The development of a more efficient internal tender procedure framework for Australian construction contractors

In this post GFC world, as legislatively imposed corporate governance requirements continue to increase so does the complexity of Australian construction contractors' (ACC) internal tender review processes.  This burden combined with increasing client tender submission requirements and shortening tender periods mean ACCs have less time to develop innovative construction methodologies to produce a winning tender.  Research into tender procedure best practice has tended to be client-centric, often led by government inquiries that produce industry guides, leaving a gap regarding ACC best practice.A series of semi-structured interviews involving a cross section of ACCs, is seeking to develop a best practice framework for tender procedures.  Commencing from prospect identification ACC business development and tender teams now face rolling tender reviews throughout a project’s tender period with Risk, Legal, Commercial and Finance Departments in addition to senior management. Nearly all ACCs interviewed to date were unaware of research developing mathematically based bid/no-bid and mark-up decision modelling, let alone use such models.  In many cases ACC governance associated with tender review processes are now more about risk mitigation to avoid winning potentially loss making projects than determining a winning mark-up value.This research provides contractors with an opportunity to benchmark their tender procedures, something not normally possible due to concerns regarding loss of competitive edge, perceptions of collusion or breach of competition laws.  Development of a best practice framework can improve tendering efficiency and the industry’s overall competitiveness.  For researchers of tender practices this work provides a detailed insight into contractors' tender procedures which may facilitate development of bid/no-bid and mark-up models that practitioners actually use.  For clients the paper facilitates understanding of contractors' internal burdens and highlights the need to avoid shorter tender periods, especially where bespoke contracts are at play.