Why competitive tendering doesn’t provide value to our clients

Competitive tendering for a builder is commonplace in the architecture and design industry, but we believe it offers little value and inflates prices in the home building market we operate in.

It takes a builder weeks, on top of their current jobs, to put together a tender submission at a cost of several thousand dollars. With an uncertain outcome this is a large expense to carry. But the builder doesn’t carry it, this cost is eventually passed through to the client. Selecting the right option from a list of tender submissions is a complex task too, where comparing apples with apples is a pipedream for a process where every builder prices projects in their own way. This complexity is time-consuming and a cost which the client ultimately bears.

On top of this, competitive tender responses lack the detail that’s important for our clients to clearly understand their budget requirements. Competitive tender responses provide only high level information with large amounts often added for contingencies. By contrast our preferred approach requires detailed estimates from our builders so that accurate comparisons can be made. In this way, our clients have a much clearer understanding of what their new home will cost and can avoid budget blow outs.

And finally, builders are often engaged after about 80% of an architect’s work has been done. By this stage, decisions have been made that have cost implications, but it’s only once the builder is onboard that costs can be properly understood. In Habitech’s process, builders are typically engaged much earlier, giving our clients greater cost surety.

At Habitech we take a different approach in working with the network of builders who build our projects. We take an open book approach to pricing and working with a builder to refine details to our client’s budget. This open book pricing approach allows us to work as a team with our clients and builders to refine our designs. This ensures our projects stay within our clients’ budgets as established in our cost control process.