Winning construction contracts: a guide

The key to running a successful construction business is securing contracts, but there’s a lot of hard work that goes on behind the scenes to make that happen.

Our guide will help you understand how to find clients, the tendering process, and how to make your business stand out from the competition.

• A guide to completing a construction site risk assessment
• Employers’ liability insurance certificate: what it is and when you should display it
• Government coronavirus advice for going back to work in the construction industry
• What type of business insurance do I need?

How to find construction clients

There are a few different ways to find new clients, but the process depends on what sort of client you’re after. This article will focus on public sector and corporate clients, rather than domestic clients.

The public sector and large corporations let businesses compete for their contract by putting them out to tender. A good starting point is the contracts finder website where you can find both national and local government contracts worth £10,000 and over. You can also use sites like Tenderio, which offer advice on bidding for contracts as well as providing a search function.

To win a tender contract, you need to understand the process. This will vary depending on who’s asking for work, but the principles are largely the same.

What are tenders? An overview

A tender is something you submit in response to an invitation to tender – it’s often made up of multiple documents.

You can be invited to tender, or respond to an open tender.

Invitations to tender can contain a lot of information, which can be a lot to process. But the information is there to help you accurately assess your ability to do the work, how much it might cost, and how long it should take.

How does the tender process work?

Once you’ve identified a suitable opportunity, it’s time to submit your tender. Much like applying for a job, the exact process varies from place to place, and many companies these days have online submission forms that you need to fill in.

Unlike applying for a job, you need to be able to meet the exact requirements – or have contractors or trusted partners who you can work with to meet those requirements. It’s no use bidding for a contract that you won’t be able to complete.

The process can look something like:

• a pre-qualification questionnaire (PPQ) – often included with open tenders, PPQs are a series of questions that cover level of experience, capacity and financial standing. They help your client determine whether you’re suitable for their project.

• a pre-tender interview – as well as what might be discovered in a PPQ, pre-tender interviews assess your understanding of the project, your approach, your current workload, and your enthusiasm, as well as giving the opportunity for clarification from both sides.

• mid-tender interviews – once you start working on your submission, either in response to an open tender or having been invited to tender, you may be asked to – or may want to – speak with your potential clients again to clarify details before you submit.

• submission of tender documents – preparing your tender documents can be the most laborious and time consuming part of the process. Read on below for what you’ll likely need to include.

• tender settlement meeting – if you’re chosen as the preferred tender, your client may invite you to a settlement meeting to enter into negotiations.

• contract engrossment and execution – contract engrossment is the process of finalising the terms of the contract, and contract execution is the signing of the contract by all parties. Once the contract is signed, work can begin.

Not all tender processes will have all of the above steps – it will vary based on company and project.

Tendering for contracts can be a tricky and time consuming process, particularly when you’re not used to it. It may be worth asking for guidance from someone in your industry who’s done it before, or paying a professional to check your documentation – or even write it for you.

What are the key things I’ll need to include in my tender?

Again, every time you tender, the process will be slightly different, but there are some key things that you’ll want to (or be asked to) include most of the time:

• a tender return slip, with details of the contract, including information like a return address and tender checklist
• a completed tender pricing document
• schedules of rates
• an initial construction phase plan
• any design proposals or method statements that have been requested
• programme
• procedures to be adopted, such as procurement procedures and cost management procedures
• demonstration of capability – such as design capability or systems used
• a BIM execution plan if building information modelling is being used
• key people involved in the project (this might include their CVs)
• how management will be organised
• plant and labour resources and availability
• prior experience
• references

For big contracts, your clients will be particularly keen to know they’re in safe hands, so it’s important you include as much detail as possible. The more detailed and accurate you can be, the better your chances of securing the contract.

How to stand apart from competitors when bidding for contracts

The first thing you always need is the ability and capacity to do the job you’re tendering for. Getting that in the bag is the most important part.

Once you’ve decided you’re the right business for the job, there are a few other things you can do to push yourself that bit further.

1. Memberships and certifications

Membership to professional bodies and certifications like TrustMark can help your business seem more reliable.

For a list of relevant professional bodies you might want to join, have a look at the Construction Industry Council’s website

2. Professionalism

Coming across as highly professional is a big factor in winning contracts.

Part of this will be in how you write your submission, and part of it will be making sure you have your company in order – legal considerations like business insurance should all be ticked off before you tender.

3. Marketing and networking

The more you can get your name out there, the more you’re likely to win bids – clients are often more keen to take on a company they’ve heard of before.

Use your professional network to expand your reach, and think about how the outside world perceives your company. You may want to have a read of our marketing guide for small businesses to help you get started.