Mistakes in tenders: Why tender abandonment is common in construction

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The Access Group discusses the pitfalls of withdrawn tenders and the need for increased clarity and collaboration throughout a construction project’s lifetime

Recently, Hammersmith and Fulham Council announced they had abandoned procurement for a £75m fire-safety construction contract. This was due to mistakes in initial tender documents that had made information unclear for contractors and would have made the council unable to fairly evaluate bids.

The council stated the reason for abandoning the tender stage was because the pricing tables were “not sufficiently clear or structured”. Make no mistake, the responsible thing for Hammersmith and Fulham Council to do was to withdraw this tender, they said they felt it did not meet their “high-quality standards” for such an important project.

But it still begs the question: where did it go wrong in the first place? This is a common occurrence at the early stages of construction projects, and this is another example of the need for increased clarity and collaboration throughout a project’s lifetime.

It is first worth mentioning that a recommendation made by contractors from the Cabinet Office’s recent ‘Outsourcing Playbook’ was to “engage with the market early”. If this tender proved difficult for experienced contractors to decipher, it would be interesting to know the work that was done beforehand in consulting industry experts and the wider market.

The need for standardisation

We have spoken previously about the importance of two-stage procurement in construction (“any decisions or errors made in initial stages can hinder a successful project”), and this further emphasises the need for standardisation across industry. Adding an extra procurement stage takes away the assumptions and guesswork on both sides of the tendering process. The first procurement stage means that not only are resources, pricing and timescales effectively mapped out, the market can also give guidance on how this tender should look.

Interestingly, the Confederation of British Industry (CBI) recommends that single-stage procurement should be discouraged on any project above £10m. However, it must be noted that in public sector projects, Government can set their own guidelines for single-stage projects, which often includes an initial consultation with industry experts before a project goes out to tender.

The crux of this issue is the lack of communication between businesses, (whether private or public) suppliers and contractors. Certainly, Hammersmith and Fulham Council are far from the only organisation that has found themselves in this situation, but the regularity of it in the industry shows just how important it is for everyone involved in construction to actively work on transparency and trust.

The Access Group has a guide discussing one of the Hackitt Review’s key recommendations: connect every stage of a project’s life. This guide goes into how the industry can hope to achieve that through collaboration and open, honest data. Have a read below.tender

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