Impact of contractor internal tendering procedure governance on tender win-rates: How procedures can be improved

Construction contractors normally, though not always, pursue a tender with the expectation of winning the project and subsequently making a profit. A contractor’s corporate governance constraints, risk appetite, and selected tender strategy impact the tendered price and any associated qualifications. Therefore, a contractor’s failure to win any of a number of tenders submitted in a row may not constitute failure in their management’s eyes. A series of detailed semi-structured interviews were undertaken with 25 construction contractors, across both large and small publicly listed and privately owned companies, as part of a wider research project into contractors' tendering procedure corporate governance. Analysis of the interview transcripts found that, while contractors talked about 'win' and 'winning' twice as often as 'loss' and 'lose', the publicly listed contractors were three times more likely to raise issues of 'fail' or 'failure' than the private contractors and were twice as likely to discuss 'lessons-learned' matters, indicating different approaches to corporate governance and tender outcome expectations. A number of the contractors were clear their companies' tendering objectives were to make profits and not to win tenders. While the contractors did not necessarily see losing a tender as 'failure', often saying failure was winning a project that lost money, the research results indicate the real failure within contractors' tendering procedures is that most of them still have inadequate robust lessons-learned structures to take information from previous tenders and projects and ensure they are injected into subsequent tender pursuits. While informal lessons-learned approaches may be adequate for smaller private contractors, corporate governance expectations in publicly listed and larger privately owned contractors now require more rigorous client and tender prospect selection procedures. Hence, processes by which contractors can implement structured lessons-learned procedures, as part of their corporate governance to avoid overall business failure, are developed and presented.