Competitive tender
Competitive tendering is a common method of procurement in the construction industry.
A tender is a submission made by a prospective supplier/contractor in response to an invitation to tender. It makes an offer for the supply of goods or services.
Those tendering for a contract are often competing with others, and generally, none of the tenderers are aware of the quotes provided by each other; therefore, they are incentivised to submit their most competitive tender. In this way, it is believed that competition in procurement can add value for the client.
Competitive tendering became increasingly common in the UK in the 1980s, when it was seen as a way of making public organisations open themselves up to bids from a number of different firms. This was intended to increase transparency, drive down costs, and improve the efficiency of state-funded organisations such as central and local government departments.
However, it has been criticised for placing too much emphasis on cost, and not necessarily achieving best value for the client. Competitive tendering can be seen as a 'race to the bottom' and can lead to disputes later in the project as suppliers seek mechanisms to increase their price.
Methods of assessing tenders which consider criteria other than the lowest cost include:
- Best value.
- Auction theory.
- Most Economically Advantageous Tender (MEAT).
- Mean value.
- Exclusion of the extremes.
- Weighted selection criteria.
- Balanced scorecard.
For more information see: Tender evaluation, and Procurement route.
NB The UN Procurement Practitioner's Handbook, produced by the Interagency Procurement Working Group (IAPWG) in 2006 and updated in 2012, defines competitive bidding as: 'A procurement method in which offers from competing suppliers are invited by open advertisement and provided with the scope, specifications, and terms and conditions of the proposed contract as well as the criteria by which the offers will be evaluated. The objectives of competitive bidding are to obtain goods or services at the lowest cost or best value through open and fair competition.'
[edit] Related articles on Designing Buildings Wiki
- Best value.
- Best value procurement.
- Bid evaluation.
- Bid strategies.
- Compliant bid.
- Form of tender.
- Insourcing.
- Most economically advantageous tender (MEAT).
- Non-compliant tender.
- Preferred tenderer.
- Proposals.
- Single-stage tender.
- Tender.
- Tender evaluation.
- Two-stage tender.
- Variant bid.
- Why the lowest price isn't sustainable.
Featured articles and news
BSRIA Sentinel Clerk of Works Training Case Study
Strengthening expertise to enhance service delivery with integrated cutting-edge industry knowledge.
Impact report from the Supply Chain Sustainability School
Free sustainability skills, training and support delivered to thousands of UK companies to help cut carbon.
The Building Safety Forum at the Installershow 2025
With speakers confirmed for 24 June as part of Building Safety Week.
The UK’s largest air pollution campaign.
Future Homes Standard, now includes solar, but what else?
Will the new standard, due to in the Autumn, go far enough in terms of performance ?
BSRIA Briefing: Cleaner Air, Better tomorrow
A look back at issues relating to inside and outside air quality, discussed during the BSRIA briefing in 2023.
Restoring Abbotsford's hothouse
Bringing the writer Walter Scott's garden to life.
Reflections on the spending review with CIAT.
Retired firefighter cycles world to raise Grenfell funds
Leaving on 14 June 2025 Stephen will raise money for youth and schools through the Grenfell Foundation.
Key points for construction at a glance with industry reactions.
Functionality, visibility and sustainability
The simpler approach to specification.
Architects, architecture, buildings, and inspiration in film
The close ties between makers and the movies, with our long list of suggested viewing.
SELECT three-point plan for action issued to MSPs
Call for Scottish regulation, green skills and recognition of electrotechnical industry as part of a manifesto for Scottish Parliamentary elections.
UCEM becomes the University of the Built Environment
Major milestone in its 106-year history, follows recent merger with London School of Architecture (LSE).
Professional practical experience for Architects in training
The long process to transform the nature of education and professional practical experience in the Architecture profession following recent reports.
A people-first approach to retrofit
Moving away from the destructive paradigm of fabric-first.
New guide for clients launched at Houses of Parliament
'There has never been a more important time for clients to step up and ...ask the right questions'
The impact of recycled slate tiles
Innovation across the decades.
EPC changes for existing buildings
Changes and their context as the new RdSAP methodology comes into use from 15 June.