Tender negotiations
A tender is a submission made by a prospective supplier in response to an invitation to tender. It makes an offer for the supply of goods or services.
An invitation to tender might be issued for a range of contracts, including; equipment supply, the main construction contract (perhaps including design by the contractor), demolition, enabling works etc. Generally, tendering refers to the construction works rather than securing consultancy services which are referred to as 'appointing'.
In response to an invitation to tender, invited tenderers will submit their tender, which will include their price for supplying the goods or services along with proposals for how the clients requirements will be satisfied if these have been requested.
Once tenders have been received, tender negotiations might proceed with two preferred tenderers prior to selection of the successful bid. They are an opportunity to agree or clarifying any matters regarding the pricing and quality of the proposed works, conditions of contract and programme. This is the last chance the client and consultant team will have to negotiate with tenderers while they are still subject to the pressures of competition.
Tender negotiations may involve:
- Tender qualifications to the proposed contract conditions.
- Anomalies or clarification in the tender pricing document.
- Alternative offers to the design or specification.
- Resolution of provisional sums.
The record of the agreements reached needs to be carefully drafted and signed off by both parties as it will form part of the contract documents.
Generally, the contract administrator co-ordinates negotiations with the tenderers, but negotiations may be led at different stages by the cost consultant, contract administrator, lead designer or architect, or by a client representative such as a project manager.
[edit] Find out more
For a detailed description of the tender process for appointing the main contractor see the free work plan stages:
- Traditional contract: tender.
- Design and build: tender.
- Public project: tender.
- Public project: PFI tender.
- Construction management: tender.
- Management contract: tender.
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