Tendering in a Tight Market: What to Watch When You're Low on Resources

Lately, I’ve been approached by a number of construction businesses needing support with upcoming tenders.

They’re all facing the same challenge:

“We’ve lost senior staff. We can’t afford to replace them right now. But we still need to tender to stay afloat.”

While I’m glad to step in where I can, whether by reviewing contract documents, advising on pricing risk, or helping shape commercial strategies. However, I also know that there are many companies in our industry are navigating this challenge quietly, without sufficient support or capacity. Some are submitting tenders with less preparation than they would prefer; others are walking away from opportunities they would have previously pursued.

The current tendering landscape is more competitive and less forgiving than we’ve seen in years. In this week’s EM Fridays, I'll explore what this market means for construction businesses with lean teams and provide practical guidance for companies trying to deliver quality tenders without the full resources they once had.

1. The Market

   
   

Across New Zealand, the construction industry is seeing a tightening of project releases. While infrastructure and green energy investments continue, private sector demand is softening, especially in the residential and commercial sectors. Public sector procurement, meanwhile, has become more cautious, with some projects being paused or repackaged.

For contractors, this means more competition per tender. The days of being one of three invited are giving way to being one of eight, or eighteen. This increases bid costs and reduces win rates, making every opportunity more critical.

In this market, the clients are seeking certainty in the uncertain times, which means:

• Stricter compliance requirements

• Faster turnaround expectation

• More risk passed downstream

• More unbalanced contract clauses

and at the same time, contractors are bidding with thinner margins. There is less room for error, less tolerance for omissions, and greater risk exposure in almost every project.

And the worst part of all of that is that many construction businesses have lost senior estimators, quantity surveyors, and commercial managers, either through retirement, restructuring, or international migration. Salaries for senior hires have increased, but cashflow constraints make permanent recruitment a challenge.

In short, we’re pricing higher-risk work, in a more competitive environment, with fewer capable people to do the work. It sucks.

2. What can you do now

If your team is currently lean, especially on the commercial and estimating side, here are six core areas for you to focus on when responding to tenders.

2.1 Prioritise Contract Review Before Pricing

In a market like this, the contract is the job. Many pricing mistakes don’t come from arithmetic errors, they come from misunderstanding or overlooking:

• Liquidated damages

• Indemnity clauses

• Design responsibility allocations

• EoT conditions and variation triggers

• Hidden obligations under special conditions

  
  

Take the time, to review all contract documents upfront. If your internal team lacks experience with NZS 3910:2023, NZS 3916, or bespoke contract terms, consider asking for external assistance. A two-hour review could prevent a huge financial loss.

2.2 Document All Assumptions and Clarifications

If information is missing, ambiguous, or outside your control, write it down. Tender assumptions, exclusions, and clarifications protect your position, especially when:

• Drawings are incomplete

• Provisional sums are vague

• Site constraints are undefined

  
  

This not only helps manage risk but also demonstrates professionalism to the client.

2.3 Don't Underestimate Preliminaries

Preliminaries are often squeezed in competitive markets but underpricing them is dangerous. Be clear about:

• Project duration (including conditions and weather risk)

• Site-specific requirements

• Resource availability (supervisors, traffic control, etc.)

  
  

Even a 5% shortfall here can undermine a break-even job.

2.4 Check Programme and Float Assumptions

In compressed programmes or staged projects, ask yourself before pricing:

• Is the programme realistic?

• Are you being given any float?

• Who owns float under the contract?

  
  

Many disputes arise not from delays themselves, but from unclear time-risk allocation. Make sure your tender team and your operational team are aligned.

2.5 Validate Your Internal Sign-Off

If you don’t have a senior QS or estimator to lead final review, create a structured checklist for internal sign-off. Consider below points:

• Contract risk summary

• Assumption register

• High-risk items log

• Third-party inputs (e.g. subtrade coverage, lead times)

  
  

Where possible, get a second opinion, even a short advisory engagement from an external specialist can materially reduce tender risk.

2.6 Be Strategic with Which Tenders You Pursue

With fewer resources, you can’t afford to chase everything. Assess below points before tender the job:

• Fit with your delivery capacity and strengths

• Payment terms and cashflow impact

• Risk profile vs. reward

  
  

Sometimes the best decision is to pass on a project where the commercial structure is unsustainable.

3. Final thoughts

This is a tough market, but also one that rewards clarity, commercial literacy, and smart decision-making. We don’t know how long this constrained environment will last. But we do know this:

Companies that can tender smartly under pressure will survive, and be better positioned to scale when the market recovers.

If you’re in the middle of a tender and feeling under-resourced, you’re not alone. Support is available and you don’t need to build a full-time senior team overnight to gain strategic input.

I’ve supported businesses in this exact situation—reviewing key documents, identifying high-risk clauses, preparing assumption schedules, or even walking your team through a “no-go/go” decision framework.

If this resonates with you, feel free to reach out.

In the meantime, I hope this week’s article has given you a helpful framework to navigate tight tenders with confidence, even in this tough time.

Stay sharp, and tender smart.