Give Another Contractor The Opportunity to Tender

american business — Sat, 06 Feb 2010 01:02:59 +0000

On receipt of an invitation to tender, the contractor has to decide whether to accept or decline the invitation. If declined, the documents are returned to give another contractor the opportunity to tender. The estimating procedure
using full bills of quantity is very time-consuming and costly. There is no point in expending this effort unnecessarily, so when an invitation arrives the contractor will consider the following, set against the background of the company’s current workload.

Is the size of the contract too small or too large? If too small, the culture of the organisation may be inappropriate to manage the works, and overheads will make the bid uncompetitive. If too large then the company’s resources may not be able to cope. The first M1 motorway project was divided into four separate contracts. John Laing bid for all four and although not the cheapest on each, the client asked them to consider constructing all four as one contract. The total value of the works was very high relative to their annual turnover. Laing’s board made a strategic decision to take on the work.

Has the company experience of this type of work? Again, this may become a strategic decision to break into a new market. Equally, it could be removed from the company’s experience and the decision made to decline.

American Express » Tender

Give Another Contractor The Opportunity to Tender