Negotiation of tender

FortunaMan

Generally would there be much room for negotiation once tenders have been received from builders? If so how much would be a normal reduction that you could hope to achieve? I was thinking maybe 1% or so. Surely this is common practice and builders almost expect it??

BryanF

Define reduction?

A builder has priced the job

They may suggest reductions in materials/finishes

You should be cautious to stray from drawings and specification

Fayre

I got them to come down 10% by playing them off each other. I do think though that if they give you a big reduction they just make it up in other ways e.g. by putting inferior materials into your house (which you don't realise)
Anyone that gave me a discount that discount came back to bite me in the ass! If I was going again I'd nearly trust more the one that says no, no discount this is the price for the spec you've asked for.

Dardania

savings can come from their bases rates, and from the spec of the job. You ideally want to get them to reduce their base rates, however the quid-pro-quo as Fayre says is they will reduce spec.

So if you want savings, suggest you ask them if there are any spec changes they could propose that would save you money - do it before entering into contract, as either way they're going to try reduce spec anyway when they're on site. And if you're not happy with the spec changes they propose before signing the contract, it's as well to deal with it now (e.g. insist that you won't change spec, and ask them will they stand over their tender)

Tefral

As a Quantity Surveyor who has worked on both Contracting and Client side, i would advise you not to do this.

You will get reduced spec materials to match up.

The Tender process inherently introduces competition and thats enough to keep the price keen if the builder wants it.

DOCARCH

Tefral wrote: »

As a Quantity Surveyor who has worked on both Contracting and Client side, i would advise you not to do this.

You will get reduced spec materials to match up.

The Tender process inherently introduces competition and thats enough to keep the price keen if the builder wants it.

+1

Fayre's post above is good. Whatever reduction/bargain you think you might be getting, at the outset, will bite back somewhere along the line....either inferior work/materials, or, additional claims for extras/variations.

bemak

If you want to reduce price why not consider if elements of the project can be omitted for now and picked up in a subsequent phase.

For example, if it was a house, maybe the sunroom could be omitted for now - just make an allowance for it so that it's easy to add it on after.

FortunaMan

Thanks for the feedback guys. We have two tenders very closely matched in price and was considering playing them off each other a little but maybe this is not the best route to go after all.

Rabbo

FortunaMan wrote: »

Thanks for the feedback guys. We have two tenders very closely matched in price and was considering playing them off each other a little but maybe this is not the best route to go after all.

If they're close to each other, it's best to try to establish who is the better contractor. Ask to see previous jobs, ask for references, enquire with others involved in building,etc. Don't play them off each other or you might get the poorer contractor. They'll also spend the job trying to claw back their losses on the variations or on reducing material quality

SeanHarty

Also look at what they've actually quoted you for, for example you may have pick a certain heat pump and added it to the tender but they've quoted for a different make which is similar.

Looking into there back ground is only good and asking to see what projects they've worked on before.

Don't play them off each other, as stated above the tender process is designed to bring the price down already.

EmmetF

FortunaMan wrote: »

Thanks for the feedback guys. We have two tenders very closely matched in price and was considering playing them off each other a little but maybe this is not the best route to go after all.

You can take comfort in knowing that you have at least gotten the most competitive price for your project. Seeing 2 prices come in very close usually means it's the correct price for the job.