Tendering is the process by which an owner invites contractors to price a defined scope and selects one. An invitation to tender, often shortened to ITT, is the document that starts it: the scope, the drawings and specifications, the contract terms, the submission requirements and the deadline.
The word is more common in Canada, the UK and Australia than in the United States, where the same process is usually called bidding and the document an invitation to bid. The mechanics are the same.
What an invitation to tender contains
A complete ITT gives a contractor everything needed to price without guessing, and its gaps are where disputes start.
- Scope of work and the drawings and specifications it refers to
- The form of contract being offered, and any amendments to it
- The tender form itself, including how the price is to be broken down
- Submission requirements — format, number of copies or portal, and what must accompany the price
- The deadline, and whether late submissions are accepted (they normally are not)
- Evaluation criteria, where the award is not purely on price
- Any site visit or pre-tender meeting, and whether attendance is mandatory
The common tender types
Which one you are in changes how much work is worth putting into the bid.
- Open tender — publicly advertised, anyone may submit. Lowest cost to enter, lowest odds, and the widest field.
- Selective tender — a shortlist is invited, usually pre-qualified. Better odds, and worth more effort per bid.
- Negotiated tender — a single contractor is approached and the price agreed by discussion. Common on repeat work and where speed or relationship matters more than competition.
- Two-stage tender — a contractor is appointed early on preliminaries and expertise, with the full price fixed once design is further along.
Why contractors lose tenders they should have won
Rarely price alone. Usually process.
- Submitting non-compliant. A tender that does not follow the stated format or misses a required document can be set aside before the price is read.
- Pricing the drawings rather than the ITT. Contract amendments and special conditions carry cost, and they sit outside the drawings.
- Not raising queries before the deadline. An ambiguity you priced conservatively is an ambiguity a competitor asked about and priced accurately.
- Qualifying the bid heavily. Every exclusion transfers risk back to the owner and makes an apparently lower price harder to compare — sometimes fatally.
- Leaving it late. Tenders assembled in the last day are the ones with arithmetic errors, and an error you cannot withdraw from is worse than not bidding.
Keeping the tender and the job connected
The tender is not a document you file once it is won. The price you submitted is the budget the job has to beat, and the assumptions and exclusions behind it are what you will be arguing from when scope moves.
In practice that means the tendered breakdown should survive into the project as its budget rather than being rebuilt from scratch, and the exclusions should be somewhere a project manager will actually find them six months later. An estimate that carries through to the job budget does both by default.