Running a Fair Fit-Out Tender: The Process, Step by Step

A tender is fair when every bidder prices the same thing

Most problems blamed on a contractor after award were created during the tender. Bids came back pricing different scopes, one bidder learnt something on a phone call the others never heard, the drawings changed halfway through, and the decision was made on a number nobody could fully explain. The project then starts with a contract whose scope is less settled than it looks, and the difference returns as variations priced without competition.

The common belief is that a tender is about getting the lowest price. A tender is really about getting prices you can compare. Competition only works if every bidder prices the same pack, sees the same answers, works to the same deadline and is judged on criteria they knew in advance. That is what "fair" means here, and it protects the client as much as the bidders.

This article is about the process. Reading the returned bids line by line, once they are in, is covered in comparing fit-out quotes line by line, and judging the contractor itself, including references and site team, in choosing a fit-out contractor.

The tender process at a glance

ISO 10845-1 sets out generic processes, methods and procedures for a construction procurement system intended to be fair, equitable, transparent, competitive and cost-effective. Few private fit-out clients adopt it formally, but its principles are a useful test of any tender process.

Shortlisting: decide who could win before asking for prices

Only invite contractors you would genuinely be willing to appoint. Before the tender, check each firm on the same criteria: comparable projects of similar size and type, capacity to take on the work at your dates, ability to deliver the services packages, financial standing, the site manager they would assign, and their approach to health and safety on an occupied building if that applies.

A short, serious shortlist produces better bids than a long one. Contractors put real effort into pricing when they believe they can win, and the client can level and interview every bidder properly.

The tender pack decides the quality of the bids

Bids can only be as consistent as the documents they price. A complete pack usually includes:

• Instructions to tenderers: the deadline, the format of return, the validity period required, how queries are handled and the evaluation criteria.
• Drawings and specification, at a stated stage of design, with the approved make list for key items.
• The pricing basis: a bill of quantities, a pricing schedule or a performance brief, with the method of measurement stated where quantities will be re-measured. IS 1200 is the method of measurement commonly referenced for building works.
• Draft contract terms: payment, retention, liquidated damages if any, insurance requirements, variations and defects liability. The way the contract allocates risk is explained in turnkey vs item-rate fit-out contracts.
• The programme and constraints: target dates, access, working hours, lift and loading rules, and the landlord's fit-out guidelines.
• Scope boundaries: what the landlord, nominated parties or the client's other contractors will do, and where each package stops.

The choice between a BOQ and a performance brief follows the design. A BOQ against developed drawings gives the most comparable bids. A performance brief suits design-and-build, where bidders contribute design, but then the brief has to state outcomes clearly enough to compare. How the procurement route shapes this choice is covered in contract structures for interiors projects.

During the tender: site visit and the query log

Site visit. Every bidder should see the space, the services, the access route and the building's constraints. Hold a joint visit or separate visits with the same information given, and record what was said.

Query log. All questions should come in writing to one named person. Each answer goes to every bidder, without identifying who asked, as a numbered clarification or addendum that forms part of the tender documents. Keep the log: it is the record of what the bids were based on.

Changes to the pack. If the drawings or scope change during the tender, issue the change to all bidders and consider extending the deadline. A change sent too late to price properly will be priced as an assumption or an exclusion.

Levelling and clarification: compare, then question

Once bids are in, level them before ranking them: line up exclusions, assumptions, allowances, makes and the services boundary, and record every adjustment made. The detail of that work is in the line-by-line comparison article linked above.

Then hold clarification meetings with the leading bidders, using the same agenda for each. Ask the named site manager to attend. Ask how they read the programme, what they see as the risks, what their exclusions mean in practice, and how they will price changes. Construction project management guidance such as IS 15883 (Part 1) treats procurement as one of the managed processes of a project, and the same discipline applies here: write down what was asked and answered, and confirm any agreed changes in writing to the bidder.

If your process allows a best and final offer, ask all remaining bidders at the same time, on the same basis. Do not reveal one bidder's prices to another.

Award: put it in writing before work starts

Make a written recommendation that explains the decision against the stated criteria, get it approved, then issue a letter of award or the contract itself. If a letter of intent is used to start early work, it should say what work it authorises, up to what limit, and what happens if the contract is not concluded. Collect the contractor's insurance certificates and any security before site access. Then inform the unsuccessful bidders.

Common mistakes

• Inviting too many bidders. Effort per bid falls and levelling becomes unmanageable.
• Tendering an unfinished design as if it were complete. Bids fill the gaps with assumptions, which return as variation orders.
• Answering a query by phone. One bidder now prices on different information.
• Changing the scope late without more time. The change is priced as an exclusion.
• Leaving the evaluation criteria unstated. The decision cannot be explained, and bidders cannot price to it.
• Bid shopping. Using one bidder's price to push another down damages the tender and future ones.
• Starting on a verbal award. Scope and terms are then settled after work has begun.

What to ask before you issue the tender

• Is every bidder on the list a firm we would genuinely appoint?
• Is the design at a stage that supports the pricing basis we have chosen?
• Does the pack state the deadline, return format, validity and evaluation criteria?
• Are the landlord's rules, working hours and scope boundaries included?
• Who is the single point of contact for queries, and how will answers be issued?
• Is the tender period long enough for proper pricing?
• Who approves the award, and what will the contract look like on day one?

Standards referenced

Construction procurement processes, methods and procedures in ISO 10845-1; method of measurement of building works in IS 1200; construction project management guidance in IS 15883 (Part 1). Tender procedures for a private project are set by the client, and the contract terms, letters of intent and award documents should be settled with the client's legal adviser; the scope and specification are for the project's designers and engineers to confirm.