Running a Construction Tender in Saudi Arabia, Stage by Stage

How to take a completed design to market and come back with comparable prices: shortlisting, documents, queries, returns and the analysis that follows.

A tender is a controlled experiment: several contractors price the same building under the same conditions so that the differences between them mean something. Most of the work is done before anything is sent out, in the documents and the shortlist. This roadmap sets out the stages, and the discipline that keeps the returns comparable when they arrive.

Before stage one

Do not go to market until the design is complete enough to price. A tender based on an unfinished set produces bids that differ because each bidder guessed differently, and no amount of analysis afterwards recovers the comparison you lost. The other precondition is that you know how you will decide, because criteria invented after the bids arrive tend to favour whichever bid you already liked.

• A complete tender set: drawings, specification, bill or schedule of works, and preliminaries.
• A pre-tender estimate reconciled against the budget and the appraisal.
• A decision on the contract form and the payment mechanism, reviewed by a licensed adviser.
• Written evaluation criteria and their weightings, agreed before documents are issued.
• A shortlist of contractors verified for eligibility and capacity.

Stage 1: Build and verify the shortlist

Select three to five contractors that have delivered your building type at your scale, and verify classification and eligibility for work of this kind with the relevant authority rather than relying on a presentation. Then check capacity: current workload, the team they would assign and their financial standing. A bidder you would not award to should not be in the tender.

• Deliverable: A verified shortlist with evidence of eligibility, comparable projects and current capacity.
• Owner: The development manager, approved by the owner.
• Approval gate: You would be content to award to any bidder on the list.

Stage 2: Issue identical documents to everybody

Send the same package, on the same day, with the same return date, and record what was issued to whom. The package should include the drawings register, the specification, the pricing document, the preliminaries with site constraints, the proposed contract conditions and the information you are providing such as the survey and the ground report.

• Deliverable: A tender issue record listing the documents and the recipients.
• Owner: The cost consultant or development manager.
• Approval gate: Every bidder holds an identical set and knows the return date and format.

Stage 3: Hold a site visit and manage queries

Arrange a visit so bidders can see the access, the neighbours and the constraints for themselves. Collect queries in writing, and issue every answer to every bidder at once as a numbered addendum. Answering one bidder privately destroys the comparison and creates an argument about what was known at tender.

• Deliverable: Numbered addenda issued to all bidders, with a query log.
• Owner: The cost consultant.
• Approval gate: No bidder holds information that the others do not.

Stage 4: Require a structured return

Specify the return format: priced pricing document, preliminaries split into fixed and monthly elements, overhead and profit identified, a programme, the proposed team, subcontract packages named where they are significant, and a list of assumptions, qualifications and exclusions. The last item is what makes analysis possible.

• Deliverable: A stated return format with a checklist bidders must complete.
• Owner: The cost consultant.
• Approval gate: Each return contains a list of its own assumptions and exclusions.

Stage 5: Open and check arithmetic

Open returns together, record what was received, and check each bid for arithmetical and extension errors before any comparison. Errors are common and how they are dealt with should follow a rule you set in advance, not a judgement made after you see who is cheapest.

• Deliverable: A bid opening record and an arithmetic check note for each return.
• Owner: The cost consultant.
• Approval gate: Every return has been checked and any error handled under the stated rule.

Stage 6: Normalise the bids

Adjust every bid onto the same basis: add omitted scope, price the qualifications and exclusions, convert programme differences into owner cost, and allow for provisional sum exposure. The output is a comparison table where the totals mean the same thing, which is usually a different ranking from the raw one.

• Deliverable: A normalisation table showing each adjustment and its source.
• Owner: The cost consultant, reviewed by the development manager.
• Approval gate: The ranking is based on adjusted figures, not on submitted totals.

Stage 7: Interview and test the delivery plan

Meet the two strongest bidders with the people who would actually run the job. Test the programme logic, the resourcing, the procurement plan for long lead items and how they would handle the specific difficulties of your site. This is where you learn whether the price is deliverable.

• Deliverable: Interview notes with the proposed team, programme logic and resourcing recorded.
• Owner: The owner with the development manager.
• Approval gate: You have met the site manager who would be on your project.

Stage 8: Recommend and document the decision

Write the recommendation against the criteria you set at the start, showing price, adjusted price, programme, capacity and risk. Documenting it protects you with lenders and partners and forces the reasoning into the open. Then move to award with the contract, bonds and insurances prepared rather than left for afterwards.

• Deliverable: A tender report with the recommendation, the scores and the adjusted comparison.
• Owner: The development manager, addressed to the owner.
• Approval gate: The recommendation can be explained to a third party in one page.

Handovers between stages

The handover from design to tender is the one that decides whether the process is worth running: an incomplete set produces incomparable bids. The second is from tender analysis into the contract, where the winning bid assumptions, exclusions and programme must be carried into the contract documents. Assumptions accepted in the tender report and never written into the contract are the classic source of a dispute in month three.

How you know it is finished

The tender is complete when you hold a documented recommendation, an adjusted comparison, an interview record and a contract that reflects the accepted bid including its qualifications. If any accepted assumption is not in the contract, you have not finished tendering, you have merely stopped, and the gap will be priced later by the party that noticed it.

Domira designs, builds and manages projects across Saudi Arabia for owners who are based abroad: land appraisal, feasibility, design, construction, handover and asset management under one accountable contract. Send us the plot or the brief and Domira will put the numbers in front of you before you commit.