Subcontract & Supplier Tender Close
The Subcontract Close is a huge Milestone in the life of a tender."
The Push
“The Push” is normally the last two weeks of a medium-sized tender however on Tier 1 projects the could Day and night for months. To explain the process –
Most tenders in the Tier 3 sector (Project $100M and below) need duration between 3 to 8 weeks duration. I would say most of the tenders I have worked on are 4 weeks long. The Tier 2 sector (Projects between $100m – $500M) could be in a number of months to a short year and Tier 1 sector (project over $500m into the Billions) could be a process in years.
Time is always a battle no matter what Building Tier you swim in. When you are tendering, you try to set a subcontractor tender close a reasonable time before the builder has to submit a tender.
Most the industry that swim in the Tier 3 sector – so you try to close the subcontractor tender at least approximately 1 week before the builder’s submission to the client.
(Larger projects in the Tier 1 & 2 sector you would obviously need more time to close depending on how large you tender team is).
Working backward from the tender submission – it is often hard to coordinate everyone’s time to come together. So the final schedules and constructing the bid takes at least a day, The preliminaries and trades take a day or two, Plugging the trade pricing into subbie comparison takes at least two days and the document control of filing the quotes and also chasing late subbies who haven’t submitted takes at least a day.
The Subcontract close is also the Milestone target where you want to have the Non priced criteria drafted and finalized including the Draft clarifications, Methodology, and Program.
So this process for a large project or a small project is roughly the same.
The Subcontractor close is also that time that you realize if estimating gods are going to be nice or kick you in the gut. Hopefully, the Phone calls to the day before have reaped rewards and you look like you will get a few quotes in the trades. If the tender has been bullied by a lot of Addenda, I would normally indicate a subbie deadline as COB however to achieve a basic coverage in all trade is extremely difficult and to extract clusters even harder.
What I am saying is: work with subcontractors and not against them, The seven-day minimum milestone allows the estimator just enough time (mostly) to Plug any coverage holes. Now for a large Tier 1 project, this time would expand accordingly.
Two weeks prior to formal tender submission no more addenda or RFIs should be issued by either party without an Extension of time. This industry practice is not strictly adhered to. This causes a lot of grief for both Builder and subcontractors. The fact is – this common courtesy has been lost over the years. I have witnessed major addenda being issued a few days before the formal tender close and a number of days after the subcontractors close.
If you are lucky with your Trades – often smaller architectural trades come in early, so you can vett then and plug them straight into your estimate. If you are really lucky (and your systems have worked) where you have received a number of subbie Quotes that you can do a preliminary Subbie comparison before the subcontractor close. So goal to being proactive and efficient never goes away.
With most of the document control software today the Quotes from the subbies can come back via the same system that the original RFQ was sent to the subbie. The problem with these document control system is not necceassarily the system, it is normally the fear of the subbie that their quote gets lost in the system.
There are a number of systems out there and the subbie gets use to one system and then that builder that the subbie has just gotten use to – goes quite. So the induction goes on. To counter this subbie insecurity (which is totally understandable) – I normally dont insist that subbies use the document control system. If they are confortable , sure use it, if they are not I offer then standard email address.
"Give the Subcontractor or Supplier options"
Quote
COMPLIANCE
Before you file the Quote attached to the email – Do a high-level scan of the quote to see if it is compliant and site-specific:
- Does it include for the tender documents, Addenda, and site-specific requirements?
- Does the quote include for any client schedules?
- Do the Services trades include the SOW and Schedules within the Specification?
- Does the quote include for all OHS, Manuals & Warrantees?
- Is the quote sent to other competitors? and who?
- Does the quote reflect out internal BOQ?
- Has the quote got any long lead times?
- What is the duration on the site?
Basically, if the quote doesn’t comply in any way – quickly fire off an email, text to correct any issue and then MAKE A PHONE CALL AS WELL to get the information…
DON’T TAKE ANY CHANCES…
Filing
Quotes
So here are some suggestions:
- Set up a folder names Subcontractors and within this folder create all your common trades with a code number and Trade name (Ie 5000_Electricals etc).
- Rename your email in the following Format – Company Name_Trade_Project and file accordingly.
OK – Now you have received a quote there are a few document controls that take time but will help later in the process.
The First issue is that Quotes can often come back as a long-winded email. Often the Emails which have a PDfF quote attached may have additional clarifications on the email.
Second, it is always good to file like trades in the one spot in a filing system.
Third and very important – Before you file the Quote do a high level audit to ensure all the Key information has been answered.
FOLLOW ON
Affect of Bad coverage
You normally compete again at least 4-5 other builders and the subcontract fishing pool regionally is normally pretty finite – So getting onto the phone and doing the hard yards whilst doing your data input to the subcontractor comparison on your estimating software.
If you are really cramming a tender on the back of another tender – You may choose to bill less and use the second principle quotes and try to find a cluster of tenders to reduce your risk.
Now if you don’t find any trade coverage (Second Principles) – your “First principles” estimate becomes very important. So the last minute check of your science behind the number and spending time looking back to past projects and benchmarking with escalation factors applied.
If you wish to read more about
Tender Process – Click Here
Cost Plan & BOQ Formats – Click Here