TSINGHUA SCIENCE AND TECHNOLOGY

ISSN  1007-0214  44/67  pp273-278

Volume 13, Number S1, October 2008

E-Tendering Process Within Construction: A UK Perspective

Geoff Tindsley, Paul Stephenson**

Division of Built Environment, Faculty of Development and Society,

Sheffield Hallam University, Sheffield S1 1WB, UK

Abstract: E-tendering can be defined as the issue and receipt of tender documentation through electronic
means which facilitates the procurement of construction work and the award of contracts. The current paper-
based method of tendering has been commonplace within the industry for a significant number of years, but
with recent technological advancements, this traditional process is rapidly becoming outdated. Several ma-
jor projects within the UK are now being procured through the e-tendering process which includes the multi-
billion pound development for the Olympic Games in London 2012. However, while these prestigious pro-
jects are embracing e-tendering technology, it is not certain as to what extent e-tendering is used across the
construction sector generally. This research is primarily concerned with establishing the current status, prac-
ticalities and resource effectiveness of e-tendering within UK construction. Results are provided from an in-
dustry survey which includes both quantitative and qualitative data. A case study implementation is also in-
cluded which assesses the utilisation of e-tendering software in practice. The research findings indicated
that e-tendering can provide substantial resource savings to a major part of the supply chain, with the key
benefits being enhanced communication, time savings and reduced costs. However, a considerable propor-
tion of the industry remains uncertain about embracing new technologies, with reluctance to change being
perceived as the greatest barrier. The findings suggest that many professionals within the UK construction
industry recognise a requirement for increased implementation of e-tendering, but feel that training, educa-
tion and support from senior management are essential requirements for e-tendering to become widely ac-
cepted in the future.

Key words: construction; project data; electronic communications; e-tendering

to a general concern over security and legality issues[1].

Introduction
Despite the apparent benefits of information technol-
ogy (IT), many organisations have been slow to adopt
e-construction and in particular e-tendering. Many com-
panies are approaching the use of e-tendering with cau-
tion in order to test its practical advantages and encour-
age confidence amongst staff before implementation.
Additionally, this apprehension may also be attributed
Received: 2008-05-28
** To whom correspondence should be addressed.
E-mail: p.stephenson@shu.ac.uk
1 Tendering Process and E-tendering
For several years, tendering has been undertaken as
part of the traditional contractual procurement process,
which operated on the separation of the design and
construction phases. However, this has started to
change with increased technological complexity, de-
sign and build procurement, and client expectancies[2].
E-tendering has been assumed to be more cost-
effective than the current, traditional method, in
addition to time savings offered by the process. In
 274
simplistic terms, this will have implications for re-
duced printing, copying and courier costs and also re-
duce the chances of miscommunication[3].
There also appears to be a general opinion within the
industry that e-tendering should be made more main-
stream and accessible to all members of the supply
chain. Booty[4] has indicated that web-based tendering
is the way forward in order to reduce bid costs and bu-
reaucracy while at the same time offering the opportu-
nity for greater clarification of information. However,
some literature highlights the cost implications of e-
tendering, which for most organisations will be the ini-
tial capital investment for set-up costs of the system
and training, which will particularly affect smaller
firms[5]. Contractors may also suffer cost consequences
in printing costs and employing specialist staff to use
plotters and CAD. However, Marsh and Flanagan[6]
dispute that there are many other hindrances prevent-
ing construction companies from implementing ad-
vanced IT systems. Being able to quantify and measure
the actual cost of creating and distributing information
electronically is seen as a barrier by some organisa-
tions. For companies wanting to put e-tendering into
practice, there must be sufficient cost assessments in
place in order to gauge whether using the process is fi-
nancially viable[7].
A government report by the National e-Procurement
Project highlights that approximate savings of £8 mil-
lion per annum that can be made within their local au-
thorities by using e-tendering[1]. Another illustration of
cost and time savings has been highlighted by Clark[3],
on the use of online tendering by a company which
saved over £200 000 in tender costs representing a
73% reduction. Additionally, Booty[4] highlights the
saving of an organisation at £1500 per tender in paper
and administration costs, a reduction in time of 1.5
days to administer each tender where the overall spend
against the budget was reduced by 20%.
If e-tendering is to be fully implemented across the
whole spectrum of the supply chain, all of the relevant
parties must be aware of the practices, procedures and
potential pitfalls of using it[8]. Additionally, there needs
to be an increased awareness among subordinates and
suitable training provisions established, in order to fa-
cilitate e-tendering successfully.
There is still sufficient apprehension within the UK
construction towards e-tendering, which suggests that
Tsinghua Science and Technology, October 2008, 13(S1): 273-278
it will be some time before it is fully incorporated and
accepted by the industry as a whole[5]. The creation of
a guide specifically for e-tendering highlights the ac-
ceptance by the industry that the process is destined to
feature predominantly in the future of construction[9].
Moreover, opinions are still mixed and the industry is
still undecided on the full implementation of e-
tendering, which “offers advantages over paper-based
methods. It can be quicker but there is still the oppor-
tunity for human error. If the technology fails at a cru-
cial moment, it can also mean unfairness to one or
more of the tenderers”[10].
The dearth of substantial fact-based study can be re-
lated to the uncertainty and formative stage that e-
tendering is currently undergoing. Indeed, Breetkze et
al.[7] highlighted that opinion is clearly divided over
the benefits of using e-tendering, and that further re-
search should enable this opinion to be more clearly
identified.
2 Aims of the Research
The aim of the research was to appraise and evaluate
the implications of the e-tendering process and assess
its effectiveness within UK Construction, and also to
determine whether the e-tendering process is cost-
effective and practical for companies to implement
currently, and whether companies within the UK con-
struction industry are ready to fully incorporate
e-tendering as the preferred process.
3 Research Methodology
Owing to the nature of the research topic area, a quan-
titative and qualitative research methodological ap-
proach was adopted which embraced literature findings,
an industry web-based questionnaire survey, interviews
with leading UK practitioners and assessment of a case
study implementation.
A questionnaire was distributed to 115 professionals
from within the UK construction industry. The key aim
was to ensure that a broad section of the supply chain
was questioned, in order to achieve a balanced and ex-
tensive set of data to be able to conclude effectively. A
total response rate of 43% was received which in-
cluded returns from clients, quantity surveyors, con-
tractors and sub-contractors, architects, engineers, sup-
pliers, and IT specialists.
 Geoff Tindsley et alġE-Tendering Process Within Construction: A UK Perspective
4 Research Findings
Some of the major findings highlighted that 64% pre-
ferred e-tendering (of which 60% were quantity sur-
veyors) while 36% preferred traditional tendering (of
which 89% were contractors). This indicates that the
overwhelming majority of contractors would rather
continue to use traditional tendering practices.
With regard to cost effectiveness of e-tendering, of
the 29 professionals who responded, ‘Yes’, 66% were
quantity surveyors. Of the 20 who responded, ‘No’,
75% were contractors. This suggests that cost-
effectiveness is not being realised by a major constitu-
ent of most construction projects (contractors). With
regard to time saving and other resources with e-
tendering, the result is balanced with a slight majority
of respondents (59%) highlighting that e-tendering did
save time and other resources in comparison to support
for traditional tendering (41%).
Conversely, on the issue of barriers to its utilisation,
out of the 56 responses, 41 felt that resistance to
change was the greatest obstacle to e-tendering, which
represents 73% of the sample. Six of the respondents
felt that there are other barriers to the uptake of e-
tendering. These included:
x The poor way in which the documents are pre-
sented to the contractor;
x Tender costs are transferred to smaller companies;
x The systems are not always user-friendly which
can be off-putting to suppliers and other partici-
pants;
x E-documents are often badly referenced and con-
sequently like a jigsaw to assemble into a hard
copy, meaning smaller companies often refuse to
bid on e-tendering projects;
x Some contractors’ IT capabilities are not adequate
to successfully tender electronically.
Moreover, security was seen as an important aspect
of e-tendering projects, meaning that, prior to a pro-
ject’s commencement, most parties involved will seek
to establish how secure the software is. From the 49 re-
spondents, 38 felt that the security of information when
using e-tendering, in their personal experience, was
adequate or secure, representing approximately 78% of
the survey population. This indicates that the majority
of users are comfortable exchanging sensitive docu-
ments through this method.
275
Despite the relatively slow uptake of e-tendering
within the U.K construction industry, the literature re-
view highlighted that most construction professionals
feel that there is potential for savings to be made, but
believe that a lot of changes must be instigated in order
for this to be achieved. Of those questioned 59% felt
that e-tendering saved financial resources in compari-
son to traditional tendering. Also, 63% agreed with the
statement that e-tendering can potentially reduce ten-
der costs, with a further 6% strongly agreeing. This
clearly highlights that more people feel e-tendering can
be cost-effective than those who have realised such
benefits.
For the potential of e-tendering to reduce time, 31%
disagreed with the statement regarding costs, but 43%
disagree with the above statement regarding time.
However, this does not show an increase in those who
have benefited from time savings to those who feel that
e-tendering could provide a reduction in the tender pe-
riod. This is an unexpected result, as the general per-
ception of e-tendering is that time and cost savings are
directly related. There was an increase in the number
of respondents who could envisage cost savings from
those who actually realised them, so it may be ques-
tioned as to why this is not applicable to time savings,
especially as certain respondents used phrases such as
‘time is money’ and that time and cost benefits go
‘hand-in-hand’ and were commonplace.
Additionally, 75% of those surveyed felt that full
implementation would benefit the UK construction in-
dustry as a whole. Respondents were also asked to give
reasons for their answers. Those whose answered ‘Yes’
commented as follows.
x Dramatic reduction in the timeframe of the tender
period.
x Streamlined document handling, reduced paper-
work, clear audit trail.
x Reduction in time and money spent on copying
and posting tender documentation. Late changes
can more easily be incorporated into the tender.
x Regular usage would in time lower tender produc-
tion costs for all stakeholders and invariably
lower overall project costs.
x Efficiency savings - cost, time.
Responses not in favour of e-tendering included:
x Costs transferred to contractors and sub-
contractors, who see little or no benefits;
 276
x Unless we can all move to a complete paperless
system, the tendering costs are just transferred
from the consultants to the contractor;
x Not every party is equipped or trained for work-
ing in this way;
x From a sub-contractor’s point of view it is time
consuming;
x Getting familiar with a project takes time; it can
be confusing, and documents still have to be
printed for enquiries.
The comments listed above are just a brief overview of
the reasoning provided by the respondents. In simplis-
tic terms, from the data gathered, most quantity sur-
veyors and architects have experienced resource sav-
ings when using e-tendering, while contractors and
sub-contractors on the whole, have not.
Despite the overall response of the questionnaire be-
ing positive in favour of e-tendering, the majority of
additional comments were made describing potential
barriers, reasons for lack of widespread implementa-
tion, and hesitancy amongst large sections of the indus-
try. The comments included:
x In the long term, benefits can be seen, but these
benefits must be realised by the whole supply
chain, not just the client and the quantity surveyor;
x Not all companies have the capability to carry out
e-tendering;
x Resistance to change is the hardest aspect, once
people are familiar then the benefits are signifi-
cant;
x A large proportion of the construction industry
supply chain does not have the necessary soft-
ware/hardware capabilities as the main contrac-
tors, so inevitably hard copy documents are still
issued by main contractors.
The anticipated relationship between cost and time was,
however, evident when respondents were questioned
regarding actual benefits, as opposed to perceived and
potential advantages. Whilst the majority (59%) said
that e-tendering was cost-effective in their experience,
this figure is not large enough to substantiate that
e-tendering is a cost-effective and efficient process. A
larger proportion feels, however, that there is potential
for e-tendering to improve cost, time and overall
efficiencies.
Additional comments from 5 interviewees (client,
architect, quantity surveyor, contractor, and IT
Tsinghua Science and Technology, October 2008, 13(S1): 273-278
specialist) helped confirm findings from the question-
naire and literature findings. Some of the interviewees
expressed reservations about the current software and
the practical implications, as well as suggesting ways
in which the programs could be improved and made
more user friendly. Professionals that currently utilise
the process are actively considering modifications,
which implies that a large proportion of the industry
realise, and have accepted, that this form of technology
is going to feature predominantly in the foreseeable fu-
ture of construction.
The interviews highlighted that the whole industry
must be able to realise the benefits from implementing
e-tendering and collaborative software. It is not satis-
factory to exclusively assist the architect and quantity
surveyor. Contractors and sub-contactors cannot be
unnecessarily forced into using the process otherwise
tender costs will undoubtedly increase, resulting in
greater project costs for the client.
5 Case Study
The objective of the case study was to assess the barri-
ers participants experienced that could possibly pre-
vent more widespread use of e-tendering, and addi-
tionally, to establish what the key practicalities of us-
ing e-tendering software are.
The case study project comprised the redevelopment
of an existing car dealership including the provision of
a large new customer and staff car parking facility and
vehicle display areas. The value of the project was ap-
proximately £3 million, with a tender period of 6
weeks and a contract period of 48 weeks. The form of
contract was based on JCT 1998, and the tender was
issued and facilitated utilising a company’s internal
electronic tendering system.
The quantity surveyor felt that cost savings were pri-
marily made on printing and postage. Interestingly,
both the contractor and the quantity surveyor agreed
that it was the architect who realised the most substan-
tial cost savings, since there is little or no expenditure
in comparison to traditional tendering when issuing
drawings. The quantity surveyor stated that, “We had
to incur printing costs that would normally rest with
the architect”. Project participants thought that most
significant advantage of e-tendering was quicker
communication, providing further support to data gath-
ered. The contractor highlighted that, “If a change is
 Geoff Tindsley et alġE-Tendering Process Within Construction: A UK Perspective
made, it can be instantly viewed by all the relevant par-
ties rather than traditionally, where it would take days
to receive and distribute such amendments by post”.
Owing to lack of experience, project participants in-
terviewed commented that additional time was spent
familiarising themselves with the software. Subse-
quently, resources were affected, with technical staff
spending time undertaking administrative tasks as the
quantity surveyor stated, “We were in the office much
later than we would have liked preparing the tender”.
When asked who would not benefit, project partici-
pants supported the findings of both the questionnaire
and interview, agreeing that the contractor would not
greatly benefit, with the quantity surveyor adding that,
“They (contractor) still need to print all the informa-
tion anyway”. It is apparent that the only benefit real-
ised by the contractor on this particular project was the
speed of communication involving amendments.
The quantity surveyor suggested that the biggest
problem was not being able to check whether contrac-
tors had viewed the latest information. “We had an in-
stance where one of the contractors tendering hadn’t
read all of the tender addendums, missing the latest re-
vision of one of the site plans and subsequently not
picking up a change which was worth a considerable
amount of money”. This is clearly a major issue that
can greatly affect the value of a tender submission. It is
unlikely that if the change was sent traditionally, that
the addendum would have been missed. When asked
whether all the participants were comfortable using the
new software, the quantity surveyor responded that ini-
tially, none of them were, as it was the first time they
had tendered electronically. “All the tendering contrac-
tors were a bit skeptical about it. It’s fair to say that
they were reluctant to start with and a bit negative
about it”. The contractors had little or no choice
whether to tender electronically. This raises an interest-
ing point, meaning that in some cases, contractors are
effectively being forced into using electronic software.
It was apparent from the interview with the quantity
surveyor that, despite him suggesting that overall the
tendering process was a success, there were a number
of problems encountered during the tender period.
Both tendering contractors sent their tender tradition-
ally through the post, despite having received the ten-
der documentation electronically from the quantity
surveyor. This can be largely attributed to it being the
277
first time the contractors had used e-tendering, which
the quantity surveyor supported, “It was our first ex-
perience as well, it took a long time to upload docu-
ments onto the system and was a steep learning curve
for us”. As the contractor stated, “It is imperative that
everyone is trained prior to using the software”. The
quantity surveyor said that his organisation now runs
training workshops for its employees on e-tendering
and collaborative software.
It must be noted that some elements of the tender
process have to be issued traditionally, such as signed
documentation. That, for the foreseeable future, will
always remain the same, at least until electronic signa-
tures become acceptable and commonplace. The quan-
tity surveyor commented that, “Some documentation
still has to be posted, which is unavoidable”.
The quantity surveyor, in summation of the tender
process, responded. “Looking back, it probably took
longer to carry out than if we had sent it traditionally in
the post. However, we are now comfortable with the
software and in a better position the next time we use it,
drawing on the experience we have gained. If we did it
again, I am confident it could be done a lot more effi-
ciently”. This statement highlights the significance of
overcoming the initial challenges and skepticism asso-
ciated with the first use of new technologies. This pro-
ject has shown that resistance to change is still the
largest barrier to widespread implementation of e-
tendering. The tendering contractors were extremely
hesitant about tendering in this format. The lack of
training and understanding could have proved costly to
the contractors’ tender submissions. With reference to
the parties involved in this project, it appears that the
future use of e-tendering is dependent upon the opti-
mism and open-mindedness of the companies involved.
Once an organisation has been involved with one e-
tendering project, it is likely that they will do so again
in the future.
6 Conclusions
One of the most significant findings of this research is
the divide between contractors’ and quantity surveyors’
opinions regarding e-tendering. On the whole, contrac-
tors tend to be against the process, and appear to ex-
perience few or no cost improvements in comparison
to traditional tendering. Conversely, it is evident that
 278 Tsinghua Science and Technology, October 2008, 13(S1): 273-278
e-tendering is much more beneficial to quantity sur-
veyors and architects, because time and therefore cost
resources are greatly reduced. This difference was evi-
dent throughout the data collection, particularly during
the interviews, with contractors having markedly
strong views against e-tendering. Some of the negativ-
ity can be attributed to lack of appreciation of e-
tendering, plus a positive attitude towards traditional
values.
The data obtained and analysed indicated that ‘over-
all efficiencies’ were perceived to be the greatest bene-
fit of e-tendering. This can be summarised as a combi-
nation of cost, time and other resource savings, as well
as improved company profile and communication. The
combination of results obtained throughout this re-
search proves that e-tendering is an efficient process
for use within the UK construction industry.
The research reflects an industry that is not yet sure
whether to fully embrace new technology or to remain
with tried and tested methods. It is apparent, however,
that the majority of those within construction can at
least envisage a future of electronic transfer, and see
the potential that e-tendering can provide. One respon-
dent stated that e-tendering is, “currently not possible
but there is significant potential”. The latter statement
is simplistic yet conclusive, representing a consider-
able proportion of the UK construction industry. How-
ever, once fully implemented, almost all end-users re-
gard e-tendering as a positive development that elimi-
nates many of the mundane, administrative tasks and
improves efficiencies in comparison to the traditional
tender process.
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