Each year, public sector contracts account fully for nearly 40% of construction work available. These commissions total in value of over 33 billion. To claim a percentage of the construction budget, businesses must secure tenders. The tender process is the method businesses are needed to follow to create their bid on construction contracts. Tender opportunities vary based upon the requirements of people and private sectors.
Sectors where construction tenders are plentiful include schools, hospitals, social housing and roads. The housing sector alone accounted for over 1.7bn in construction construction across all departments. Tenders are usually linked to construction machinery, construction equipment, roof works, special trade construction works, repairs of building installations, maintenance service of building installations, architectural contracts and other related services.
Local Authorities & Construction Contracts
Local authorities have budgeted expenditures in the UK for 2010-2011 year at 121.9 billion. Fourteen percent of the budget is likely to be spent on housing, and 38% of the budget is likely to be spent on education. Currently, the UK local authorities have several construction contracts underway and several more planned. A number of these contracts include:
The budget percentages aren’t indicative of the remaining contracts in construction for 2010-2011. A sizable percentage of the construction contracts is going to be allocated towards construction projects linked to health. The Department of Transport and Department of Children, Schools and Families also account fully for a significant percentage of the budget. Over 17 million is going to be spent in the Department of Health, and over 26 million in the Department of Transport is remaining on the budget for this year. Over 8 million in contracts are remaining and is going to be allocated towards construction linked to education.
Construction Tendering Process
The construction tendering process is similar to obtaining tenders in other industries. Most businesses simply locate a tender provider, select a tender and bid for the business. Since the government supplies 25% of local employment, many construction tenders are public contracts. Hence, many businesses count on government tenders as a vital supply of income. The private sector may offer tenders through tender opportunity providers. Tenders are supplied online, by phone or by email. Depending upon the mode of retrieval, tender searches vary. Elaborate websites have been developed to create tender searching easier and more convenient. When tenders are displayed in real-time, businesses that identify them quickly have a competitive advantage.
Selecting a suitable tender provider is practically as important as bidding for the opportunity. Many tender providers offer construction businesses more opportunities than others. The more opportunities open to businesses, the more likely the business will land a feasible contract. Ensure that the tender provider offers tenders from both people and private sector. This will guarantee your construction company finds the very best opportunities.
Through tender websites, businesses may seek out tenders by industry, region or other advanced methods. During registration, some websites will gather information regarding the business to deliver relevant tender opportunities via email. When the organization finds a relevant tender, an agent of the organization will prepare a PQQ or ITT. These documents contain questions that businesses must adequately answer concerning the opportunity. The questions must be answered thoroughly to show your business’s competitive advantage over other businesses bidding for the same construction contracts.
Some firms that apply frequently for construction contracts might be tempted to copy and paste answers into the fields provided. While this saves the organization time, often the information isn’t relevant to the question asked. If the information isn’t relevant, this will make the organization appear less informed about the opportunity. The evaluator will select another applicant that provided a detailed description of how a project is going to be completed. The business with the lowest bid that meets the project’s needs will win the contract. Once the bid is won, the construction company is expected to generally meet the criteria outlined in the bid, such as the bid price. Those who don’t might be penalized.
Businesses that are dedicated to local authority contracts should observe that small and medium-sized businesses are considered. In 2004 and 2005, these businesses won 59% of the total local authority contracts. Construction contracts were included in this percentage. These types of businesses are encouraged to make the most of the neighborhood authority budgets as well.
Lower Value Contracts
Contracts valued under 100,000 are believed lower value contracts. Some contracts are bid below cost to provide services under special circumstances. A number of these lower value tenders tend to be present in construction, transport, security and electrical. Businesses should remember that these contracts exist. Lower value tenders serve as an alternative supply of income. Firms that perform well on these contracts may be viewed for other tenders at full value.