Understanding Construction Tenders — How to Compare Like-for-Like

So folks, let me tell you about a situation I see more often than I should.

Three tenders come back. The homeowner looks at the numbers. One is €180,000. One is €210,000. One is €240,000.

And the homeowner picks the €180,000 one.

I understand why. The gap is significant. The builder seems fine. The references check out. And nobody wants to spend €60,000 more than they have to.

But here is the thing. Those three tenders are almost certainly not pricing the same job. And when you pick the cheapest one without understanding why it is the cheapest, you are not saving €60,000. You are deferring it — into variations, into disputes, into a build that slowly stops resembling what you thought you were getting.

The cheapest tender is nearly always the most expensive tender by the time the job is done. I have seen that happen on residential projects right across Dublin and Ireland more times than I can count.

That is what this piece is about. How to read a tender properly. How to compare like-for-like. And how to make a decision you will not regret six months into the build.

Why three tenders are rarely three prices for the same job

When you send drawings and a spec out to three builders and ask them to price the job, you are not — despite appearances — asking them to price the same thing.

Each builder reads the drawings differently. Each one makes different assumptions about what is and is not included. Each one prices risk differently. And each one has a different view of what a provisional sum should cover, what a prime cost item should allow, and where they can be competitive and where they cannot.

The result is three documents that look comparable but are not. The lowest price is often the lowest because the builder has excluded something, assumed something, or priced a provisional sum at a level that cannot realistically deliver what you need.

This is not dishonesty. It is how tendering works when the spec is not tight enough to force genuine like-for-like comparison. And the homeowner — who has never read a tender before — has no way of knowing which number is real and which is optimistic.

That is the gap I close.

What to look at before you look at the number

The first thing I do when three tenders land on my desk is not look at the totals. I look at what each builder has included — and what they have left out.

Provisional sums. A provisional sum is an allowance for an item that has not yet been fully designed or specified. Every tender will have them. The question is: are they realistic? A provisional sum of €5,000 for kitchen fittings on a mid-range Dublin renovation is not realistic. A provisional sum of €5,000 for a drainage investigation might be entirely reasonable.

Prime cost sums. A prime cost sum — or PC sum — is an allowance for a specific material or product that has not yet been selected. Floor tiles. Sanitaryware. Kitchen units. These are the items where the range between budget and high-end is enormous. And they are where the surprises hide. I have seen PC sums on tenders that were half of what the homeowner's actual selection cost. The builder was not lying. The allowance was just too low.

Exclusions. What has the builder explicitly excluded from his price? Every tender should have an exclusions list. If it does not, that is itself a concern. Read it carefully. Groundworks, services connections, making good after trades — these are the items that are most commonly excluded and most commonly forgotten.

Qualifications. Has the builder added qualifications to his price? Conditions that apply to his tender? These matter enormously and are often buried at the back of the document.

The comparison sheet

Once I have read all three tenders properly, I build a comparison sheet. Not a sheet that compares the totals — a sheet that compares the jobs.

Each line item is extracted from all three tenders and placed side by side. Provisional sums are normalised — if one builder has allowed €8,000 for kitchen fittings and another has allowed €20,000, I note that difference and what it means for the final account. PC sums are flagged where the allowances diverge significantly. Exclusions are listed.

By the time that sheet is finished, you can see the three tenders for what they actually are. Not three prices. Three different interpretations of the same job. And the decision about which builder to appoint becomes a much clearer one.

In my experience, the builder who wins on a properly compared tender sheet is rarely the one with the lowest headline number. Usually it is the one who has read the drawings properly, priced the spec honestly, and made realistic allowances for the items that are still to be decided.

That builder is more likely to finish. And finishing is the whole point.

Win-win procurement — why I don't chase the cheapest tender

I want to say something about the way I approach tender selection, because I think it is different from how a lot of people approach it.

My job is not to get the lowest price. My job is to get the fairest price from the builder most likely to deliver.

A builder who wins a tender at a price he cannot make work will be under financial pressure from week one. And a builder under financial pressure loses creativity, loses resourcefulness, and loses the ability to do good work. I have seen it happen. The project suffers. The homeowner suffers. And the builder suffers too.

Win-win. That is the only way I work. A price that is fair to the homeowner and fair to the builder is the price most likely to result in a project that finishes well. And a project that finishes well — on time, on budget, to the agreed standard — is worth more than any saving on the tender price.

Anyway, that is my way of saying: send me the three tenders before you make a decision. I will compare them properly and tell you which one is real.

If you want to understand the different procurement routes available before you even get to tender stage, I've covered that separately.

What happens next

If you have tenders on your desk right now — or if you are about to go to tender on a project in Dublin or anywhere in Ireland — here is what I suggest.

First, make sure your spec is tight before the tenders go out. A vague spec produces incomparable tenders. A tight spec produces tenders you can actually compare.

Second, get at least three prices. Two is not enough to identify an outlier. Four is fine but rarely necessary.

Third, send me the tenders before you decide. I will prepare a comparison sheet, identify the gaps, and give you a clear picture of what each builder is actually pricing.

The decision is always yours. But it should be an informed one.

Send me the three tenders before you make a decision. I'll compare them properly and tell you which one is real.