The 7 Main Types of Tendering in Construction (Australia): How to Choose the Right Strategy for Your Project
- Danny Ghaebi
- Sep 17
- 5 min read
Tendering isn’t just about getting the lowest price, it’s how developers, builders, and councils reduce risk, protect quality, and keep programs on track. In Australia, most projects use a handful of proven tender approaches. Pick the wrong one and you can invite delays, variations, or a builder misfit. Pick the right one and you’ll set the whole project up for success.
This guide breaks down the 7 main types of tendering used locally, when to use them, and the trade-offs to expect.
Quick summary (for skimmers)
Open tendering → maximum competition, higher evaluation effort. Best for public projects.
Selective tendering → invite a shortlist you trust. Faster, better quality control.
Negotiated tendering → 1:1 with a single contractor for complex/urgent scopes.
Single-stage tender → fully documented, price once, appoint.
Two-stage / ECI → early contractor input, then fix the price. Great for complex builds.
Serial tendering → agree rates once, use across similar/replicated works.
Frameworks / panels → pre-approve multiple contractors and call off work quickly.
Rule of thumb: The more complex/uncertain the job, the more you’ll benefit from two-stage/ECI or negotiated approaches. The more standardised the scope, the better single-stage or selective will perform.
1) Open tendering
What it is: You publicly advertise the opportunity (RFT/RFP), any qualified contractor can submit a bid.
Pros
Strong competition → can sharpen pricing.
Transparent and fair (often required for government work).
Cons
More admin: many submissions to screen/level.
Risk of unqualified bids; prequalification/EOI recommended.
Best for
Public sector projects or private projects seeking a wide market test.
Standardised scopes with clear specs.
2) Selective tendering
What it is: You invite a shortlist of pre-qualified contractors based on track record, capability, and current workload.
Pros
Faster process, better quality control.
Lower risk of misfit contractor; easier bid levelling.
Cons
Less competition may lift prices slightly.
Risk of over-relying on the “usual suspects” if the list isn’t refreshed.
Best for
Private development, specialist trades, projects where delivery certainty matters.
3) Negotiated tendering
What it is: You negotiate directly with one contractor to agree price, program, prelims, and risk allocations.
Pros
Fastest path to mobilisation.
Suits bespoke/complex scopes and trusted partners.
Cons
No like-for-like price competition.
Needs robust cost transparency and benchmarking.
Best for
Complex refurbishments, live-environment works, or when continuity with an existing contractor adds value.
4) Single-stage tendering
What it is: The design is sufficiently complete to price; you run one pricing round, level bids, and appoint.
Pros
Clear, competitive pricing if documents are complete.
Variations risk is lower when scope is tight.
Cons
If drawings/specs are incomplete, claims risk rises.
Limited constructability input from builder pre-award.
Best for
Well-documented residential/mid-rise builds and repeatable typologies.
5) Two-stage / Early Contractor Involvement (ECI)
What it is: Stage 1 appoints a builder early on prelims & margins to provide constructability, staging, and procurement input; Stage 2 converts to a fixed price (GMP or lump sum) once design is settled.
Pros
De-risks buildability, coordinates services, and optimises program/procurement.
Fewer surprises and cleaner delivery.
Cons
Takes longer and costs more upfront to run Stage 1.
Requires disciplined cost planning and open-book behaviors.
Best for
Complex structures, tight sites, fast-track programs, premium finishes, or hybrid procurement (design+construct elements).
6) Serial tendering
What it is: You agree rates/mark-ups via a representative BoQ and then apply those rates across multiple similar projects (or stages) over time.
Pros
Speedy call-offs and predictable pricing.
Lower tendering overheads for both sides.
Cons
Less price tension on later jobs.
Only suits repeatable scopes (e.g., townhouse stages, minor works programs).
Best for
Staged estates, minor works packages, rollout programs.
7) Frameworks & panels
What it is: Establish a panel of pre-approved contractors. For each new package, you either direct-appoint or run a mini-competition among panel members.
Pros
Cuts procurement time dramatically.
Improves performance via ongoing KPI tracking.
Cons
Risk of “cosy” panels unless refreshed and performance-managed.
Initial setup takes effort (criteria, contracts, KPIs, governance).
Best for
Organisations with a frequent pipeline (developers, councils, universities, asset owners).
Public procurement in Australia (in brief)
Government-funded projects typically mandate open processes with prequalification (financials, safety, capability). Selection is often “value for money”—not just lowest price—balancing whole-of-life costs, environmental/social outcomes, and risk. Expect weighted criteria, published timetables, and audit-ready decisions.
Which tendering method should you use? Start with these questions
Scope clarity: Are documents 90–100% complete? If not, consider two-stage/ECI.
Complexity: Complex services, staging, or heritage constraints? ECI or negotiated helps.
Program pressure: Need to mobilise fast? Negotiated or panel call-off can win time.
Market conditions: In a hot market, selective with strong relationships may secure better resourcing.
Risk appetite: If you want fewer surprises, invest in early constructability + cost planning (ECI).
Pipeline: Multiple similar jobs? Serial or framework can save months.
Tender evaluation: beyond the headline price
Create a transparent, weighted matrix that considers:
Price: Lump sum/GMP, allowances, exclusions.
Program: Critical path, long-lead procurement, staging, prelims logic.
Team: Site manager & supervisor CVs, continuity, subcontractor bench.
Methodology: Buildability, safety (WHS), QA, waste & sustainability.
Commercials: Margin, prelims, rise-and-fall, PC/PS sums, risk allocation.
References & pipeline fit: Capacity to deliver your job now—not last year’s.
Pro tip: Always run a structured clarifications round and a risk workshop before award. Most costly disputes start as tiny assumptions left undocumented.
Typical tender timelines (indicative)
Approach | Prep & Issue | Tender Period | Evaluation | Award |
Open | 2–4 wks | 4–6 wks | 2–3 wks | 1–2 wks |
Selective (4–6 bidders) | 1–2 wks | 3–4 wks | 1–2 wks | 1 wk |
Two-stage / ECI (Stage 1) | 1–2 wks | 2–3 wks | 1–2 wks | Stage 1 award, then 4–10 wks to convert |
Negotiated | 1 wk | — | 1–2 wks | 1 wk |
Framework/Panel call-off | — | 1–2 wks (mini-comp) | 3–5 days | 3–5 days |
Note: durations vary by project size, documentation completeness, and internal approvals.
How OwnerDeveloper can help
We act as your developer’s representative/superintendent, running a fair, defensible process while protecting cost, time, and quality:
Tender strategy & market sounding
Prequalification and shortlist build
Bid documentation & scope gap analysis
Bid levelling, interviews, and reference checks
Open-book Stage-1 ECI and GMP conversion
Contract drafting and risk allocation
Post-award commercial management & variations control
👉 Book a free 30-minute consultation to identify the right tender pathway for your project and get a draft evaluation matrix you can use immediately.
FAQs
What’s the difference between single-stage and two-stage tendering?
Single-stage waits until documents are complete and prices once. Two-stage appoints a builder early to help de-risk design and procurement, then converts to a fixed price.
Is the lowest price the best value?
Not always. Consider whole-of-life costs, prelims credibility, program, capability, and risk transfers hidden in exclusions.
When should I use negotiated tendering?
When continuity, confidentiality, or complexity make competitive pricing less valuable than speed and certainty—provided you maintain open-book benchmarking.
How do I reduce variations risk?
Close documentation gaps, run coordinated services reviews, insist on detailed exclusions/assumptions, and use ECI for complex scopes.
Ready to choose the right tender strategy?
Book your free consult: 02 9987 1720 • hello@ownerdeveloper.com.au
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