What is a Construction Tender?

In the fast-paced world of construction, construction tenders are the backbone of how clients choose who is going to be working on their project. From commercial housing developments to major infrastructure work, the tendering process ensures transparency and competitiveness.

For contractors and subcontractors, mastering the tendering process in construction can be the difference between winning lucrative contracts and missing out on work. Here at Contractwise, we understand that winning tenders is not just about technical ability, but also about demonstrating correct and compliant financial practices. This includes CIS compliance, payroll audits and making sure you don’t get caught out by HMRC reclassification.

In this article, we’ll explain what is tendering in construction, why the process is so important and how you can win tenders in the industry.

Read on for more information…

What is a construction tender?

A construction tender is a formal offer made by a contractor or subcontractor to carry out a construction project. The process begins when a client requests bids from construction professionals, they will usually lay out the specifications they require at this stage.

Tender documents include all the necessary details, including:

• The scope of the work

• Design drawings

• Project specifications

• The project schedule

• Contract terms

• Pricing requirements

Contractors respond by submitting their proposals, which should include their pricing and evidence of skill and capability. Then, the client will review the tenders they have received and select the best one for their needs.

Essentially, construction tendering is the way in which construction projects are procured in a fair and competitive way. It ensures that proposals are compared on the same basis and all contractors understand what is required of them.

When is tendering used?

Construction tendering is used in the procurement of all kinds of construction projects. Some of the main ways the tendering process in construction is used include:

• Traditional contracts: This is mostly used when it comes to construction management. It involves an arrangement between the client, consultants and contractor. After the tendering process has taken place, the client will select a contractor to work in line with a design that has already been decided upon. An agreed-upon timeframe and cost will also be in place. This tends to be a low-risk option, as time and cost are already predetermined.

• Design and build contracts: The contractor in these contracts is responsible for both the design and construction of a project. Tendering is used so clients can compare bids that include both design proposals and construction methods. This makes the project much simpler as there is a single point of responsibility for the client. However, it does require more trust in the contractor’s design ability.

• Management contracts: When it comes to management contracts, the client will appoint designers and contractors separately. Cost certainty is lower, but it does make the process faster, especially if construction begins ahead of the design stage.

• Contractor-led contracts: In these cases, contractors often take the lead in the design by providing a team that creates concepts during the tendering process. This often leads to two teams making it to the next stage before one construction team is appointed.

When tendering is so important

The importance of tendering in construction cannot be overstated. It provides a wide range of benefits, not just for the client but also for contractors and subcontractors. Here are some reasons why tendering is so important:

• Fairness and transparency: Tendering allows multiple contractors to bid. This encourages competition, reduces favouritism and bias and helps clients get value for the work.

• Risk mitigation: Well-prepared tenders offer clarity on what is required - drawings, specifications, scope, timelines - so both clients and contractors know exactly what is expected.

• Value for money: By providing more competition, contractors are forced to innovate, optimise, reduce waste and demonstrate they can handle an efficient project. The client is then able to evaluate all proposals and decide which offers the best balance of cost vs quality.

• Quality assurance: Tender documents usually require evidence of past work as well as safety records and industry accreditations. This helps ensure contractors are capable of delivering work to the highest standard.

• Clarity and project planning: Tendering forces prospective contractors to define the scope of the project, including timescale and costs. This helps with scheduling, budgeting and resource allocation. This is essential not only for construction but also for payroll, subcontractor payments and more.

Different types of construction tenders

There are several types of tenders that clients might use. Understanding the different types can help contractors to properly prepare their bids. The main types of tenders include:

• Open tendering: Any contractor can submit a tender in response to an advertisement. This is most common in the public sector. It offers maximum competition, but it does have some drawbacks, as it can attract bids from inexperienced or low-quality contractors.

• Selective tendering: Here, only certain contractors that meet a predetermined criteria (like years of experience or certain certifications) are invited to bid. This helps ensure quality and manageability.

• Negotiated tendering: The client will pick one contractor and negotiate the terms with them rather than running through a full competitive process. This is often used for specialist work or for the continuation of existing work.

• Serial tendering: A contractor will provide a set of values for the scope of work in reference to similar projects. The client will be able to select what they want from a list of work. This is often used when there is an expectation of ongoing work.

• Framework tendering: The contractor is chosen to provide work under a framework over a period of time. Typically, this is for on-call work over a period of time. This tender can reduce costs and allow owners to get a faster response for repairs, as the contract will already have been signed.

• Single-stage tendering: The full design and specifications are prepared in advance before the invitation is sent out. Then, a contract is awarded for the whole of the project.

• Two-stage tendering: Here, the initial design has not been completed yet. A contractor will then be selected to take part in two distinct stages.

Each tendering option has pros and cons depending on the cost, speed and contractor involvement in the design and planning process. Contractors should assess which type of tender they are best suited to before making a bid.

The tendering process in construction

Understanding the full tendering process in construction is key to submitting winning bids. The typical process breaks into several stages, including:

Invitation to tender (ITT)

The client issues an invitation: a tender document that includes all the required information (scope of work, drawings, specifications, contract terms, schedule and more). This step may also include preliminary information such as site surveys and information about the client’s requirements.

Clarification

After the invitation has been issued, prospective tenders can ask questions and seek any clarification they require. Sometimes changes to the tender documents are made, and clarifications can be shared with the bidders.

Submission

Contractors prepare and submit their proposals by a set deadline. This should include full pricing schedules, technical proposals, resource allocation and much more.

Settlement

Once the submission is closed, the client will review all the tenders they have received. Sometimes, negotiation or further discussions will occur to settle any issues or suggest any changes. The preferred tender might be engaged in a negotiation to finalise contract sums and terms.

Contracts

After evaluation and any settlement, a contract is drawn up and signed. The winning contractor can then start work under the agreed terms. Non-winning bids will also be notified. Once the contract has been signed, the two parties will be bound by the project scope and cost.

How to win construction tenders

Winning tenders is always a challenging process. Many contractors may bid, but often only one can win. With this in mind, here are some good practices to consider:

Source the right tenders

Spend some time identifying tenders that align with your company’s capabilities. Bidding for tenders outside your remit will still require a lot of effort and increase the chance of failure.

Read the tenders thoroughly

Before making a bid, make sure you understand every requirement of the project, including scope, drawings, specifications, contract conditions, pricing structure and more. If something is unclear, do not be afraid to reach out to the client.

Prepare your bid

Accurate pricing is essential. You should estimate materials, labour and other things the project requires. Furthermore, you should also include health, safety and all project management details.

Focus on your strengths

Think about what makes your company especially capable for the project and make sure you include this information.

Highlight benefits

Demonstrate all of the benefits you can bring to the project, including specialist skills, better efficiency and quick turnarounds.

Use examples of past work

Include case studies and references that show previous work you have done on a similar scale. This can build credibility.

Submit it professionally

Presentation matters, so make sure your tender document is completed professionally and well formatted.

Making tendering work for your business

Tendering in construction isn’t just a box-ticking exercise, it’s the foundation for sustainable growth, reputation and profitability. A well-prepared, compliant tender positions your business as reliable and professional, while avoiding costly risks that can derail even the most promising project.

At the same time, it’s not enough to simply submit the lowest bid. Clients look for partners who demonstrate financial integrity, transparent processes and the ability to deliver safely and efficiently. That’s where compliance, documentation and proactive management make all the difference.

Whether you’re a contractor submitting your first bid or an established firm competing for larger frameworks, understanding every stage of the tendering process, and aligning it with your internal financial controls, gives you a clear competitive edge.

Win more tenders with confidence

Securing new contracts in today’s construction market isn’t just about competitive pricing, it’s about demonstrating professionalism, compliance and reliability at every stage of the process. Clients want to work with contractors who can deliver on time, on budget and within the law. That means your financial records, CIS reporting and payroll processes must be watertight before you even submit a bid.

At Contractwise, we help contractors and subcontractors strengthen their position before, during and after the tendering process. From ensuring full CIS compliance to conducting payroll audits and safeguarding against HMRC reclassification, we make sure your business is in the best possible shape to win work and protect profit margins.

Tendering can be complex, but with the right support, it becomes an opportunity, not a risk. Our team of experts provides clear, practical guidance that gives clients confidence in your capabilities and keeps your business compliant with every requirement.

If you’re ready to take the guesswork out of construction tendering and put compliance at the heart of your success, get in touch with Contractwise today. We’ll help you build stronger bids and secure more contracts by staying stay one step ahead of HMRC and ensuring full contractor and subcontractor compliance.