Submitting a tender is not filling in a form. It is promising, in writing, to build a defined thing for a stated sum within a stated time, and to carry the consequences if you cannot.
That is why the pricing decision is only half the work. The other half is reading the documents properly, deciding what you are not promising, and writing it down clearly enough that nobody can reasonably disagree later.
Most tenders that lose money were not lost on the arithmetic. They were lost on a scope gap that was never clarified, or a programme that was accepted without checking it.
Good estimating follows the same sequence every time, because a fixed sequence is the only way to notice what is missing:
That last item is where a bid is often won on price and lost on risk. If the form allows qualifications, use it. If it does not, and the risk is unacceptable, that is a reason not to bid rather than a reason to absorb it silently.
A tender sum is built in layers, and each layer has to be visible in your own working even when the client only sees a total:
The common failure is folding overhead and margin into the rates until the number is a mystery, then discounting from a baseline nobody understands. When pricing goes wrong, there is no way to find out which layer was wrong.
Keep the layers separate in your working file. Bid day is the worst day to reconstruct them.
A unit rate is labour, material, plant, waste, plus the addition for preliminaries, overhead and margin. On a domestic extension, material is often easier to price than labour, because labour is a productivity assumption.
Two systematic errors:
Using a productivity figure from a different job type. Tiling 20 m² of floor in a new build is quicker than tiling the same area in an occupied house with furniture, protection and a limited working day. Both are tiling, they are not the same rate.
Ignoring the awkward fraction. The last 10 percent of most trades takes 20 percent of the time, because it is the fiddly edges, the cuts and the making good. A tender built only on straightforward production output will lose margin on the detail.
Waste is the third. Material waste varies from 5 percent on bulk fill to 20 percent on cut tiles in small rooms, and a rate that ignores it is a rate that eats margin rather than earning it.
There are only two honest ways to handle an identified risk. Price it as an item, or price an allowance and name it.
Quietly inflating rates to cover a risk is the third way, and it is the worst: it makes the bid uncompetitive in the parts that are well understood and provides no evidence of the risk when it happens. When the risk materialises, the contractor cannot show what was allowed for it.
The risks worth naming on most tenders:
Each of these can be priced as an item or excluded in writing. Either is professional. Silence is not.
A tender that accepts a completion date shoulders the risk of delay, and delay has cost. Two checks before signing up to a date:
Does the programme fit the work, including drying, curing, inspections and the lead times for materials and subcontractors? A twelve week extension with a four week steel lead time is not a twelve week job unless the frame is ordered on day one.
Are there dependencies on other people that the programme assumes? Client decisions, statutory approvals, other contractors and utility connections. Each one is a reason for an extension of time if the contract recognises it, and a reason for a claim on preliminaries if not.
Most tender risk comes in through a subcontractor's quote, and the risk arrives as a scope gap rather than a price.
For each package, check:
A mechanical quote that excludes builders work, or an electrical quote that excludes making good, is a quote that leaves you pricing someone else's work with no time to get it wrong in.
The most profitable decision in tendering is often the one made before any estimating starts. A bid costs real money in estimating time, and a bid that is priced to lose is worse than no bid at all.
The questions worth asking before committing:
Is there a realistic chance of winning, or is this a price check for a contractor already selected? Does the contract carry a risk profile the business can carry, in cash and in liability? Is the client and the designer known to produce clear information? And is the work in a sector where the business has genuine productivity data?
Two of those answers going the wrong way is usually enough to decline politely. The alternative is a pipeline full of bids that consume the estimating capacity needed for the work that would have been won.
An extension tender, contract sum around 120,000, twelve weeks, with subcontract packages for groundworks, steel, electrics, plumbing and plaster.
The arithmetic check that catches most errors: the preliminaries should be 8 to 15 percent, labour should be 35 to 50 percent of the total depending on trade mix, and material plus plant plus subcontract should account for the rest. If a percentage is wildly out, there is an error somewhere rather than a clever bid.
Every estimate has a final half hour when the number goes from a working file into the tender return. Four checks in that half hour are worth more than four hours of estimating.
The scope check. Read your own summary and ask, for every line, whether it is genuinely included and genuinely priced. The gaps are usually in the small packages: making good, decoration, temporary services, waste.
The addition check. Add the summary in a different order, or in a different tool, from the one used to build it. Extension errors survive every review that re-reads the same lines.
The percentage check. Preliminaries, labour and material should each land in a plausible band for the work type. An outlier is an error far more often than it is a competitive advantage.
The assumption check. Read back every assumption you have written and confirm each one is still true of the documents you are pricing. Assumptions written at the start of an estimate have a habit of becoming false by the end of it.
A tender file is a working document for the next two years, not a submission artefact.
Keep the takeoff with its dimensions and its source drawing revision. Keep the labour and material build up behind each rate. Keep every subcontractor quote with its date, its validity and its exclusions. Keep the programme the preliminaries were priced against.
When a valuation is disputed in month four, the only defence is a file showing what was priced and what was assumed. Contractors who lose variation arguments usually lose them because they cannot demonstrate the original basis, not because they were wrong.
Post tender negotiation often asks for a reduction. A reduction with no change in scope is a reduction in margin, and it should be recognised as such rather than disguised as value engineering.
The useful response is an itemised alternative: what can be removed or changed, and what it saves. A client who is offered a genuine choice usually takes one. A client who is told yes to everything discovers during the build that something has quietly gone missing.
If the tender allows a meeting, use it. Two questions are worth more than an hour of reading documents.
What is the budget, not to negotiate against, but to know whether the design fits it. And what is the driver: cost, programme, quality, or a funding deadline. The answers change how the bid should be shaped, and sometimes they reveal that the design cannot be built for the money at all.
Saying that last thing before submission loses a tender. Saying it in month two of a contract loses the contract, the margin, and the relationship.
How do I price a tender quickly? From the largest items first, then preliminaries against the programme, then risk and margin. Small items matter, but they do not decide whether the bid is viable.
What percentage is preliminaries in a tender? 8 to 15 percent on domestic work, up to 20 percent on longer or constrained commercial work.
Should I include a contingency? Only when the contract allows it and the work is genuinely unknown. Otherwise name a risk allowance.
How do I handle a risk I cannot quantify? Exclude it in writing, with the reason stated, or price it as an allowance and name it.
Why did a low bid lose money? Almost always a scope gap or an accepted programme that could not be delivered, not an arithmetic error.
Can I qualify a tender after submitting? Not effectively. Qualifications belong in the return, in the place the tender documents provide for them.
The FRELUX estimator builds a bid in layers, direct cost, preliminaries, risk, overhead and margin, and keeps the arithmetic checkable so a bid can be reviewed before it is submitted.