Subcontract and supply enquiries in the tender process of contractors

Here is the abstract of one of my forthcoming papers in Construction Management and Economics journal.

Samuel Laryea
School of Construction Management and Engineering, University of Reading, UK

In the tender process, contractors often rely on subcontract and supply enquiries to calculate their bid prices. However, this integral part of the bidding process is not empirically articulated in the literature. 30+ published materials on the tendering process of contractors that talk about enquiries were reviewed and found to be based mainly on experiential knowledge rather than systematic evidence. The empirical research here helps to describe enquiries precisely, improve it in practice, and have some basis to support it in theory. Using a live participant observation case study approach, the whole tender process was shadowed in the offices of two of the top 20 UK civil engineering construction firms. This helped to investigate fifteen research questions on how contractors enquire and obtain prices from subcontractors and suppliers. Forty-three subcontract enquiries and eighteen supply enquiries were made across two different projects with average value of £7m. An average of fifteen subcontract packages and seven supply packages was involved. Thus, 2-3 subcontractors or suppliers were invited to bid in each package. All enquiries were derived by the Estimator, with occasional involvement of three other personnel. Most subcontract prices were received in an average of fourteen working days; and supply prices took five days. The findings shows ten main activities involved in processing enquiries and their durations, as well as wasteful practices associated with enquiries. Contractors should limit their enquiry invitations to a maximum of three per package, and optimize the waiting time for quotations in order to improve cost efficiency.

Keywords: case study, enquiries, subcontractors, suppliers, UK