The tender process is one that too many building practitioners in the industry continue to abuse.
They maybe not abuse it intentionally, but they are no doubt guilty of ignorance at what the objectives are in the tender process. Their use of the process is a far cry from the more common definition of “tender”:
Cruelly, the way the building industry plays the game, tendering is executed without much love, and certainly with no compassion or sympathy to the hard working mums and dads forced into securing their futures through such an inequitable, unfair and poorly administered process.
The building industry’s interpretation of the tender process is so misunderstood by the majority of the players that the ineffectiveness is now so far out of control and the waste of time and money no longer represents value for the consumer. Nor are there many positive benefits or advantages for the participants, whether the head contractor, sub-contractor, suppliers, consultants or the industry in general.
The predominant failure of the current system is due more to ignorance in recognising what the tender process is designed to do and capable of delivering; it simply fails the famous ‘Pub Test’ of delivering genuine value and fairness from its application/adoption.
In today’s market, a tender is typically put together by inexperienced, sometimes non-commercial people with little or no knowledge of what’s important to the client. This said, the majority of building contractors use their estimating departments as the entry point for college graduates and other would be participants into the industry. This runs contrary to the pre-requisite skills, experience, knowledge of the construction process/buildability issues, programming, commercial competency and investment advice required – all of which an unsuspecting property investor is ultimately being burdened with.
Revered and respected builder AV Jennings would turn in his grave if he could see the charade that is purported by the cost clerks that are being engaged to assemble a commercial offers for inclusion in a building contract.
Beyond that, it’s hard to say a tender has any significant value given that it has co contractual status, and is only an offer to treat. Hence sub-standard tender documents are accepted in the bidding phase (opening the doors later to variations involving time and cost claims), heavily qualified bids and a reluctance of the builder to provide adequate assessible information in the form of trade breakdowns, technical data and names and experience of site personnel and trade contractors. These factors have rendered the process almost totally benign.
In the absence of a more open, fairer and rewarding/non-adversarial procurement process, the builder has few options and is effectively committed to playing a game of risk-on-risk with no purposeful outcome. The tender process has degenerated into a game (without a clear outcome), absent of a set of rules (the tender code in virtually unenforceable), without a captain (lack of leadership due to the tripartite nature of the industry), and totally devoid of a coach (the notion of genuine strategic objectives in an ‘unwinnable game’ speaks for itself).
The acknowledgement that the tender process is part of the overall game is clearly proven following the comparison of the start price (the tender proposal) and the final delivered cost (the completed project value). The tender game (as practiced by the greater proportion of builders) is often disguised or muddied by the extensive negotiation following the tender receipt and post tender negotiations associated with tender clarifications, completion time, actual price, compliant/conforming bid, and then the contractual conditions (sometimes qualified in the bid, other times in the attempt to abate “risk” to the one person who in reality seeks the reward for taking such risks).
All have proven to provide escape doors for a builder to exploit when playing the game, with the only injury being to his or her professional standard and the treat that “we’ll never use you again”, a threat which often only lasts until you make another mistake that is too good to refuse.