Construction Tenders: Guide for Project Managers & Contractors

Construction tenders are a big part of how projects get off the ground. They help project owners choose a suitable contractor and give contractors a fair chance to win work. But if you're not familiar with how it all works, construction tenders can quickly become a tangle of documents, deadlines, and decisions.

Let’s walk through what a construction tender is, when and why it’s used, the types of tenders available, and how the entire process works. Whether you're managing a construction project or preparing a bid, you’ll get the clarity you need to run a better tender process.

What are Construction Tenders?

Construction tenders are formal requests from a project owner asking contractors to submit a price to complete a specific scope of work. It’s part of the procurement process used to find and select the right contractor for the job. The tender usually includes detailed documents like drawings, specifications, timelines, and contract terms.

Contractors respond to the submitted tender by preparing a proposal, also called a bid, that outlines how they will deliver the work and at what cost. Tenders help project owners compare options based on price, capability, and availability. They're used in both public and private construction to make contractor selection fair and competitive.

In the public sector, construction tenders are often required by law and must follow a set process. In the private sector, owners have more flexibility but still use tenders to invite multiple bids and get the best value.

Why Tendering is Essential in the Construction Process

Tendering gives project owners a structured way to choose the right contractor. It ensures pricing is competitive, selection is fair, and everyone works from the same scope of work.

Here’s why tenders in construction matters:

✅ Promotes transparency: Tenders, especially in the public sector, follow set procedures to ensure all bidders have equal access to the same information and deadlines. This is a core reason tendering exists in public procurement.

✅ Encourages competition: By opening a project to multiple bidders, owners can receive varied technical proposals. This typically improves quality and pricing outcomes.

✅ Controls cost: When all bidders price against the same scope and documents, it helps owners compare costs apples-to-apples and spot inconsistencies or hidden pricing risks.

✅ Reduces project risk: Tender evaluation criteria often include past experience, financial standing, and technical capability, which helps filter out unqualified or high-risk contractors.

✅ Supports accountability: Once a contractor wins a tender and signs a contract, they’re expected to deliver according to the terms they bid on. This provides a clear basis for enforcement.

✅ Meets compliance standards: Most public infrastructure and government contracts require open or selective tendering under procurement laws and guidelines (e.g., Local Government Act, state/federal procurement rules).

✅ Improves documentation: The tender process compels project owners to define scope, timelines, and deliverables upfront, creating a clearer foundation before construction contracts are awarded.

Who Uses Construction Tenders

Construction tenders are used by anyone responsible for hiring contractors or managing project delivery. This includes public and private sector organisations across all types of projects.

Common users include:

• Government agencies: Local, state, and federal bodies use tenders to deliver infrastructure like roads, schools, and hospitals.
• Developers and property owners: Private developers issue tenders to engage builders for residential, commercial, or mixed-use projects.
• Project managers: PMs lead the tender process on behalf of owners, ensuring the right documents go out and responses are evaluated properly.
• Architects and consultants: They may issue tenders for subcontractors or recommend suitable contractors during design stages.
• Tier 1 and Tier 2 builders: Large builders often tender out trade packages (e.g. electrical, plumbing, concrete) to subcontractors.
• Facility managers: For maintenance or capital upgrades, facility teams use tenders to bring in reliable contractors under contract.

Construction Tender Example

A construction tender example might look like a formal document from a local council inviting bids for a project. The tender package would include design drawings, a bill of quantities, contract terms, and clear submission requirements. It allows qualified contractors to price the work and outline how they plan to deliver the project.

When To Use Construction Tenders

Use construction tenders when you need a structured process to select contractors based on cost, capability, and compliance. In many public projects, it's not optional since it’s required by law.

Tenders are mandatory when:

• The project is government-funded: Local, state, and federal agencies must follow procurement rules that require formal tendering.
• The contract value exceeds a legal threshold: Most jurisdictions set financial limits where open or selective tendering becomes mandatory.
• Procurement policies apply: Public institutions, utilities, and large corporations often have internal procurement rules that require tenders for transparency and fairness.

Tenders are optional but recommended when:

• The project carries high financial or delivery risk: A formal process helps assess contractor experience and capacity before award.
• Multiple contractors could do the job: Tendering ensures you compare prices and methods under the same scope.
• You need competitive pricing: A structured bidding process can lead to better value, especially in private sector work.
• You want clear documentation: Tenders create an audit trail that helps resolve disputes and justify decisions later.

6 Types of Tenders in Construction Industry

Construction tenders can be structured in different ways, depending on the needs of the project. Each tendering method influences who can submit a bid, how submissions are reviewed, and how a contract opportunity can be awarded.

1. Open Tendering

In this method, the open tender is publicly advertised, and any qualified contractor can submit a bid. It promotes transparency and broad competition.

This approach is typically used on public projects where fairness and open access are key. However, evaluation can take longer due to the high number and varying quality of responses.

2. Selective Tendering

By contrast, selective tendering invites only prequalified or shortlisted contractors to bid. The project owner chooses firms based on past performance, technical capabilities, or registration status.

This method reduces evaluation time and risk but may limit market competition. It’s well-suited for complex or high-value projects where experience is essential.

3. Negotiated Tendering

In negotiated tendering, the owner works directly with one or more contractors to agree on terms. It’s often chosen when the project involves specialised work, is time-sensitive, or continues from an existing contract.

While this method offers flexibility, it may reduce pricing transparency compared to competitive bids.

4. Serial Tendering

With serial tendering, contractors submit pricing based on a schedule of rates for a series of similar projects. This method works well for repetitive programs.

This method is best for school refurbishments or office fit-outs where the scope stays consistent across locations. It streamlines procurement and simplifies cost planning over time.

5. Framework Tendering

Framework tendering establishes a panel of contractors under a multi-year agreement. As projects arise, work is assigned either directly or through mini-competitions.

This setup is especially effective for public agencies managing ongoing capital works, as it reduces lead times and supports consistency across projects.

6. Single-Stage vs. Two-Stage Tendering

Finally, single-stage tendering issues all documents at once. Contractors submit a complete proposal covering both technical and financial details. It’s used when the design is mostly resolved.

On the other hand, two-stage tendering separates early engagement from final pricing. Stage one focuses on capability and high-level input. In stage two, the preferred contractor helps finalise the design and cost before signing a full contract. This approach works best for complex or design-build projects requiring early collaboration.

Tendering Process in Construction

The tendering process in construction follows a clear sequence of steps designed to help project owners choose the right contractor through a fair and competitive approach.

Here’s how the process typically works:

Step 1. Invitation to Tender (ITT) or RFP

The process begins when the project owner prepares and issues an Invitation to Tender (ITT) or a Request for Proposal (RFP). These documents outline everything a contractor needs to know. It includes scope of work, technical drawings, specifications, contract terms, deadlines, and submission requirements.

Depending on the type of tender, this invitation may be public (open to all qualified contractors) or sent directly to selected bidders. You may also see terms like ITB (Invitation to Bid) or RFQ (Request for Qualifications), depending on the structure of the process.

Step 2. Clarification Period

After receiving the tender documents, contractors often have questions. During the clarification period, they can request more information or raise concerns about details in the documents.

The project owner responds to these queries in writing and shares them with all bidders. This step helps avoid misinterpretation and reduces the risk of disputes later on.

Step 3. Tender Submission

Contractors prepare and submit their bids by the deadline. A typical bid includes pricing, a breakdown of costs, a project timeline, proposed methodology, and supporting documents such as licenses, company qualifications, and past project examples.

Submissions must follow the instructions provided. Any missing or late information can lead to disqualification.

Step 4. Bid Evaluation

Once all bids are submitted, the project owner or evaluation panel reviews them against set criteria. This may include cost, technical approach, experience, proposed schedule, and compliance with requirements.

The goal is to find the contractor who offers the best overall value, not just the lowest price. Some evaluations also involve interviews or follow-up questions before making a decision.

Step 5. Tender Settlement and Contract Execution

After selecting a preferred contractor, the owner may enter into final discussions to confirm details, resolve any outstanding issues, or review alternate proposals (sometimes called variant bids). Once everything is agreed upon, both parties sign the contract. This stage locks in scope, pricing, and responsibilities before work begins on site.

Step 6. Post-Tender Negotiations

In some cases, negotiations continue even after the preferred bidder is selected. These post-tender discussions help clarify specific terms, align on deliverables, or finalise contract conditions. This step ensures that both parties fully understand the project scope, expectations, and risk responsibilities before moving forward.

What’s the Project Manager’s Role in Construction Tendering

Project managers are responsible for running the tender process smoothly from start to finish. They handle the coordination, communication, and documentation that keep everything moving and ensure the right contractor is selected.

• Manage the full tender lifecycle: PMs oversee each phase, from preparing documents to signing the contract. They set the schedule, assign responsibilities, and track progress to avoid delays.
• Prepare and review tender documents: They work with consultants and stakeholders to ensure the scope of work, drawings, BoQ, and specifications are clear, complete, and ready for issue.
• Handle clarifications and submissions: PMs manage bidder questions, issue formal responses or addenda, and confirm all bids are submitted correctly and on time.
• Lead communication between parties: They act as the main point of contact between the client, consultants, and bidders, ensuring everyone stays aligned throughout the process.
• Support evaluation and contract award: PMs coordinate the bid review process, help tender document evaluation outcomes, and assist in final negotiations before contract signing.
• Maintain accurate records and timelines: They track key dates, keep tender logs up to date, and ensure all tender documentation is filed correctly for audit and project handover.

On top of that, project managers need to understand the procurement rules tied to the contract. This lets them align documents with compliance, flag risks early, and prevent costly revisions.

What’s Included in a Construction Tender Package

A construction tender package includes all the information a contractor needs to price and plan the job accurately. It outlines the scope, technical requirements, timelines, and contract conditions.

Typical documents for construction tenders include:

✔️ Scope of work: A clear breakdown of what the contractor is expected to deliver.

✔️ Bill of Quantities (BoQ): A line-by-line list of materials, labor, and quantities for pricing.

✔️ Specifications: Detailed requirements for materials, workmanship, and standards.

✔️ Drawings: These are architectural, structural, and services plans needed to understand the design.

✔️ Schedules: Key project dates, milestones, and proposed duration.

Specialised construction tender documents may include:

✔️ BIM Execution Plan: If the project uses Building Information Modeling, this outlines how models will be developed and shared.

✔️ Site waste management plan: Required on some projects to show how materials and waste will be handled.

✔️ Contract conditions and terms: Legal clauses that define responsibilities, risks, and payment structure.

✔️ Health and safety requirements: Guidelines and expectations related to site safety compliance.

Where to Find Construction Tenders and Tendering Opportunities

Construction tenders are usually posted on public procurement portals, tender platforms, and local government websites, such as AusTender (Federal Government) and NSW eTendering. Project managers can also find tendering opportunities through registration systems and industry networks.

Here’s how you can get construction tenders:

• Public sector websites: Government departments, councils, and infrastructure agencies often list tenders on their official sites.
• Online tender platforms: Marketplaces allow potential contractors to browse current tenders, register interest, and download documents.
• Industry associations: Some professional bodies publish tenders or share any tender opportunity with registered members.
• Prequalification systems: Many organisations require contractors to register and submit company details before sending tender invites.
• Direct invitations: Established contractors may receive private invites to tender from past clients or Tier 1 builders.

Writing and Submitting a Winning Construction Tender (for Contractor-Side PMs)

Contractor-side project managers play a key role in shaping a strong bid. A clear, complete, and well-structured tender helps demonstrate capability and win a tender with the client.

Here are some practical ways to strengthen your tender submission:

• Follow the instructions exactly: Read the tender documents carefully. Use the formats provided. Submit all required attachments.
• Break down your pricing clearly: Use the BoQ or pricing schedule as instructed. Double-check calculations and align with the scope.
• Explain your approach: Include a simple, job-specific methodology. Show how you’ll deliver on time, manage risks, and stay within budget.
• Highlight relevant experience: Include similar completed projects, with short summaries, values, and client references.
• Include key team members: Attach CVs for site supervisors, project managers, or specialists. Show their role and track record.
• Check compliance: Make sure your bid includes all certifications, insurance, and licenses. Use a checklist to avoid omissions.
• Submit early: Don’t leave it to the last day. Uploading in advance gives time to deal with file errors or final checks.

Best Practices for Successful Tendering

Project managers on both the client and contractor side are responsible for keeping the construction tender process clear, accurate, and on schedule. Here are some best practices that help improve outcomes and avoid common issues:

• Set clear timelines and stick to them: Define deadlines early for documents, questions, evaluations, and submissions.
• Use standard templates: Avoid confusion by using consistent formats for ITTs, pricing schedules, and response forms.
• Keep communication organised: Log all bidder queries and responses. Issue clarifications to everyone at the same time.
• Review documents thoroughly: Double-check that all drawings, specs, and schedules are complete and up to date before release.
• Maintain an audit trail: Record key decisions, scoring outcomes, and communication. This protects against disputes or challenges.
• Prequalify when needed: Use a shortlist process for complex or high-value construction work to reduce evaluation time and risk.
• Debrief after tender close: Review what worked, what didn’t, and where you can improve the next time around.
• Stay compliant: Align the process with construction procurement rules, internal policies, and construction contract law, especially on public projects.

Final Thoughts on Construction Tenders

Construction tenders are a core part of delivering construction projects the right way. They create structure, support fair selection, and give both clients and contractors a clear path forward.

When managed well, tendering leads to stronger partnerships, fewer surprises, and better project outcomes. Understanding the process makes it easier to plan, price, and deliver with confidence