Firstly, before we tackle E-Tendering, it would be useful to know what Traditional tendering is. Essentially, the traditional way to tender for a construction project would be to manually manage all the functions related to procuring a supplier suitable for your project. It is heavily dependent on a lot of paperwork and phone calls. The process is complex and time-consuming which can easily lead to wasted costs and delays.
Electric tendering or E-Tendering for short, is one way in which the construction industry is trying to overcome this problem and the inherent cost of tendering.
E-tendering is a solution that helps to facilitate the complete tendering process. This includes the initial advertising and publicity of the requirement put out to tender all the way through to actually rewarding the contract to the winning bidder.
What are some of the thing’s E-Tendering can actually achieve?
- Well, It can kick start the tendering process – by including a suppler registration module where suppliers come to you rather than you needing to find them.
- It can automate the PQQ process – enabling the client to quickly and easily find a short-list of suitable suppliers.
- Helps to reduce the time-span of the tender cycle – As documents do not need to be physically sent back and forth and any responses and interactions can be dealt with in real-time.
- Automatically manage milestones and deadlines.
- And, reports can be easily generated that show valuable data on the bidders.
Despite these advantages and possible benefits, uptake of e-tendering up until 2010 has been fairly weak although over the last decade this has improved with further technological advancements, software and training.
Disadvantages of E-Tendering
If not implemented with a clear plan and pathway then E-Tendering could of course see certain drawbacks such as:
- Culture Shock within the organisation – As is the case with almost every digital transformation, adopting e-procurement solutions brings a culture shock and sometimes major resistance from certain members of staff and management levels. This is usually down to the perceived limitations of the software and reluctance to incorporate new processing models.
- Integration Challenges – Incomplete understanding of the goals and a lack of planning has the possibility to see significant implementation and functionality challenges to adopting the chosen software. This is particularly problematic as you require your suppliers to know how to use the software to submit their bids and upload information on your chosen e-tendering portal.
What is E-Auctioning?
We also just want to mention a type of E-Tendering called E-Auctioning. E-auctioning can be thought of in a similar way to the platform e-bay where the highest bidder wins. However, in construction, it is used in reverse where contractors compete for business in an online event by submitting the lowest bid they believe they can deliver the outlined works for. This is sometimes referred to as reverse auctioning.
In Summary
Some clients and organisations may find this appealing to achieve what they believe to be significant cost savings. However, we should all know by now, that in construction accepting the lowest bid is not always the best or most advisable option as so many other factors need to be considered. Let us know what you think of tendering construction projects in this way!
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