Single stage tendering needs a finished design

Single stage tendering is back on the table because contractors want work, and some developers will take the competitive price while it is there. That is a sound decision only if the design is mature enough to be priced as a lump sum. If it is not, the keen number you accept in November comes back as qualifications, provisional sums and variations by spring. Test the information before you test the market.

What the cost consultants are saying

London QS Core Five said in its autumn update that its tender price index is unchanged, with a lull in demand keeping a lid on rises. As reported by Building on 16 October, the firm said: "Tender returns received over the summer have been competitive. More contractors are actively engaging and some are willing to entertain single stage tendering." It also said that "not all the increased costs are being passed on" and that margins are absorbing the brunt.

The same update noted that Tier 1 and 2 M&E contractors "remain busy tendering" but have "significant resources tied up in PCSAs on major projects and or data centres". That matters for anyone thinking a single stage route avoids the specialist capacity problem. It does not. It moves the problem into the tender period.

Gardiner & Theobald's autumn market update points the same way. Construction Enquirer reported that G&T trimmed its 2026 tender price inflation forecast to 3.25%, and that more than half of survey respondents said contract terms and risk allocation were pushing prices up, while compressed programmes and immature designs were driving higher allowances and qualifications. G&T's own Tender Price Indicator puts it plainly: more cost is being "absorbed, qualified or carried through preliminaries and risk allowances rather than OH&P".

Read those two together. Contractors are hungry enough to price single stage, but they are not giving away risk. They are pricing it somewhere you may not be looking.

Where the risk hides in a single stage price

A two-stage route gives you time to close design gaps with the contractor before the contract sum is fixed. A single stage lump sum assumes those gaps are already closed. When they are not, a commercially sharp contractor does three things.

First, it qualifies. The tender letter lists exclusions and assumptions, and every one of them is a variation waiting to happen. On a busy return, the qualifications schedule is often the least-read document in the pack.

Second, it carries. Risk that cannot be qualified out gets loaded into preliminaries or a general risk allowance. You will not see it as a line item, but you pay for it whether or not the risk lands.

Third, it prices the drawing it was sent. If the M&E layouts were at Stage 3 and the architect issues revised GAs a week after tender, the contractor's price is still tied to the old revision. Under a JCT Design and Build contract, revised Employer's Requirements are a Change. Under a JCT Standard Building Contract with quantities, revised drawings are a Variation. Either way, the gap becomes your cost the moment the new revision is issued for construction.

None of this is bad faith. The developer's job is to make sure the price reflects a design that will not move much.

The design readiness test

Before you go single stage, run the scheme through a short test. If you cannot answer yes to most of these, a two-stage route or a PCSA with a tight scope will usually cost you less overall.

Design readiness checklist for single stage tenders

• The drawing register shows every package drawing at the revision you intend to tender, with no "preliminary" or "for information" status on anything a specialist must price.

• The structural, façade and M&E designs are coordinated with each other, not just complete in isolation. Clashes found after tender become your cost.

• The specification names products or performance standards for every package, not "to be confirmed".

• Survey information is in the pack: ground investigation, existing services, measured surveys for refurbishment.

• Planning conditions that affect construction are discharged, or the risk of each one is clearly allocated.

• For higher-risk buildings, the Gateway 2 position is clear and the design you are tendering is the design you will submit.

• You know which specialist packages carry the most design risk (usually MEP and façades) and you have checked that capable specialists can actually price them in the tender window.

• You have a single place where bidder questions are answered and the answers are issued to everyone.

That last point is where most single stage tenders go wrong in practice. Tender queries come in by email, phone and site visit. Some get answered to one bidder only. By the time returns arrive, nobody can say which clarifications every tenderer priced. Running tender issue, RFIs and returns in one system, such as SubTrada, with the drawings pulled straight from the controlled register at a fixed revision and every response logged against the package, gives you a clean record of what was priced.

A worked example

This is an illustrative example, not a real project. Take a £22m office refurbishment where the developer is offered a single stage price 4% below the cost plan. The design team says the scheme is "basically there".

The register tells a different story. The architectural set is at construction issue. The façade drawings are at revision C, with the specialist's design still to be developed. The M&E is at Stage 3 with plant locations unresolved. The tender returns arrive with a qualifications schedule of 31 items, eleven of them tied to M&E coordination and four to the façade interface.

The cost plan comparison looks good on the summary sheet. Once the commercial team prices the qualifications at a realistic level, the gap narrows sharply, and that is before any design development variations on the façade and M&E after contract. The 4% has largely gone, and the developer has lost the ability to work through those packages with the contractor before the price is fixed.

The sensible call here is a split. Tender the shell, core and architectural packages on a firm basis, and run M&E and façades through a defined second stage or a PCSA with a capped fee and a clear programme for fixing the price. It is less tidy on paper and much tighter in the final account.

What main contractors should do on the other side of the table

If you are a Tier 1 or Tier 2 contractor accepting single stage risk to fill your 2027 book, the same discipline applies to your own supply chain. Your subcontract enquiries must go out on exactly the revisions you priced. Your specialists' qualifications must be read against the client's tender documents, not just your own. When the design moves after contract, each change needs to be captured as a numbered instruction against the revision that caused it, so your claim to the client and your instruction to the specialist describe the same thing. SubTrada's variation approval, which issues an instruction number once approved, is built for exactly that link.

Contractors who take single stage work on immature design and then try to recover it all through the final account are storing up a fight. Pay less notices arrive faster when a client feels misled at tender.

My view

Single stage tendering is a good tool in a soft market, but only for schemes that are genuinely ready. The competitive prices Core Five is seeing will not last forever, and developers will be tempted to lock them in. Do the design readiness test first. Where the honest answer is that MEP or façades are not there yet, split the procurement rather than pretending a lump sum is firmer than the drawings underneath it.

This week, pull your next scheme's drawing register and mark every package drawing that is not at tender issue. That one list will tell you which route to take.

FAQ

Is single stage tendering cheaper than two-stage?

It can be when the design is complete, because competition is applied to the whole scheme at once. When the design is immature, contractors protect themselves through qualifications and risk allowances, and the final account often ends up higher than a well-run two-stage process would have produced.

What design stage is needed for a single stage tender?

There is no fixed rule, but every package a specialist must price should be at a coordinated, tender-issue revision with clear specifications. In practice that means RIBA Stage 4 information for the main packages, with any remaining specialist design clearly scoped.

How should developers handle tender qualifications?

Read the qualifications schedule before the summary price. Put a realistic value on each item, clarify or remove what you can before award, and record which clarifications every bidder priced so the comparison is like for like.

Can you mix single stage and two-stage on one project?

Yes. Many schemes tender the well-defined packages on a firm price and keep high design-risk packages such as MEP and façades in a defined second stage or PCSA. The contract needs to set out clearly how and when the second-stage price is fixed.