The period between receiving builder tenders and signing a contract is short, but the decisions made in it shape the entire project. Once the contract is executed, the tender price becomes the contract sum, and everything the tender missed, excluded or understated becomes tomorrow’s variation. A tender review by a quantity surveyor, sometimes called a contractor tender analysis, is an independent check carried out in that window, before signing. Its purpose is to establish what each tender actually covers and whether the price is one the project can be delivered for. This article explains how the review works and what it typically finds.
Why the lowest tender is not automatically the best
Tenders for the same project often differ by 10 to 20 per cent or more, and the difference is rarely explained by efficiency alone. A lower price may reflect a builder who genuinely wants the work and has priced it sharply. It may equally reflect missed scope, understated provisional sums, thin preliminaries or a program that cannot be achieved. None of this is visible from the tender total; it only becomes visible when the tenders are taken apart and the builder quotes are compared on a common basis.
The commercial risk runs in one direction. A builder who discovers mid-project that the tender was too low has limited options: claim aggressively on variations, cut quality, slow down, or in the worst cases become insolvent. Each of those outcomes costs the owner more than the difference between the lowest tender and the next one. The purpose of a tender review is to identify that risk before the contract locks it in.
What the review covers
A quantity surveyor reviewing tenders works from the same drawings and specification the builders priced, which allows each tender to be tested against the documented scope rather than against the other tenders alone. The main checks are summarised below.
| Review area | What the QS is checking |
| Scope coverage | Whether each tender prices the full documented scope, and where items have been missed, excluded or qualified |
| Normalisation | Adjusting the tenders onto a common basis so that inclusions, exclusions and assumptions are compared like for like |
| Provisional and prime cost sums | Whether allowances for undefined scope are realistic, since understated allowances resurface later as variations |
| Preliminaries | Whether supervision, site establishment and other time-related costs are adequate for the program tendered |
| Rates and pricing levels | Whether trade pricing is consistent with current market rates, and where individual rates are unusually high or low |
| Program | Whether the construction period tendered is achievable, since an unrealistic program understates the true cost |
| Qualifications and departures | The contractual effect of each tender’s qualifications, and what they transfer back to the owner as risk |
The output is a tender comparison report: each tender restated on a common basis, the true gap between them quantified, and the risks in each identified. In many cases the ranking of the tenders changes once they are normalised, because the cheapest tender as submitted is not always the cheapest tender once its exclusions and allowances are priced back in.
What the review commonly finds
Understated allowances
Provisional sums for items such as excavation in rock, services connections or finishes selections are a common place for a tender to be quietly thinned. An allowance set at half its realistic value reduces the tender total today and produces a variation of the difference later, once the actual cost is known. The review tests each allowance against what the item is likely to cost.
Scope gaps between trades
Items that fall between trade packages, such as fire-stopping, flashings or builder’s work in connection with services, are frequently missed by one tenderer and included by another. Identifying these gaps explains part of the price difference and shows where variations would emerge.
Qualifications that move risk
A tender qualified as excluding latent conditions, or making the owner responsible for design coordination, may carry a materially different risk profile from a cleaner tender at a higher price. The review puts a value on those differences so they can be weighed properly, and flags matters that should be resolved in the contract before execution.
Where the review fits in the project
A tender review sits naturally between tender close and contract execution. Its findings feed directly into the negotiation: allowances to be corrected, exclusions to be priced or withdrawn, and qualifications to be resolved before the contract sum is fixed. For funded projects there is a further benefit. The lender’s quantity surveyor will test the contract sum at prefunding stage. A contract that has already been through an independent tender review is far less likely to be assessed as underfunded when the loan is being finalised.
The review is documentation-based, working from the tender submissions, drawings and specification, so it can be completed for projects anywhere without site attendance, and typically within the tender validity period.
This is general information and not legal or financial advice. Contractual matters arising from tender qualifications and departures should be confirmed with appropriate legal advisers before a contract is executed.
Need an independent tender review before you sign? Section 94 can help.
Frequently asked questions / People Also Ask
When should a tender review be done?
Between tender close and contract signing, while the findings can still influence the negotiation. Reviewing tenders after the contract is executed can explain problems but can no longer prevent them.
How many tenders should be reviewed?
Ideally all conforming tenders received, since the comparison between them is where much of the insight comes from. Where only one tender has been obtained, the review instead tests that single price against measured quantities and current market rates.
What does it mean to normalise a tender?
Normalising means adjusting each tender onto the same basis: adding back priced exclusions, aligning allowances, and accounting for differing assumptions, so the totals can be compared like for like. The normalised comparison often ranks the tenders differently from the submitted totals.
Can a tender review be used to negotiate with the builder?
Yes. The report identifies the specific allowances, exclusions and rates that need to be addressed, which gives the negotiation a factual basis. Builders generally respond better to a measured query about a specific allowance than to a general request to sharpen the price.
Is a tender review worth it on a smaller project?
The review fee is typically a very small percentage of the contract sum, while the pricing risks it identifies are commonly measured in whole percentage points. The smaller the project’s margin for error, the stronger the case for checking the price before it becomes a contract sum.