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So, you want to bid for government construction tenders but don’t know how to get started? This article will help you learn how to win more construction project bids for your business.
Every year, the government ministries and departments float thousands of construction projects for building constructions, pipelines, repair, roads, drainage work, and other civil projects. As a bidder, the important task is to prepare a compliant bid proposal that convinces the selectors that you are capable of delivering the outcome successfully.
You have to ensure that you quote a reasonable price bid, submit the right financial and technical eTendering documents, highlight all technical specifications, have the requisite experience, skills, and certifications required to win the construction tender, among other things. After all, you don’t just want to win the bid, but also earn profits for your business from it.
In the next section we share some tips to help you bid smartly on construction tenders in India to stand a chance at winning them. Let’s get started.
Tips to win tenders for construction projects in India
You need to have a comprehensive bidding strategy for construction projects, if you want to win them for your business. The government’s goal of becoming a US ₹5 trillion economy lines up several infrastructure development, housing, industrial corridor development, that requires a steady demand for construction projects.
Quite naturally, numerous construction tenders are announced on the CPP portal. And the secret to winning government construction contracts is to bid for the right ones, in time.
1. Find and apply to relevant construction tenders
This is no secret but the first and most important tip to increase your chances of winning a construction project tender is to find and apply for the ones relevant to your business.
Construction projects come with specific eligibility criteria, technical specifications, pre-qualification of contractors, work experience requirements, location details and more. Not all projects will be relevant to you. Nor will you be eligible for all. As a bidder, understand the scope of work and project requirements and apply for the ones relevant to your business.
Type of work: Road and bridge construction tender
Total tender value: ₹ 22 crore
Pre-qualification of contractor: Annual turnover for the last three years must be at least 40% of the total value of the current tender
This means that as a bidder, unless your annual turnover for the last three years exceeds ₹ 8.8 crore, you will not be considered eligible for the tender.
2. Understand project requirements for construction tender projects
The next key point to keep in mind when bidding for Indian construction projects is to understand the scope of work.
Read the tender notice document meticulously. All details and required information about the project will be mentioned in the works contract document. Check specifically for legal specifications, pre-qualification and work experience, payment terms, contract terms, tender fees/EMD etc. You should also check for risks involved to avoid last minute challenges. It is recommended that you run the construction tender document through your civil engineers and construction managers for expert advice.
For instance, railways tender projects come with specific requirements with reference to similar work experience, annual turnover of the company, equipment capabilities, etc. It makes little business sense to apply for a project that does not align with your business capabilities.
3. Assess risks and bid if relevant
If you want to win more construction bids, it’s important to assess the risks involved and write your bid proposal accordingly. Having awareness and clarity of the risks involved will help you to project timelines precisely, provide competitive quotes, and even mitigate the risks without impacting quality and contract SLAs.
Moreover, from a business perspective, it allows you to evaluate all factors and proceed with the bidding process only if the tender opportunity is lucrative.
This also puts you in a better position vis-a-vis competitors, as someone who is prepared. During the process of tender application evaluation, it is likely that these finer input details will help you stand out and appeal to the tender authorities. Remember, it is not always the lowest financial bidder who wins the contract – it’s the bidder who offers the most value-for-money.
4. Showcase your USPs in the tender application
Don’t miss out on any chance to highlight your main achievements, skills, and experience. A typical construction tender process evaluates your application in two stages – technical and financial. It is expected that during the technical evaluation process, you will be able to highlight professional achievements and work completion reports that go beyond the buyer’s/client’s expectations.
Remember, you can apply as a single contractor or even undertake subcontract projects (more suitable for MSMEs). So, even if you do not have a list of construction projects to showcase, ensure your bid proposal highlights the following:
- Years in business, nature of work, projects completed (Note: the government encourages emerging and MSME businesses to participate in government eTendering and there are special eligibility criteria and exemptions for them).
- List of related projects worked on with details on project value, duration, location, work done, etc. For example, if a highways bridge construction tender requires previous experience in completing at least one similar project in the last five years, then focus on this as this is key for winning the contract.
- Details on team size, skills and competence, technical knowledge, equipment capabilities, plant size, certifications acquired (e.g., having an ISO certificate can benefit eTender application), patents and awards (if any).
For those without previous experience, focus on your strengths, uniqueness, and why you will be the best choice for the construction tender.
Also, for new businesses, consider registering your business on the GeM portal as a seller. By listing your products and services on the portal, you can sell on the GeM portal for up to ₹25,000. Though this is not the same as tendering, it helps you build a strong client base, especially the government departments.
5. Be among the first to submit your tender bid
Another bidding strategies in construction is to be an early applicant. Every tender notice comes with an opening and closing date. And it is advisable to submit your bid proposal in advance, ahead of the closing date. Here’s why:
- You are not the only applicant. Competition is going to be intense. Considering that most applications will come in as the closing dates approach, being an early applicant allows the tender authority time to focus on your application and evaluate it properly.
- The construction tender process is carried out online (eTendering). This means that once the tender window closes, you cannot apply offline. Considering there can be last minute glitches or server overload, it’s advisable to submit your tender application in time.
- Every tender application requires specific document submissions, fees to be paid, receipts submitted etc. The more you delay, the higher the chances that you may miss out on important documents for construction tenders. Keep a tender response checklist handy to ensure that you don’t miss out on important documents and deadlines. You may alternatively prepare a construction tender checklist that caters to the specific requirements for construction tenders.
6. Quote reasonably but competitively
Your goal is to win tenders for construction projects – for which you have to quote intelligently so that it is profitable for your business. As such, when preparing your cost estimate, keep the following in mind:
- The tender quote is not an estimate – it’s the final cost that you agree upon. As such, all factors, including cost of material, labour, transportation, packaging, along with inflation, taxation and other related costs should be considered. You should also consider change in market dynamics and price trends. For instance, if the tender is for constructing a building, and steel TMT bars is a core raw material, learn about the price of steel in India (especially daily and historical prices) during calculation.
- Include a reasonable profit margin when calculating construction project costs. You should quote a price that is competitive and also profitable for your business. You may check details on previously awarded construction tenders to evaluate a fair price to quote. Re-check the details and if the final tender quote is not favourable enough, drop the idea of bidding for the project.
Remember, you will be spending time and money on preparing the tender bid. You will also need to submit requested tender fees (similar to a processing fee) and EMD as security. It is usually said that almost 0.5-1% of the tender value is spent on preparation of the tender bid. As such if the project is not profitable enough, consider applying for other construction project tenders that meet your business revenue goals.
7. Stand out with a winning tender proposal
Last but not the least, it’s your bid proposal that’s going to determine whether you lose or win the construction contract. Your bid proposal must be consistent, informative and specific to the requirements in the tender notice.
For instance, CPWD tenders come with specific requirements for work experience and financial soundness/health. If you are applying for CPWD tenders, ensure that you provide the relevant documents to be considered eligible.
In general, take note of the following:
- Ensure you fill in all details accurately. Your application will be disqualified if details are incorrect/false.
- Double-check the details added. Have another person review the document before submission.
- Include a subject matter expert in the team for filling in technical and financial bid requirements.
- Upload the documents in the required format e.g., PDF, Excel (for BoQ), PNG/JPEG, drawings and designs, graphs, tables or any other.
- Remember to pay the tender fees and EMD and submit the receipt as proof of submission.
- Click on the ‘Freeze’ button to submit your bid. Without it your application submission will not be completed.
No further changes can be made once the bid is submitted. As such, re-check before submission.
Note: Since even the basic construction tender process requires detailed documentation, submission of designs and drawings, certifications and more, many businesses are preferring to use online tender management systems to manage the e-Tendering process. Online tools help to prepare tender documents properly, store data on previous bid proposals, store frequently used documents for easy access and more.
How to win more construction bids?
We shared some tips to help you bid smartly on construction tenders in India. Your chances of winning a construction project tender are higher when its relevant to you. While some businesses choose to bid for most projects floated, a smart bidder knows it’s advisable to bid for relevant tenders only.
- Remember that you are not the only applicant. And even if you submit a well-documented tender proposal, your tender application might still get rejected. In such cases, don’t feel disheartened. Understand why your tender proposal was rejected and apply for the next suitable opportunity.
- Keep track of the number of projects you are applying for and how many you are winning. The bid-hit ratio will enable you to understand your strengths and areas of improvement.
- Before starting the tendering process discuss internally with your key team members on your current capabilities and ability to meet the project requirements. Invest your time and effort in tender requests that your team can fulfil.
Tender offers are awarded based on multiple parameters. By following these simple tips and best-practices for construction tender bids, it’s likely that you will be able to submit a competitive proposal and increase your chances of winning.