Implications of governance obligations being embedded within construction contractors’ tendering procedures

ABSTRACT

Construction contractors’ (contractors) internal tendering procedures (ITP) face increasing governance obligations, either through corporate regulations, legislation and/or societal expectations. Increased governance can impact approval steps, and decisions made, to pursue a project from prospect identification, through tender preparation, submission and contract execution (the ‘tender timeline’). The question arises as to whether inappropriate time is spent preparing for and gaining internal approvals, at the risk of constraining time spent developing well reviewed competitive tender solutions.

Drawing on semi-structured interviews with 27 high-profile major contractors and analysis of ITP documentation provided by 13 of them, this study considers the efficiency of various ITP governance models and identifies factors that influence the tender approval management levels. On average those 13 contractors utilise 4.2 approval gates; prepare approval documentation addressing 547 questions, 19 attachments; and face 12 review committees before securing 16 approvals over the tender timeline. The results provide an opportunity for clients, consultants, and researchers to gain a better understanding of major contractors’ ITP governance obligations that need to be addressed, often within very short tender periods. Contractors can use these findings as a benchmarking opportunity for their ITP governance. Many of the principles raised also apply to engineering consultancies.

KEYWORDS:

• Contractor
• tendering procedure
• governance obligation
• tender
• construction

Acknowledgments

The authors acknowledge the contribution of an Australian Government Research Training Program Scholarship in supporting this research, and the willingness of the 27 (anonymous) contractors to be interviewed, particularly those 13 who provided ITP extracts, as part of this research.

Disclosure Statement

No potential conflict of interest was reported by the authors.

Additional information

Notes on contributors

Stephen Urquhart

Stephen Urquhart is a civil engineering with over 35 years’ industry experience working in various line management roles for major Australian engineering consultancies and construction contractors. Having held commercial manager and pre-contracts manager positions, where he was responsible for contractor’s tendering for new projects, he is now a PhD candidate at Curtin University. He has a First Class Honours in Civil Engineering and a Master of Engineering Science. He is a Fellow of the Institution of Engineers Australia and a Member of the Institution of Structural Engineers.

Andrew Whyte

Having worked in industrial and academic environments in Europe and Asia-Pacific, Dr Andrew Whyte, Assoc. Professor and Head of Civil Engineering at Curtin University Perth Australia, has gained a wide-ranging knowledge of construction-design team integration, whole-life assessment of structures, and asset development using local technologies, sustainable methods and low-cost means.