The tender says I must accept their terms with no amendments
The enquiry came with the main contractor's subcontract, a line saying qualified tenders will not be considered, and a Friday return date.
Updated: . By Jack Butler-Kettle, Construction Claims Consultant.
What's happening?
Many enquiries come with your main contractor's own subcontract, or its amendments to a standard form. They also say your tender must accept those terms in full. The terms then travel with your price. Anything you did not raise or allow for, you are taken to have accepted.
The clauses that matter most at tender cost you money whether or not anything goes wrong. Five stand out: the payment period, retention and its release, delay damages and any cap, time bars on notices, and rights to deduct. You can estimate what each will cost now, from your own cash flow and the job's programme, and put it in the price.
"No amendments will be accepted" is a negotiating position. Many main contractors will still discuss a short, well argued list after tender. But a cost you neither priced nor raised before the price went in is very hard to get back later.
The solution
Read the terms before you price, not after you win. List every clause that moves money or risk onto you, and rate each by what it could cost on this job. Then split them in two. Ask to change the few that matter most, with the wording you want, as tender queries before the return date. Price the rest in, so a refusal costs you nothing you have not allowed for.
Pre-Signing Contract Review does this with you. We find and rate the clauses that move money or risk onto you, write the amendments to ask for, and set out what to price in.
Example
Illustrative example. The scenario and figures are invented.
The facts
A drylining subcontractor is pricing a £480,000 package for a school. The enquiry includes the main contractor's amended subcontract and says qualified tenders will not be considered. The return date is 8 days away.
What happens
- The subcontractor reads the amended subcontract before it finalises the price. It finds 9 clauses that move money or risk onto it.
- It rates each by what it could cost on this job. The highest are uncapped delay damages of £2,500 a day and 60 day payment terms. Also high are retention held until the whole project completes and a 7 day time bar on delay notices.
- It raises two as tender queries before the return date, each with proposed wording. It asks for delay damages capped at 10 per cent of the subcontract sum, and 14 days for delay notices.
- It prices the rest. That covers financing the longer payment period and the later retention release, plus a risk allowance for the other clauses.
- After tender, the main contractor accepts the cap and the 14 day period, and keeps its payment and retention terms.
The terms priced into the tender
| Item | Amount |
|---|---|
| Package | £480,000 |
| Financing the 60 day payment period | £4,300 |
| Financing retention held to project completion | £2,500 |
| Risk allowance for the other clauses | £4,200 |
| Added to the tender | £11,000 |
The outcome
The subcontractor tenders on terms it has read and priced. It signs with delay damages capped at £48,000 and 14 days for delay notices. The £11,000 for the terms that did not change is already in its price.