Builder Tender Evaluation Template
A structured framework for evaluating construction tenders objectively. Score builders on price, program, capability, risk, and track record.
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Why You Need a Structured Tender Evaluation
Selecting a builder is one of the highest-stakes decisions your board will make. The cheapest tender is not always the best value. Without a structured evaluation process, boards risk choosing a builder based on gut feel, personal relationships, or price alone — and paying for it later in delays, variations, and disputes.
This template gives your board an objective, defensible framework for comparing tenders across the criteria that actually matter: price, program, methodology, capability, risk management, and track record.
The Tender Evaluation Process
Follow these seven steps to run a transparent, defensible evaluation process.
- 1Establish evaluation criteria and weightings (documented, approved by board before tenders received)
- 2Appoint tender evaluation panel (project manager, quantity surveyor, board representative)
- 3Receive tenders from shortlisted builders (typically 4-6 builders)
- 4Evaluate each tender against established criteria
- 5Score and rank all submissions
- 6Present recommendation to board with full scoring rationale
- 7Negotiate contract terms with recommended builder
Recommended Weightings
These weightings are typical for major club projects ($10M+). Adjust based on your project's specific priorities — but price should never be the only factor.
| Criterion | Weighting | Score Range |
|---|---|---|
Price | 35-40% | 1-10 |
Program | 15-20% | 1-10 |
Capability | 15-20% | 1-10 |
Risk Management | 15-20% | 1-10 |
References | 5-10% | 1-10 |
Each criterion is scored 1-10 by the evaluation panel. The weighted scores are combined to produce an overall tender score out of 10.
1. Price Assessment (35-40%)
Price is the most significant factor, but it must be assessed in context. A bid that is significantly below market may indicate underbidding, financial stress, or scope gaps — which often leads to aggressive variation claims during construction.
Lump Sum Price Competitiveness
Compare the lump sum bid against an independent QS assessment and market benchmarks.
- Within 5% of market estimate: 10/10
- 5-10% below market: 9/10
- 5-10% above market: 6/10
- More than 10% above market: 3/10
- More than 15% below market (risky): 2/10 — may indicate underbidding
Key question: Is this price realistic for the scope? Can the builder remain financially viable at this price?
Provisional Sums Justification
Provisional sums are estimates for work that cannot be fully defined at tender stage. They should be itemised, adequately scoped, and not excessive.
Typical provisional sum categories:
- Site conditions (geotechnical, utilities, contamination): 5-10% of contract
- Variations/design development: 3-5% of contract
- Contingency: 5-8% of contract
Score 9/10 for well-justified, detailed breakdowns. Score 2/10 for excessive provisional sums that shift risk to the club.
Preliminaries Breakdown
Preliminaries cover site management, temporary works, and administration. For a $10-15M project, expect preliminaries of 8-15% of contract value. They should be transparent and itemised.
Payment Terms
Look for monthly progress payments tied to certified work, with 10% retention. Be wary of builders requesting significant upfront payments or unfavourable payment structures.
Price sub-weighting formula:
(Lump sum x 40%) + (Provisional sums x 30%) + (Preliminaries x 20%) + (Payment terms x 10%)
2. Program Assessment (15-20%)
The construction program is not just about speed. A realistic program with contingency built in is far more valuable than an optimistic timeline that slips within the first month.
Schedule Realism
Is the programmed completion date realistic? Does it include weather allowances, coordination float, and contingency?
- Program matches or beats board target: 9/10
- Program 4-8 weeks later than target: 7/10
- Program 8-16 weeks later: 5/10
- Program significantly exceeds tolerance: 2/10
Staging and Phasing Methodology
For multi-stage projects: Is the phasing strategy well-developed? Is operational continuity maintained? Has the builder provided a temporary facilities strategy?
Critical Path and Key Milestones
Does the builder identify critical path activities? Are key milestones scheduled with appropriate buffers? Score 9/10 for clear critical path identification with buffered milestones; 3/10 if the critical path is not explicitly identified.
Schedule Risk Management
Has the builder included a risk register in their submission? Are mitigation strategies identified for schedule risks? Score 8/10 for a risk register with mitigation strategies; 2/10 if no risk management is evident.
Long-Lead Item Procurement
For critical items such as gaming machines, lifts, HVAC systems, and kitchen equipment: has the builder provided a detailed procurement schedule with early ordering commitments?
Program sub-weighting formula:
(Realism x 30%) + (Staging x 20%) + (Critical path x 20%) + (Risk mgmt x 15%) + (Long-lead procurement x 15%)
3. Capability Assessment (15-20%)
You are not just hiring a company — you are hiring a team. The project manager, site manager, and supervisors who will actually run your project matter more than the company name on the letterhead.
Project Manager Experience
Does the proposed PM have relevant experience with club/hospitality projects of similar scale and complexity?
- 10+ years experience with multiple major club projects: 9/10
- 5-10 years experience with some club projects: 7/10
- Junior PM or limited club experience: 4/10
- No relevant experience: 2/10
Ask: Will this PM remain on your project for its full duration? Are they supported by an adequate team?
Site Management Team
Is there a full-time site manager with hospitality/club experience? Is the supervision team adequately resourced for the scale of works?
Relevant Project Experience
Look for completed major club projects ($10M+) with complex staging, hospitality/gaming venue projects, and multi-trade coordination on occupied premises.
- 3+ major club/hospitality projects successfully completed: 9/10
- 1-2 major club projects completed: 7/10
- Limited club experience, strong general commercial: 5/10
- No club/hospitality experience: 2/10
Current Workload and Capacity
Is your project the builder's primary focus, or are they over-committed? A builder running five projects simultaneously will not give yours the attention it needs.
Team Continuity Commitment
Does the builder commit key team members for the full project duration? Is there a documented replacement protocol if key staff depart?
Capability sub-weighting formula:
(PM experience x 25%) + (Site management x 20%) + (Project experience x 30%) + (Current workload x 15%) + (Team continuity x 10%)
4. Risk Assessment (15-20%)
How risk is allocated in the contract determines who pays when things go wrong. The right contract structure protects the club from cost blowouts while keeping the builder incentivised to deliver.
Contract Type and Risk Allocation
A fixed-price contract with a clear variation procedure scores 9/10. A cost-plus contract (cost reimbursement plus margin) scores only 5/10 — the builder has limited incentive to control costs, and the club bears most of the risk.
Variation Procedure and Dispute Resolution
Is there a detailed variation procedure with agreed rate schedules? How are disputes resolved? A contract that is silent on variation pricing is a dispute waiting to happen.
Insurance and Bank Guarantees
Expect full insurance coverage: professional indemnity, public liability, and contractor all-risks. Bank guarantee should be 5-10% of contract value.
- Full coverage + 10% bank guarantee: 9/10
- Adequate insurance + 5-8% guarantee: 8/10
- Insurance gaps or inadequate guarantee: 4/10
Defects Liability and Rectification
Standard is a 12-month defects liability period with a 10% bond and a clear rectification timeline (14-28 days). A defects liability period shorter than 12 months or no bond at all is a red flag.
Liquidated Damages for Delay
A liquidated damages clause ($X per week of delay) gives the builder a financial incentive to complete on time. Without it, delays have no contractual consequence. Score 9/10 for a clear LD clause; 2/10 if there is no financial penalty for delay.
Risk sub-weighting formula:
(Contract type x 20%) + (Variation procedure x 20%) + (Insurance x 20%) + (Defects liability x 20%) + (Payment terms x 10%) + (Liquidated damages x 10%)
5. References and Track Record (5-10%)
Past performance is the best predictor of future performance. Do not just accept a list of references — call them, and ask specific questions about delivery, quality, and how disputes were handled.
Reference Projects
Contact references from similar projects. Were they completed on time and on budget? Were quality outcomes satisfactory? Score 9/10 for three or more strong references; 4/10 for limited references or concerns raised.
Defect and Claims History
Has the builder had significant defect issues or claims on past projects? Minimal defects and no major claims scores 9/10. A history of defect issues or claims scores 3/10.
Financial Stability
Check ASIC records, credit rating, and bank references. Are audited financials available? Is the balance sheet strong with positive cash flow? Financial concerns — negative cash flow, high debt — score 3/10.
Safety and Compliance Record
Does the builder have a strong safety record with regular audits? Safety concerns or compliance issues are a serious red flag. Score 9/10 for an excellent record with industry recognition.
References sub-weighting formula:
(References x 40%) + (Defects/claims x 30%) + (Financial stability x 20%) + (Safety record x 10%)
Overall Tender Scoring Example
Combine the weighted category scores to produce a single overall tender score. Here is an example for a $12M club project:
| Criterion | Weighting | Score | Weighted |
|---|---|---|---|
| Price | 35% | 7.7 | 2.7 |
| Program | 20% | 7.4 | 1.5 |
| Capability | 20% | 7.6 | 1.5 |
| Risk Management | 15% | 8.2 | 1.2 |
| References | 10% | 8.1 | 0.8 |
| TOTAL | 100% | 7.7/10 |
What to Include in the Board Report
Your tender evaluation report is the document the board will use to approve the builder. It must be comprehensive, transparent, and defensible.
Tender Summary
Number of tenders received, pricing range (low to high), schedule range, and key variances identified.
Evaluation Matrix
Full scoring for each builder on each criterion. Rankings with overall scores (e.g., Tender 1: 7.9/10, Tender 2: 7.5/10).
Recommendation
Recommended builder with justification: competitive price, realistic schedule, proven track record, strong risk management.
Tender Risk Analysis
Concerns identified for each builder (e.g., limited club experience, aggressive schedule) and mitigation if recommended builder is selected.
Contract Negotiation Items
Any contract terms to be negotiated before execution. Do not sign until these are resolved.
Board Approval Resolution
Board approves preferred builder conditional on contract finalisation. PM authorised to negotiate within pre-approved parameters.
Red Flags to Watch For
Any of these should trigger further investigation before proceeding. Some are deal-breakers.
Unrealistic Schedule
Program significantly faster than market benchmark. Indicates inadequate contingency and aggressive assumptions.
Unrealistic Price
Bid significantly below market. May indicate underbidding, potential financial stress, or quality risk.
Vague Methodology
Generic approach without project-specific detail. Indicates insufficient planning.
Inadequate Insurance
Professional indemnity below $10M or public liability below $20M. Risk transfer is inadequate.
No Defects Liability Bond
Builder unwilling to provide defects security. This is a serious red flag.
Excessive Provisional Sums
More than 10% of contract value. The builder is shifting risk to the club and the final cost is uncertain.
No Variation Procedure
Contract silent on how variations will be priced. This is a dispute waiting to happen.
Team Turnover Risk
Key personnel not committed for the project duration. No replacement protocol documented.
Financial Concerns
Builder financials unavailable or showing financial distress. Check ASIC records and credit ratings.
Poor References
References reluctant to recommend, or mentioning quality and schedule issues on past projects.
Tender Evaluation Best Practices
Follow these principles to ensure your evaluation is fair, transparent, and defensible.
Transparency
Criteria and weightings established before tenders are received — not adjusted after to favour a preferred builder.
Independence
Evaluation panel is independent with no conflicts of interest. PM is not related to the preferred builder.
Documentation
All scoring documented with notes justifying each score. Full audit trail for board review.
Like-for-Like
Tenders compared on the same scope, same contract terms. Apples to apples.
Risk-Based
Lowest price does not automatically win if there are significant risks: underbidding, inexperienced team, inadequate insurance.
Due Diligence
ASIC search, credit check, and bank references on the recommended builder before contract execution.
Alternative Tender Approaches
Different procurement methods suit different project types. Here are the four most common approaches for club projects.
Design and Construct (D&C)
Builder designs and constructs with a fixed price. Single point of responsibility and accountability, but less control over design.
Traditional (Design-Bid-Build)
Club designs via architect, then tenders to builders. Best design control and competitive tendering, but longer timeline.
Staged Tender
Tender based on concept design. Builder involved in detailed design. Enables early construction start but with less price certainty.
Guaranteed Maximum Price (GMP)
Contractor proposes budget and schedule. Shares cost savings if delivered under budget. Complex contract but good cost incentive.
Recommendation for most club projects:
Traditional design-bid-build (club designs via architect, competitive tender to 4-6 qualified builders, fixed-price contract) provides the best balance of design control, cost certainty, and competitive tendering.
Download as PDF
Enter your details to download the complete Builder Tender Evaluation Template as a printable PDF.
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