How to Compare Building Contractors Beyond the Lowest Price
7 min read
Introduction
Selecting the right building contractor is one of the most important decisions in any development project.
While cost will always be a key consideration, the lowest tender is not necessarily the best value. A contractor that appears competitive at tender stage may ultimately cost significantly more through variations, delays, quality issues or contractual disputes.
The most successful developments are delivered by contractors who combine competitive pricing with the right experience, resources and commercial approach.
The Short Answer
A contractor should never be selected on price alone.
The most robust tender evaluation considers quality, programme, financial stability, relevant experience, procurement approach and commercial risk alongside cost.
A structured tender review can often identify risks that are not immediately obvious from the headline tender sum.
1. Compare Like-for-Like
Before comparing tender prices, ensure each contractor has priced exactly the same scope of works.
Review whether all contractors have received:
The same drawings
The same specification
The same Employer's Requirements
The same programme assumptions
The same tender clarifications
Differences in tender information often explain significant price variations.
2. Understand What's Included
A low tender may simply exclude work that other contractors have included.
Pay particular attention to:
Temporary works
Site establishment
Utility diversions
External works
Testing and commissioning
Design responsibility
Contractor's design portions
Understanding exactly what has been priced is often more important than comparing the total figure.
3. Review Qualifications and Exclusions
Almost every contractor submits qualifications alongside their tender.
These may include:
Design assumptions
Material substitutions
Programme assumptions
Scope exclusions
Provisional allowances
Qualifications should be carefully reviewed before making any appointment.
4. Assess Relevant Experience
Experience on similar projects can significantly reduce delivery risk.
Consider whether the contractor has experience with:
Similar project values
Comparable construction methods
Occupied sites
Residential developments
Mixed-use schemes
Complex logistics
Past performance is often one of the best indicators of future performance.
5. Consider Programme Realism
An ambitious programme can appear attractive but should always be challenged.
Ask whether:
Labour resources are realistic
Procurement periods are achievable
Design information will be available in time
Long-lead materials have been considered
A realistic programme often provides greater certainty than an optimistic one.
6. Review Financial Strength
A contractor's financial stability should form part of any appointment decision.
Consider reviewing:
Published accounts
Credit reports
Cash position
Current workload
Existing commitments
Financial resilience becomes particularly important on longer projects.
7. Look Beyond the Tender Sum
A contractor with a slightly higher tender may ultimately represent better value.
Factors influencing overall value include:
Quality
Programme certainty
Reduced variations
Strong management
Better communication
Lower commercial risk
Selecting the lowest tender without considering these factors can prove costly.
8. Carry Out a Structured Tender Evaluation
A formal tender evaluation helps compare contractors objectively.
Typical assessment criteria include:
Cost
Quality
Programme
Technical capability
Commercial qualifications
Financial standing
Relevant experience
Many clients use weighted scoring to support transparent decision-making.
Frequently Asked Questions
Should I always appoint the cheapest contractor?
Not necessarily. The lowest tender may represent the highest overall project risk if important items have been excluded or programme assumptions are unrealistic.
What should I look for besides price?
Relevant experience, financial stability, programme realism, tender qualifications, quality and commercial approach are all important considerations.
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Need Help Choosing Your Contractor?
Selecting a contractor is about far more than choosing the lowest price.
Mavora provides independent tender reviews, procurement advice and commercial assessments to help clients understand tender submissions, compare contractors objectively and make confident appointment decisions.
