quotations for specialist packages, prices materials from suppliers, calculates direct labour requirements and costs, builds up the preliminaries (site management, plant, temporary works, welfare, and general project costs), and adds the company’s overhead recovery and profit margin.

Consider a £16M secondary school tendered on a JCT Design and Build contract. The contractor’s QS might build up the estimate as follows.

Cost Element	Amount (£)	% of Total
Subcontract packages (all trades)	10,240,000	64.0%
Direct materials	1,120,000	7.0%
Direct labour	960,000	6.0%
Plant and equipment	480,000	3.0%
Site preliminaries	1,760,000	11.0%
Design fees	320,000	2.0%
Net cost	14,880,000	93.0%
Head office overheads (3.5%)	520,800	3.3%
Profit (3.7%)	599,200	3.7%
Tender sum	16,000,000	100.0%

The overhead and profit margin of 7.0% combined is typical for a competitive education sector project. On a more complex or higher-risk project — a hospital, a data centre, or a heritage refurbishment — the contractor might seek a higher margin to compensate for the additional commercial risk.

Risk Pricing

One of the most difficult aspects of tender pricing is deciding how to handle risk. Every project carries risks that could increase costs: unforeseen ground conditions, design changes, supply chain disruption, programme delays, and statutory authority requirements, to name a few. The QS must decide whether to price these risks explicitly (by including a risk allowance in the tender), absorb them within the rates (by adding a small percentage to each trade), or exclude them entirely and manage the consequences if they materialise.

On a competitive tender, the pressure is to minimise the risk allowance to keep the price low. But an experienced QS understands that winning a project with no risk provision is a recipe for a loss-making contract. The skill lies in judging which risks are most likely to materialise, quantifying their probable impact, and pricing them at a level that protects the business without making the tender uncompetitive.

The Tender Review

Before submission, the tender is reviewed at a formal adjudication meeting attended by the estimating team, the proposed project team, and senior management. This meeting scrutinises the estimate, challenges assumptions, reviews the risk profile, and makes the final commercial decision — including any adjustment to the margin. A project director might argue for a higher margin because the programme is tight and the design is incomplete; the managing director might argue for a lower margin because the company needs the workload. The QS presents the commercial analysis that informs this decision.

Common Tendering Pitfalls

Inadequate tender periods. Tenderers need adequate time to price the work properly. A complex £30M project with a four-week tender period will produce poor-quality submissions because contractors cannot obtain reliable subcontract quotations in that timeframe. Industry guidance recommends six to eight weeks for tenders above £10M — and longer for particularly complex or specialist work. Clients who compress tender periods to save time on the front end often pay for it many times over during construction.

Incomplete design information. Tendering on incomplete design information introduces pricing risk on both sides. Contractors either price conservatively to cover the uncertainty (making their tenders uncompetitive) or price optimistically and pursue the shortfall through variations during construction. Neither outcome serves the client well. The QS should advise the client on the minimum level of design information needed for a meaningful tender and, if the design is not sufficiently advanced, recommend a two-stage process instead.

Over-reliance on price. Awarding a contract solely on the basis of the lowest price is a false economy. The cheapest tender may reflect pricing errors, unrealistic assumptions, a desperate contractor underpricing to win work, or a deliberate strategy to win low and claim high. A balanced evaluation that considers quality, capability, and price together produces better outcomes.

Poor tender documentation. Ambiguous specifications, conflicting drawings, and unclear employer’s requirements generate tenders that are impossible to compare on a like-for-like basis. Each contractor interprets the ambiguity differently, and the resulting price spread tells the client more about the quality of the documentation than the competitiveness of the market. The QS should review all tender documents for clarity and consistency before they are issued.

Too many tenderers. Inviting eight or ten contractors to tender for a single project is wasteful. Most will not win, and the effort expended on losing tenders is a cost borne by the entire industry. It also reduces the quality of submissions — contractors invest less effort in tenders where they perceive a low probability of success. Four to six tenderers provides genuine competition without overburdening the market.

Failing to debrief unsuccessful tenderers. Unsuccessful tenderers deserve a meaningful debrief explaining why they were not selected. In public sector procurement, this is a legal requirement under the Procurement Act 2023. In the private sector, it is simply good practice — contractors who receive fair, constructive feedback are more likely to tender for future projects, maintaining a healthy competitive market.

Conclusion

Tendering is where the commercial framework of a construction project is established. The procurement method, the tender documentation, the evaluation criteria, and the quality of the tenders received all shape the commercial dynamics that will play out over the following twelve to thirty-six months of construction.

For the consultant QS, tendering is an exercise in achieving value for money — designing a process that attracts the right contractors, produces comparable submissions, and identifies the offer that best serves the client’s interests. For the contractor’s QS, tendering is an exercise in commercial judgement — building a price that is competitive, realistic, and profitable, with a clear-eyed view of the risks involved.

In the public sector, the Procurement Act 2023 has modernised the legislative framework, introducing greater flexibility through the competitive flexible procedure while strengthening transparency and accountability. The works threshold of £5,193,000 from January 2026 continues to define the boundary between regulated and below-threshold procurement, and the emphasis on social value, sustainability, and SME participation is reshaping how public sector construction tenders are evaluated.

Whether you are managing a tender process or responding to one, the fundamentals remain the same: clear documentation, honest pricing, rigorous evaluation, and a process that treats all participants fairly. The QS who masters these principles — on either side of the table — adds genuine value to every project they touch.