Tender price
A tender is a submission made by a prospective supplier (the ‘tenderer’) in response to an invitation to tender (ITT). It makes an offer for the supply of goods or services. A tender price is therefore the price supplied by the tenderer to the client for the supply of those goods or services.
The tender price is usually based on information about the project that has been supplied by the client in the ITT documents. These documents are usually as comprehensive as possible to allow the formulation of accurate tender prices and may include:
- A letter of invitation to tender.
- The form of tender.
- Preliminaries.
- The form of contract.
- A tender pricing document.
- A drawing schedule.
- Design drawings.
- Specifications.
If the client’s documents to not adequately describe the project they could lead to unrealistic tender submissions.
When suppliers submit their tender price, it will represent the price at which they have decided to do the works or supply the goods or services, along with proposals for how the client’s requirements will be satisfied - if these have been requested.
The tender price supplied will be presented in a way set out in the tender pricing document A tender pricing document sets out the way the client wishes to review the breakdown of overall tender prices provided by the tendering contractors.
Because the tender pricing document is designed to allow easy, like-for-like comparisons between the tender prices submitted by the various suppliers, it can reveal to the client where the best value for money lies among the tenderers, identifies significant differences as well as areas where savings can be made or negotiations undertaken.
[edit] Tender price indices
Tender price indices allow tenderers and clients to see how tender prices for building contracts are changing. The indices may be used in estimating, cost-checking and fee negotiation with reference to particular sectors e.g private housing, commercial work etc.
An example is the Tender Price Index of Public Sector Building Non-Housing (or PUBSEC) that is produced by the Building Cost Information Service (BCIS) on behalf of the Department of Business Innovation and Skills (now called the Department for Business, Energy and Industrial Strategy (BEIS).
PUBSEC is based on rates of measured work contained in Bills of Quantities or quantified schedules for accepted tenders. The index, published quarterly, is accurate as it is based only on projects where the procurement process has produced ‘measured work’ documents.
For more information see: Construction price and cost indices.
[edit] Related articles on Designing Buildings Wiki
- Appointing consultants.
- Auction theory.
- Best value.
- Common mistakes in construction tenders.
- Competitive tender.
- Construction contract.
- Construction price and cost indices.
- Due diligence when selecting contractors or subcontractors.
- Form of tender.
- How to prepare tender documents.
- Pre-tender Interviews.
- Margin.
- Mid-tender Interviews.
- Pre-qualification questionnaire.
- Private Finance Initiative.
- Procurement route.
- Tender evaluation.
- Tender processes.
- Things to avoid when tendering.
- Two stage tender.
- Invitation to tender.
- Tender documentation.
- Tender return slip.
- Tender settlement meeting.
Featured articles and news
Licensing construction; looking back to look forward
Voluntary to required contractors (licensing) schemes.
A contractor discusses the Building Safety Act
A brief to the point look at changes that have occurred.
CIOB Construction Manager of the Year award
Shortlist set to go head-to-head for prestigious industry title.
HSE simplified advice for installers of stone worktops
After company fined for repeatedly failing to protect workers.
Co-located with 10th year of UK Construction Week.
How orchards can influence planning and development.
Time for knapping, no time for napping
Decorative split stone square patterns in facades.
A practical guide to the use of flint in design and architecture.
Designing for neurodiversity: driving change for the better
Accessible inclusive design translated into reality.
RIBA detailed response to Grenfell Inquiry Phase 2 report
Briefing notes following its initial 4 September response.
Approved Document B: Fire Safety from March
Current and future changes with historical documentation.
A New Year, a new look for BSRIA
As phase 1 of the BSRIA Living Laboratory is completed.
A must-attend event for the architecture industry.
Caroline Gumble to step down as CIOB CEO in 2025
After transformative tenure take on a leadership role within the engineering sector.
RIDDOR and the provisional statistics for 2023 / 2024
Work related deaths; over 50 percent from construction and 50 percent recorded as fall from height.