WHAT IS OPEN TENDERING AND WHAT DOES IT INVOLVE?
The open tendering process is the cornerstone of public sector construction projects in Australia.
For Quantity Surveyors (QS), it presents a unique opportunity to secure valuable work. However, navigating the intricacies of open tenders can be daunting.
This blog post will equip you with the knowledge and strategies to excel in securing projects through this method.
What is Open Tendering?
Open tendering is a transparent procurement process where any qualified bidder can submit a proposal for a construction project. This method fosters competition and aims to secure the best value for the project owner, typically a government agency.
The process typically involves the following steps:
Project Announcement: The project owner publishes a tender invitation with details like project scope, tender documents, and submission deadlines
Tender Documents: The project owner provides detailed tender documents outlining the project requirements, specifications, and evaluation criteria. These typically include:
Bill of Quantities (BoQ): A detailed breakdown of all materials, laborand equipment needed for the project.
Contract Conditions: The legal framework governing the project execution.
Project Schedule: A timeline for project completion.
Tender Submission: Interested bidders, including QS firms, prepare and submit their tenders following the specified guidelines within the deadline.
Evaluation and Award: The project owner evaluates tenders based on pre-defined criteria, often including:
Price: Competitiveness of the QS firm's fee proposal.
Experience: Track record of the QS firm in similar projects.
Methodology: Proposed approach to cost management, risk assessment, and project control.
Qualifications: Expertise and experience of the QS team assigned to the project.
Contract Award: The project owner awards the contract to the bidder deemed to offer the best value for money.
The Role of the Quantity Surveyor in Open Tendering
Quantity Surveyors play a pivotal role throughout the open tendering process. Here's a breakdown of their key responsibilities:
Tender Preparation:
Analyze tender documents to understand project scope, risks, and complexities.
Prepare a detailed BoQ, ensuring accuracy and completeness.
Develop a robust cost estimate reflecting project elements, contingencies, and potential price fluctuations (refer to Australian Institute of Quantity Surveyors (AIQS) Cost Estimating Practice Note for guidance Australian Institute of Quantity Surveyors (AIQS): https://www.aiqs.com.au/).
Develop a clear and achievable project schedule that aligns with the overall construction timeline.
Craft a compelling tender response highlighting the firm's experience, methodology, and value proposition.
Tender Submission:
Ensure all required documentation is prepared and submitted within the designated timeframe.
Address any clarifications sought by the project owner during the tender period.
Tender Evaluation (Optional):
In some instances, QSs may be invited to present their tender proposals and answer questions from the project owner's evaluation panel.
Strategies for Success in Open Tendering
Here are some key strategies to maximize your QS firm's chance of success in the open tendering arena:
Develop a Strong Pre-qualification Strategy: Many large-scale projects have pre-qualification criteria. Research upcoming tenders and identify projects aligning with your firm's expertise. Invest in pre-qualification documents to demonstrate your firm's capabilities and increase your chances of progressing to the tender stage.
Invest in Resources: Dedicate qualified personnel and resources to the tendering process. This could involve a dedicated tender team or outsourcing specific tasks like BoQ preparation to specialists.
Build Relationships: Network with project owners and architects to understand their needs and priorities. This can provide valuable insights during the tender preparation stage.
Continuous Learning: Stay updated on industry trends, best practices, and legislative changes impacting construction costs. Consider attending industry events and conferences offered by organizations like AIQS.
Data-Driven Approach: Utilize industry data and cost databases to support your cost estimates and enhance their credibility. Resources like Cordell or Rider Levett Bucknall (RLB) cost databases can provide valuable benchmarks (be sure to check for regional variations).
Consortiums: Consider collaborating with other QS firms or consultants for complex projects with diverse expertise requirements.
Pricing Strategy: Develop a competitive fee proposal that reflects the value you bring while ensuring a healthy profit margin. Utilize cost planning techniques to ensure your fees are realistic and sustainable.
Post-Tender Analysis:
Even if your firm isn't awarded the project, conducting a post-tender analysis is crucial. Review the evaluation process and feedback from the project owner to identify areas for improvement. Analyze your tender response and identify areas where your pricing, methodology, or team qualifications could be strengthened for future bids.
Data suggests that a focus on continuous improvement through post-tender analysis can significantly increase a QS firm's success rate in open tenders
A 2022 study by the University of Melbourne found that firms implementing a structured post-tender analysis process achieved a 15% increase in successful bids over a two-year period.
The Future of Open Tendering
The open tendering process is constantly evolving. Here are some emerging trends to consider:
Digitalization: Increased use of online tender platforms and digital tender documents is streamlining the process and facilitating collaboration.
Sustainability: Project owners are placing greater emphasis on sustainable construction practices in tender evaluation. Quantity Surveyors can enhance their bids by demonstrating expertise in green building technologies and life-cycle costing.
Two-Stage Tendering: This approach involves an initial pre-qualification stage followed by a more detailed tender process for shortlisted bidders. This can be beneficial for QSs as it reduces the time and resources invested in preparing full tenders for projects they may not be ultimately awarded.
To sum it up:
Open tendering offers a rewarding path for Quantity Surveyors to secure valuable projects. By understanding the process, honing your tendering skills, and embracing industry trends, you can position your firm for success in this competitive environment.
Remember, continuous learning, a data-driven approach, and a commitment to client value are key differentiators in the open tendering arena.
For further information and resources, consult the following:
The Department of Finance, Australian Government: https://www.finance.gov.au/government/procurement
Australian Institute of Quantity Surveyors (AIQS): [https://www.aiqs.com.au/]
Cordell: https://www.corelogic.com.au/news-research/reports/cordell-construction-cost-index
Rider Levett Bucknall (RLB): https://www.rlb.com/
GEDON™ recognizes the critical role of skilled professionals in creating and managing effective BOQs. We specialize in executive preconstruction recruitment, connecting construction firms with experienced quantity surveyors and cost estimators who possess the expertise to elevate your project success.
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Contact us today to discuss your project's BOQ requirements and access our network of top-tier preconstruction talent. Our team is dedicated to helping you build successful construction projects from the ground up.
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