A successful construction project often begins with getting the procurement and tendering process right.
From appointing contractors to securing materials, these early decisions could affect the cost, quality, timelines and potential risks of your project if not prepared for.
What is procurement and tendering?
Procurement in construction refers to the overall process of sourcing and appointing contractors and suppliers for a project. It will also decide how the project will be delivered and how risks are allocated.
Tendering is one stage within the procurement process and involves contractors or suppliers submitting bids to set out how they will deliver the work, their pricing and terms. These bids are then evaluated before a contract is awarded.
Procurement and tendering can help make sure your project is delivered to the agreed standards and in line with legal and commercial requirements.
Types of tendering in construction
Choosing the right tendering method often depends on your project’s size and budget.
The different types of tendering include:
- Open tendering – This allows any qualifier to bid and is often used in public sector projects where competition is essential. However, it can result in a high volume of unsuitable bids.
- Selective tendering – This involves inviting bids from a shortlist of pre-approved contractors. It is common in private sector projects where reliability is crucial.
- Negotiated tendering – This involves negotiating directly with one contractor, usually where specialist expertise is required or time constraints apply.
Public vs private sector procurement
Public sector procurement is tightly regulated, historically under the Public Contracts Regulations 2015.
However, it is now increasingly governed by updated procurement legislation such as the Procurement Act 2023.
In public sector procurement, public bodies are expected to advertise opportunities, apply objective evaluation criteria and clearly justify contract awards.
Private sector procurement is much more flexible but is still governed by common law duties and contractual obligations.
Even without statutory rules, unfair or unclear tendering can result in disputes or reputational damage.
What are the risks in the tendering process?
If you do not manage the procurement process carefully, you could be putting your project at risk.
Issues can often arise from:
- Poorly drafted tender documents
- Failure to treat bidders fairly or consistently
- Errors in bid evaluation or scoring
- Misrepresentation by bidders
- Delays caused by procurement disputes
These problems can escalate into claims, project delays, cost overruns and strained relationships if not prepared for.
How can we help manage risks?
Early legal advice is crucial throughout the procurement and tendering process and our professional team can help:
- Draft and review tender documentation
- Advise on appropriate procurement and tendering processes
- Support bid evaluations
- Draft and negotiate robust construction contracts
- Resolve procurement and tender disputes through negotiation, mediation or litigation
Whether it is setting up compliant processes or resolving disputes, we can help manage the potential risks and protect your position so your project can be a success.
If you are planning a construction project or facing procurement challenges, contact our Construction Law team today.