The key to the success of many contractors is their tendering performance and the way they act with the bidding invites. It means that many construction companies can both benefit or fail with their tender possibilities in the present-day market. Each contractor selects the best-matching tendering method to achieve all the required objectives and get desired profit. For example, there are three types of companies’ behavior when it comes to the tender. It is possible to start with the project bidding software or other digital tools to pick sides with correct estimates. But in general, all these three types of tendering methods are applied the same way. Let’s take a closer look at them to understand which one suits your business goals better. This way, you can also increase the profitability of the project and sign a contract that meets all your objectives.
3 Types of the Tendering Methods in 2022Most contractors limit the range of available tendering methods to three of the most popular and efficient ones. They are open, selective, and negotiated tender approaches. Some contractor estimating software already obtains algorithms and templates to implement these methods automatically when it comes to estimates and bidding invites.
Open TenderingWhat is an open tender? Let’s clarify the terms and requirements for interested contractors. One of the stated conditions is a deposit that is returned upon successful completion of the tender, so just indicate the price, without even calculating your future profits. However, it can be said that this method consumes contractors’ resources, as many people spend time preparing tenders in vain. When the client usually chooses a lower price, there is a range of risks of not receiving the required quality and successful implementation of the project conditions. It happens because the bidders incorrectly studied the documentation. Although the customer can check the experience and proper conditions of the participants and, if necessary, reject the tender. This can lead to a worse scenario than they expected.
Selective TenderingThe client arranges selective tenders to choose the best participants. The latter, in turn, have the opportunity to prepare properly, as they are provided with a list of mandatory documents and working conditions. The customer then chooses the best. Although, it becomes very difficult for contractors to offer:
- good terms;
- the lowest prices;
- competitive agreement items.