Why two stage tendering remains a smart procurement choice

In an industry always seeking certainty around cost, programme and risk, it is easy to assume that traditional single stage tendering offers the greatest security. The process appears straightforward: complete the design, issue a competitive tender, fix the price, then proceed.

In reality, projects are rarely that simple.

As construction consultants, we work across a range of procurement routes, and no single approach suits every project. Two stage tendering remains particularly valuable where schemes involve complex operational requirements, specialist spaces or specific build challenges.

Our current project at SPA Motors in Hereford, being procured via a two stage tender, provides a timely example of why this route continues to be so effective.

In this case, while achieving best value remains important - the overriding priority is to accelerate procurement, commence works on site sooner, and work collaboratively with a contractor from an early stage. By avoiding a prolonged traditional tender period and identifying a preferred contractor early, momentum is maintained without compromising decision quality.

Understanding the scheme

The proposals for SPA Motors comprise a reconfigured and extended operational facility, including multiple technical bays, valet areas, wash bays, specialist bodyshop and paint facilities, together with associated circulation and storage areas.

The layout and massing are clearly illustrated in the proposed plans and North and West elevations prepared by Quattro Design Architects. From the outset, this was not a “one-size-fits-all” industrial building. Internal arrangement, servicing strategy and construction sequencing all have a direct impact on delivery. Early contractor input is therefore critical.

What two stage tendering means in practice

Under a two stage tender process, the first stage is about appointing the right contractor, not simply the lowest price.

At SPA Motors, this involves assessing methodology, programme approach, preliminaries, overheads and profit but crucially also the contractor’s understanding of complex automotive environments.

Stage two then allows the design to be developed collaboratively. Construction input evolves alongside the refinement of architectural and technical information.

By engaging contractors early, two stage tendering moves procurement away from pricing assumptions and towards informed, collaborative decision-making.

Early contractor involvement and buildability

Reviewing the plans and elevations with the contractor has already delivered tangible benefits. Discussions have focused on internal circulation, servicing zones, bay sizes and the sequencing of specialist areas, informed by practical construction and operational experience rather than theoretical layouts alone.

Early engagement allows the contractor to advise on:

• Buildability of proposed layouts

• Practical sequencing across multiple operational areas

• Site access and logistics constraints

• Opportunities to rationalise details before they are fixed

  
  

Under single stage tendering, these issues often emerge later, either priced as risk allowances or discovered once works are on site.

Cost certainty through transparency

A common perception is that two stage tendering delays cost certainty. In reality, it avoids the false certainty that often accompanies single stage tenders.

Single stage pricing frequently includes significant risk allowances where information is incomplete. On a scheme such as SPA Motors, with a high level of functional and technical complexity, that risk pricing can be substantial.

Through the two stage process, costs are developed alongside the design, with clear visibility of:

• What is driving cost

• Where risk genuinely sits

• Which design decisions have cost implications

  
  

This allows informed choices to be made before the final contract sum is agreed, reducing the likelihood of later variations.

Collaboration rather than confrontation

One of the most noticeable benefits on the SPA Motors scheme has been the collaborative tone established early.

Because the contractor is involved while the plans and elevations are still being tested, discussions around cost, programme and design are collective rather than adversarial. Issues are addressed early, with a shared objective of delivering a workable and efficient building.

That shift in mindset often proves invaluable once construction begins.

Programme advantages

While two stage tendering can extend the early procurement phase, it often delivers overall programme efficiencies.

For SPA Motors, early contractor involvement has enabled:

• More realistic construction sequencing aligned with the proposed layouts

• Early identification of long-lead items

• Better planning of specialist areas within the building

  
  

As a result, the programme now reflects how the building will actually be constructed, rather than how it appears on paper.

Is two stage tendering always the answer?

For straightforward, low-risk projects with fully resolved designs, a single stage tender can still be appropriate. However, where schemes involve specialist spaces, operational constraints or evolving design requirements, as demonstrated by the SPA Motors, two stage tendering offers a more robust and collaborative route.

For us, two stage tendering is about improving the quality of decisions made early, when those decisions have the greatest impact, not about adding unnecessary complexity.

Our experience at SPA Motors in Hereford reinforces what we see across similar projects: early contractor engagement improves buildability, provides clearer cost certainty and fosters a more collaborative team. These benefits significantly reduce risk once construction is underway.

If you're would like to find out more about our two stage tender approach, please get in touch.