Types of tendering in construction

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Types of tendering in construction
An open tender ensures no bias in the selection process. (Comstock Images/Comstock/Getty Images)

The offer, time needed to complete a project, sum of money and other related conditions that are associated as contract obligations for the completion of a construction project collectively form a tender. The managing and commercial determining of the tender is called tendering, and this is done based on various details, such as estimates.

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Open tender

An open tender is a type of tendering under which an invitation is issued to all interested contractors so they can submit tenders. This process is considered as one of the most unbiased methods as even an unknown or new contractor can have the opportunity to receive the contract.

Restricted or selected tender

In this process, a few selected contractors are invited to make a bid for the tender. However, this method leaves a lot of room for bias. The process reduces competition to those invited to bid. The method is used in cases when the construction is somewhat selective and needs high technology and specialised expertise, skill and experience. Only those contractors who can fulfil all of these requirements are invited to bid.

Negotiation tender

The process of negotiation tendering involves the client consulting chosen contractors to negotiate the contract and its terms. This process is adopted for special circumstances. For example, it is often used in emergency situations that require the completion of a project within a short span of time or with complex contracts in which financial and technical properties are difficult to identify. This negotiation tendering process is also used in situations involving security projects of national importance.

Direct order tender

The method of direct order tendering involves directly naming some specific contractor to implement a particular project. An example of a direct order tender is a project by the military. Direct order tenders usually involve low implementation costs.

Web-based tendering

Web-based tendering has become a popular option. Web-based technology is used for the tendering processes. Under this system, tenders are advertised online and tender documents uploaded. Any interested person can fill out the tender documents and bid for a project online. Various electronic tendering applications are used in countries like America, Australia, Europe and Japan.

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