Tender Process in Construction: 10 Key Steps for Project Success

The tender process in construction is how contractors are selected to deliver a project. Construction tenders follow clear steps: sending out invitations, collecting bids, evaluating responses, and awarding the contract.

For project managers and owners, getting this process right means better cost control, fewer risks, and a smoother path to project delivery. Let’s walk through the 10 essential steps, from the first expression of interest to final handover.

Step 1: Expression of Interest (EOI)

An Expression of Interest (EOI) is a formal request to the market to identify contractors who are interested and qualified to deliver a project. It’s used early in the tender process to create a shortlist of suitable bidders before issuing a full Request for Tender (RFT).

EOI vs RFT: What’s the Difference?

An EOI asks for capability, not pricing. It’s about finding out who can do the job, not how they’ll do it or at what cost. In contrast, an RFT asks shortlisted vendors to submit a detailed bid, including technical proposals and pricing.

The EOI process helps project owners filter for capability before moving to detailed bids. It also forms an early checkpoint in the bidding process for construction projects, ensuring only qualified candidates proceed to the next stage.

What Happens During an EOI?

Think of the EOI as a screening step. Here’s how it usually works:

1. Issuing the EOI: The project owner releases an EOI document outlining the scope, objectives, and submission requirements. This may include basic project details, desired contractor experience, and deadlines for responding.
2. Receiving and Evaluating Responses: Interested contractors submit documents showing their capability, experience, and capacity. The evaluation focuses on technical strength, past performance, and alignment with project goals.
3. Shortlisting: Based on the evaluation, the client selects a group of suitable contractors to move forward to the RFT stage. Only these shortlisted bidders are invited to submit a full tender.

Step 2: Gaining Approval to Release the Tender Documentation

Before releasing a Request for Tender (RFT), project teams must secure internal approvals. This ensures the tender package is complete, accurate, and aligned with procurement rules.

Who’s Involved?

• Procurement teams check that the RFT complies with internal policies or government procurement frameworks. They review structure, evaluation criteria, and contract terms.
• Legal teams review the draft for risks, legal clarity, and compliance with relevant laws or funding obligations.
• Project leads confirm that technical requirements, project scope, and timelines are correct and realistic.

Each team signs off to confirm that the documentation is ready for release and reflects the approved project budget and strategy.

What Happens in this Step?

1. Finalizing the Tender Package: The project team completes all documents, including scope of work, evaluation criteria, contract terms and conditions, and submission instructions.
2. Review by Internal Stakeholders: Procurement, legal, finance, and technical reviewers go through the documents. They check for risks, gaps, or inconsistencies.
3. Formal Approval: Once all reviewers are satisfied, the package goes through the internal approval workflow. This may include executive or governance signoff depending on the project size.
4. Release Planning: After approval, the team schedules the release date, confirms publication channels, and prepares for bidder inquiries.

Why this Step Matters

Skipping or rushing approvals can lead to major issues later, unclear requirements, unfair evaluation, or even legal challenges. In the public sector, this step also ensures transparency and accountability under state or federal procurement rules.

For example, in many government frameworks like Buying for Victoria, you must get documented approval before any RFT is issued. This protects the integrity of the process and helps avoid delays or rework.

Step 3: Notifying the Market of the Procurement

Once internal approvals are complete, the project team officially publishes the tender. This step alerts the market that the construction bidding is open and outlines how contractors can participate.

Where Construction Tenders are Announced

• Tender portals: Most public and private tenders are listed on official platforms like Buying for Victoria and AusTender.
• Industry newsletters and bulletins: Trade publications or professional associations often include tender notices.
• Newspapers or project websites: For broader visibility or large-scale public projects.

These channels ensure wide access and equal opportunity for potential bidders.

Why Scope and Clarity Matter

The tender notice must clearly describe the opportunity: project summary, scope, submission deadline, evaluation criteria, and how to access full documents. Any confusion here can result in poor-quality bids or limited market interest.

Being transparent at this stage sets the tone for fairness and compliance. It also helps filter for contractors who understand the project and are serious about bidding.

What Happens in this Step?

Here’s how project teams typically carry out this phase:

1. Preparing the Notice: The team writes a summary of the opportunity with key details, including project title, location, scope, budget (if disclosed), and submission instructions.
2. Publishing to Channels: The tender is uploaded to designated portals, emailed to subscriber lists, or distributed via newsletters or advertisements.
3. Confirming Publication: The team verifies that the tender is live, accessible, and accurate across all platforms.
4. Monitoring Responses: From this point forward, the team tracks market engagement and prepares to manage inquiries during the clarification period.

A well-published tender helps attract qualified bidders and keeps the process transparent from the start.

Step 4: Interacting with the Market During the Tender Process

This step covers the clarification period. It helps ensure all contractors understand the requirements before preparing their bids.

What is the Clarification Period?

The clarification period allows bidders to raise questions about the tender documents. This might include details about scope, timelines, site conditions, or submission requirements. Responses are shared with all bidders to maintain fairness.

What Happens in this Step?

Here’s how this stage usually unfolds:

1. Opening the Clarification Period: Once the tender is published, the client announces the timeframe for questions and site visits.
2. Q&A and Written Queries: Bidders submit questions through the tender portal or email. The client compiles answers into a formal response document or publishes a Q&A summary.
3. Site Visits: For construction projects, clients may organize site inspections. This helps bidders assess access, conditions, and constraints that could affect cost and planning.
4. Addenda: If any details in the tender documents change, the client issues an addendum. This keeps all bidders working with the same set of information and deadlines.

Every bidder must receive the same information at the same time. This prevents advantages and supports an open, competitive process. Any updates, including answers, clarifications, or changes, must be shared publicly or through the official communication channel.

Step 5: Bid Preparation and Submission

This is the stage where bidders develop and submit their proposals. It involves analyzing the tender documents, preparing responses, and ensuring all requirements are met by the deadline.

What Bidders Do

Bidders start by reviewing the scope, evaluation criteria, contract terms, and submission instructions. They confirm they can meet the project’s requirements, technically, commercially, and within the timeline.

Proposal teams then write the bid. This usually includes:

• A cover letter or executive summary
• Technical methodology and work plan
• Company capability and experience
• Detailed pricing or cost breakdown
• Key personnel and resourcing plan
• Required legal and financial documents

They also gather certifications, insurance evidence, and completed checklists.

Submission Logistics

To avoid disqualification, bidders must follow the submission rules exactly. Here’s what that usually involves:

• Internal Deadlines: Many organizations set internal due dates ahead of the official deadline to allow time for review and approval.
• Submission Portals: Public tenders are often submitted through government portals like AusTender or Buying for Victoria. Private sector clients may use email or third-party platforms.
• Formats: Submissions can be digital, physical, or both. Most clients now prefer digital formats, usually PDF, submitted through an online portal.

What Happens in this Step?

Once bidders receive the tender documents, here’s how they typically manage the submission:

1. Bid Planning: The contractor reviews tender documents and assigns tasks, including writing, pricing, and document prep, to their team.
2. Drafting the Proposal: Each section is written and reviewed to align with the evaluation criteria. The team double-checks accuracy and compliance.
3. Final Reviews: Internal signoffs happen before submission. This could involve legal, commercial, and executive approval.
4. Submitting the Bid: The bid is submitted in the correct format, through the specified channel, before the deadline.

Mistakes in this step can disqualify even strong proposals.

Step 6: Evaluating Responses

Once bids are submitted, the tender evaluation panel reviews them against set criteria. This step identifies the most suitable contractor based on capability, compliance, and value.

Role of the Evaluation Panel

The evaluation panel is usually made up of representatives from procurement, technical teams, and sometimes legal or finance. Their job is to independently score each bid and ensure the selection process is fair, consistent, and defensible.

Panel members review proposals individually at first, then meet to discuss scores and reach consensus. Each member must declare conflicts of interest before the process begins.

Evaluation Criteria

Bids are assessed using three main types of criteria:

• Mandatory criteria: These are pass/fail checks. If a bid is missing required licenses, insurance, or doesn’t meet basic project criteria, it’s disqualified.
• Weighted criteria: These carry scoring weights. For example, 40% price, 30% methodology, 20% experience, 10% social procurement. Each panelist scores these based on clear guidelines.
• Value for money: This considers the overall offer, not just price. It looks at long-term outcomes, risk, innovation, and how well the bid meets project needs.

Criteria and weightings must be consistent with what was outlined in the tender documents, supporting a fair and accountable construction procurement process.

Probity and Governance

Probity ensures the process is ethical, transparent, and free from bias. This includes:

• Secure handling of bids
• Documented scoring justifications
• Independent probity advisors (in some public tenders)
• Clear audit trails for decisions

Following governance rules protects the process from legal challenge and reinforces fairness.

What Happens in this Step?

Here’s how the evaluation typically unfolds:

1. Initial Screening: Bids are checked for completeness and mandatory criteria.
2. Individual Scoring: Panel members score weighted criteria on their own using evaluation templates.
3. Consensus Meeting: The panel meets to discuss scores, resolve differences, and agree on final rankings.
4. Value-for-Money Assessment: The team considers broader benefits beyond price.
5. Evaluation Report: Results are documented and submitted for approval, including clear rationale for recommendations.

This step must be tightly controlled and well documented. It’s the core of a defensible procurement process.

Step 7: Best and Final Offer (BAFO)

A Best and Final Offer (BAFO) is a request sent to shortlisted bidders asking them to revise and resubmit their proposals. It’s used when initial evaluations show two or more strong bids that are too close to call.

When is BAFO Used?

BAFO is typically triggered after the evaluation panel finishes scoring, but needs more clarity, improved pricing, or refined terms before making a final decision. It’s also common when bids are close in value-for-money or negotiations are needed to improve an offer.

Why BAFO Matters in Close Bids

In competitive tenders, BAFO gives bidders a final chance to sharpen their pricing, clarify assumptions, or strengthen their delivery approach. It can lead to cost savings or better alignment with project goals. At the same time, it helps ensure the evaluation panel has complete and comparable information before awarding the contract.

Fairness and Confidentiality

Each bidder must receive the same opportunity, scope, and timeframe for submitting their BAFO. The client cannot disclose competitor pricing or proposal content. Communication during this stage must be clear, limited, and controlled, usually through formal written instructions.

Probity standards still apply. Any addenda or clarifications must be shared with all parties invited to the BAFO round.

What Happens in this Step?

1. BAFO Request Issued: The client formally notifies selected bidders and outlines what can be revised, usually price, schedule, or specific proposal sections.
2. Bidder Review: Each bidder reviews the request and updates their proposal within the set deadline.
3. Resubmission: Updated offers are submitted in the format and channel specified by the client.
4. Final Evaluation: The panel evaluates the BAFO submissions and finalizes scoring. Only revised sections are reassessed unless otherwise specified.
5. Documentation: All changes, decisions, and communications are recorded to maintain transparency and auditability.

This step can make or break a tight race. So, it must be handled with care and full transparency.

Step 8: Negotiations

Once a preferred bidder is identified, the client may enter contract negotiations. This step finalizes key commercial terms, clarifies any outstanding issues, and addresses risks before signing.

What’s Covered in Pre-Award Negotiations

Negotiations typically focus on specific areas that need agreement before finalizing the contract. These often include:

• Commercial terms: Refining payment schedules, deliverables, and milestones.
• Clarifications: Addressing vague proposal areas or confirming assumptions made in the bid.
• Pricing: Adjusting for scope tweaks, inflation, or market conditions, without re-opening the full competition.
• Schedules: Agreeing on start dates, lead times, or phasing strategies.

The goal is to align both parties before contract execution, without changing the core offer that won the bid.

Legal Review and Risk Allocation

Legal teams get involved to check that the final contract is sound, enforceable, and reflects what was agreed. Key focus areas include:

• Indemnity and liability clauses
• Insurance requirements
• Termination rights
• Dispute resolution methods

They also clarify who’s responsible for each risk: project delays, design changes, cost changes, or unforeseen events.

Pitfalls to Avoid

It’s easy for negotiations to go off track. Here are common risks to manage:

• Scope creep: Avoid adding new requirements or major scope changes that weren’t in the original tender. This could breach fairness or trigger legal challenges.
• Undermining fairness: Don’t give the preferred bidder a second chance to win by changing the offer significantly. This must remain a negotiation, not a re-bid.
• Poor documentation: Verbal agreements or vague changes create risks later. All updates must be captured in writing.

What Happens in this Step?

Here’s how a typical negotiation process unfolds:

1. Kickoff Meeting: The client and preferred bidder meet to set expectations and clarify negotiation scope.
2. Term-by-Term Review: Both parties go through the contract clause by clause. They discuss proposed changes and capture agreed updates.
3. Legal Input: Lawyers review redlines, flag risks, and provide advice to protect the client and ensure compliance.
4. Final Agreement: Once both sides agree, the updated contract is sent for final approvals and prepared for execution.

Handled well, this step strengthens the working relationship and helps set the project up for a smoother delivery.

Step 9: Closing the Deal

After negotiations are complete, the client awards the contract to the successful bidder. This step finalizes the outcome and communicates results to all participants.

Awarding the Contract

The selected contractor receives a formal contract award notice. This includes the signed agreement, project start date, and any next steps like kickoff meetings or mobilization. Internal records are updated to reflect the final terms and timelines.

Notifying All Bidders

Both successful and unsuccessful bidders must be notified. This is often done by email or through the tender portal. Notifications should be clear, respectful, and include:

• Outcome of the process
• Name of the successful bidder (if permitted)
• Offer of feedback (for public tenders or formal debriefs)

Unsuccessful bidders should receive communication promptly after the award to ensure transparency and close the process fairly.

Publishing Award Information

For government or public sector projects, award details may need to be published. This can include:

• Project name and description
• Name of the awarded contractor
• Contract value and duration
• Summary of the evaluation outcome (in some jurisdictions)

Publishing this information supports accountability and allows vendors to improve future submissions.

Step 10: Project Delivery

Once the contract is awarded and signed, the project shifts from construction procurement to delivery. This step activates the construction phase, with the project team taking full responsibility for execution, oversight, and performance management.

It brings the bidding process for construction projects full circle. What was promised during project bidding now becomes real work, monitored and managed by the delivery team.

Handover to the Project Team

A structured handover ensures the delivery team understands what was agreed during procurement. Procurement must clearly transfer:

• The full contract and all appendices
• Scope of works, key project milestones, and completion dates
• Risk allocations and negotiated clauses
• Evaluation notes and any pricing assumptions
• Contact points for ongoing queries

This ensures continuity, reduces misunderstandings, and helps the delivery team enforce contract terms effectively.

Mobilization and Early Setup

The contractor begins mobilization, which includes preparing resources, organizing subcontractors, and planning site access. The client supports this phase by:

• Conducting kickoff meetings to align expectations
• Finalizing permits, insurances, and site readiness
• Confirming schedules for reporting and communication
• Approving mobilization plans or method statements

If this setup phase is rushed or unclear, delays and change requests usually follow.

Contract Management

Contract administration kicks in immediately. The project team monitors:

• Progress vs program: Comparing actual vs planned milestones
• Payment applications: Verifying claims, retentions, and variations
• Compliance: Ensuring the contractor follows specs, safety, and quality standards
• Change control: Documenting and approving variations before they affect delivery

Clear documentation and communication reduce disputes and support transparency during audits or reviews.

Performance Monitoring and Reporting

Project managers track contractor performance using tools like:

• Site diaries and superintendent reports
• Safety and quality audits
• KPI dashboards (e.g., defect rates, delivery times, workforce levels)
• Formal meetings like PCGs or steering committees

Issues flagged early, such as late materials, underperformance, or safety incidents, can often be fixed before they become serious.

Closing the Feedback Loop

Before closeout, the procurement team should reconnect with the delivery team to gather insights:

• Did the contract reflect what was needed?
• Were the evaluation criteria effective?
• Did the contractor deliver as promised?
• What could improve in future tenders?

This feedback strengthens future procurement strategies and avoids repeating mistakes.

Making the Tender Process Work for Your Project

A well-run tender process is the backbone of successful project delivery. When each step is clear, fair, and documented, project teams can secure the right contractor, control costs, and reduce risk. Whether you’re managing public infrastructure or private developments, following this 10-step approach sets your project up for success.