Tender (construction)
A tender is the formal priced offer a builder submits against a documented scope, the step between estimate and contract that becomes a binding price.
Ask Chalkline about this →A tender in construction is the formal, priced offer a builder submits in response to a documented scope of work. It is the step between an estimate (the builder’s internal cost workup) and the contract (the binding agreement): the tender turns a costed estimate into a firm price the client can accept.
Tenders come in three forms:
- Open tender: advertised publicly, any qualified builder can bid. Common on government and larger commercial work.
- Selected (invited) tender: the client invites a shortlist of builders to price the same documents.
- Negotiated tender: the client deals with one builder directly and prices collaboratively, without competitive bidding.
A tender contains the priced offer against the scope, usually with a stated price basis (lump sum or schedule of rates), inclusions and exclusions, a validity period, and any qualifications. Every bidder prices off the same tender documents (drawings, specification, sometimes a bill of quantities) so the offers are comparable.
Why it matters: a tender is an offer in contract terms. Once the client accepts it you can be bound, so the exclusions, allowances and validity date carry real weight. Tender too low to win the job and the gap comes out of margin once you sign. Acceptance typically flows into a deposit and a signed contract.
Where design is involved, a builder may tender on a design that is later novated to them under a design-and-construct arrangement. Once the job is won, estimating software carries the tender pricing through into job costing.
Also known as: Bid, tender submission, priced offer.
Category: Process / Business.
Related
See also
References
- Deposit (residential contract) (Chalkline) (verified 2026-06-10)
- Novation (design) (Chalkline) (verified 2026-06-10)
Last updated: 2026-06-10. Verified: 2026-06-10. Quarterly review for currency.