Tendering and procurement

The problem

Two failures cause most of the trouble that follows. The first is a scope that is not actually defined, tendered to contractors who each price a different job. The lowest number wins, and the difference between what was priced and what is needed comes back as variations.

The second is a contract nobody read commercially. Onerous time bars, uncapped liquidated damages, latent condition risk transferred wholesale, payment terms that will not survive contact with a subcontractor chain. These are priced badly or not at all, because the person reviewing the contract was a lawyer looking at legal risk, not a builder looking at whether the job can be run under it.

How this works

On the owner side: define the scope so that tenders are comparable, run the tender process, and assess submissions on more than the bottom line. A tender that is twelve per cent cheaper because it has excluded something the job needs is not cheaper.

On the contractor side: review what is being asked before it is priced. Identify the clauses that will cost money, price them or qualify them, and know which ones are worth walking away from. Some tenders should not be bid.

What you get

• Scope of works definition and tender documentation review
• Tender assessment and comparison on a normalised basis
• Commercial contract review — the clauses that will cost money on this job
• Risk allocation advice and qualification schedules
• Subcontract package strategy and back-to-back review
• Negotiation support through to execution

Call when

• You are about to sign a contract you have not had reviewed by anyone who will have to work under it.
• Your tenders have come back with a spread you cannot explain.
• You are pricing a job with clauses you have not seen before.