Tender of Contract Negotiation
I will just explain the difference between these two. Firstly, there is a practice amongst Architects and Designers to Tender a project to 3 or 4 possible builders.
Tendering is the process used to choose a project based on price competition but assumes all tenders are priced equally, which is not common
Negotiation is the process when you discuss your project and its costs with a specific builder, based on the compatibility of your project and your relationship.
I recommend Negotiation with a builder as it the process of these discussions that add value to your project.
Tendering is when an Architect or Designer sends out the plans and specifications for your project with all the relevant consultants' documents to various builders for a contract price. If successful, the Builder (or commonly called Main Contractor) gets the job and signs a building contract with you. But, this is an intensive process for builders and their trades to accurately price a job for free. And this lends itself to shortcuts and inaccurately priced jobs. You may think you are getting a good deal, but if they have not included something, they will make up the cost costing in any variations, as they have a business to sustain and we all need to balance what we give for free with what we can charge for to stay afloat.
As builders are increasingly encouraged and implementing charges for providing estimates and project contract prices (and rightly so as their time and work are to be valued) this way of doing is not something I recommend to my clients. Another reason is that the decisions are almost price-based, and not all prices are equal or fair. Often materials are swapped out or cheaper alternatives in the fine print, items left out (noted as excluded in the fine print) which doesn’t make for accurate price comparison. It also means 3 builders and their tradesmen spend a huge amount of time not getting a job. These are people who have families at home and often price jobs after dinner, during their family time. Not all prices are equal and I believe in building relationships rather than putting a monetary value on them. The difference in tenders is always in the labour, as materials cost the same because your Architect or Designer has specified them. Unless of cause, it’s not what you thought you were getting.
Contract Negotiations are what I prefer. It means that you as a client chooses your builder based on your relationship with him, based on how well you think you can work with him (or her) and deal with what things actually cost. This builds a relationship of trust, which the tendering process doesn’t foster.
There is discussion and a builder knows he will get your job so there is a willingness to be honest and open about costs and be forthcoming with solutions. Like me, at the Design Advice Meeting, there is a willingness to give your project their very best because they are valued. It is starting the conversations that will move your project to a pleasing result. Remember as a client, you will need to continue to work with his builder to the end of your project. You want to start in a good way so it can build in a positive direction.
To read my press blog on the value of Building Relationships click HERE