3 Reasons Why the Tendering Process Doesn't Work (and what we're doing to fix it for us all)
I love fashion and I want to give you an analogy.
If you could freely choose either option, would you rather go into the store and buy a suit off the rack, or would you prefer a custom suit made just for you?
Just about anyone would probably take the custom suit. After all, why wouldn’t you?
And this ties into the typical tendering process, with the traditional approach giving you the suit off the rack rather than the one that’s tailored to you perfectly.
Your construction project is one that you want to be proud of, and the way tendering is done today nearly guarantees you’ll start off on the wrong foot.
Here are 3 reasons you should never take the lowest bid from a contractor.
When you work with a contractor that has no relationship with you, you’re going to be working with someone who is invested more in their own interests than guaranteeing a great client experience.
That’s not to say that contractors are inherently bad, but like any business they’re going to focus on how to get your project done with the least cost, and that will create a negative experience for you that will often leave you feeling like you’ve been taken advantage of.
And you yourself don’t know if they’re a good fit, and you don’t know what their abilities or expertise are.
For us, we want you to bring us into the mix. We want to get to know you and your culture so that we can guide you and customize your project to suit you perfectly. We want to celebrate wins together. A project started in the spirit of collaboration is a transparent project that runs without delays and increased costs.
2.More Isn’t Better
Years ago, a typical tender process would have involved 4 or 5 contractors at most. These days, there can easily be 10 to 12 contractors in the room, and I’ve seen as many as 17 at once.
When you’ve got this many in the room at once bidding against each other, it’s not a matter of who can get you the lowest bid, it’s a matter of who will make the first mistake, or who is willing to leave money on the table by going in at cost or below cost.
The bid that is lowest is by far never the best. You and the contractor will soon discover that the bid misses so many details that you're only going to end up with headaches the whole way, creating a bad project experience for everyone involved.
The consultants responsible for a project’s drawings have their fees chiselled down by clients from the start. So in order to give enough information, the drawings they provide are often copied and pasted from 5 projects or more back.
They can only do so much with the fees they’re paid, and with these drawings often having as little as 50% accuracy, huge gaps in the project will form.
It might excite you when you think you’re getting the best deal ever, but what you’re going to put yourself through in additional costs and aggravation and disappointment, pales in comparison.
The tendering process is an outdated way of doing business that isn’t centered around transparency, trust and accountability.
Without any relationship being formed between client and contractor, you’re going in blind and setting yourself up for stress and aggravation. Gaps are going to form and because there’s no relationship, opportunities for innovation in terms of time and cost are going to be missed.
Set yourself up for success by working with a contractor that values collaboration so that you can work with a team that has your best interests in mind.
You’ll ultimately save money over accepting the lowest bid, and the overwhelm that comes with the traditional process will be eliminated.
The Collaborative Construction Process™
We have such a passion for building better together with our clients, that we literally wrote the book on it. This is the formula for how we do business, and how we want to start to transform the way everyone chooses to work together and execute work. We have many resources available from an intro video featuring the author himself, a scorecard that you can fill out yourself to determine where your business falls today in the process, and the ability to request a call with the founder of Centrecon and author of the process, Gianluca Pascale. Find out more and get your own free digital copy of The Collaborative Construction Process™ for yourself by clicking below.