For subcontractors in Australia, both large and small, a common objective is to break into the Tier 1 Market. The jobs are larger, there is a lot more money in it, and the projects are generally long-term. Winning a contract with Multiplex, Lendlease, CPB Contractors or even Built, give your operation more credibility and can lead to substantial growth for your business.
Moving into the Tier 1 sector is similar to moving into Government tenders but generally even more competitive. You need to:
- Adhere to increased safety and quality documentation requirements. You generally need to not only be ISO certified, but also comply with their specific certification requirements.
- Compete with other sub-contractors who are pricing aggressively to win work.
- Have the patience to be firm, especially when negotiating pricing.
- Ensure you get paid and are across payment terms and other contractual requirements.
- Provide other supporting documentation requirements that need to mirror government project requirements for local content and modern slavery.
In this guide we will discuss how you can break into the Tier 1 market and win large construction tenders.
The lowest price doesn’t always help you win. Win on value.
It’s important to win on value and quality. Of course there is price pressure on Tier 1 contracts, however, it’s certainly not the only factor. Tier 1 head contractors are generally working on multi-million-dollar projects with tight construction schedules and robust project management plans in place. Liquidated damages clauses are common, and they need subcontractors that have priced the tender fairly to enable them to complete the works.
When putting your tender together you need to prove to the Tier 1 contractor that you:
- Have the capacity and resources to deliver the works / project. They will look at your current workload and resources allocation as well as your proposed teams.
- The financial stability and history to runt the project (and pay your personnel whilst awaiting payment from the contractor).
- The safety procedures that mirror those of the contractor and all the associated documentation.
- The credibility to deliver on site and work on site seamlessly.
In addition to having a competitive price, if you want to win work with a Tier 1 or even Tier 2 construction contractor in Australia you have to prove that you are a safe bet that will not cause any unnecessary hassles.
Quality Assurance: Reputation helps, however, for Tier 1 contracts you need to have evidence that you have quality assurance processes in place and a quality focused culture. Defect management workflows, ad-hoc inspections of your staff and integrating quality assurance checks into your methodology are all critical.
Many sub-contractors import materials directly from overseas with many lower tier builders not requiring verification. Tier 1 contractors will request steel and concrete specifications and you need to ensure you have this in place and your supply chains adhere to modern slavery requirements.
Workplace Health, Safety & Environment: Generally speaking, you need certified ISO 145001 documentation in order to win a contract with a Tier 1 contractor. If you don’t have it in place, and can’t get it in place in time, then you need to have documentation in place that mirrors the relevant ISO requirements and is also tailored to the project. Your SWMS need to be tailored to the project (they will review this) and you also need to detail your safety record.
Social procurement and local content – the edge to helping you win
A lot of the time you may have a secret weapon to win contracts with Tier 1 and other large contractors, or even large government contracts in Australia, which you don’t even know exists. When Tier 1 contractors bid or tender for government projects, they make commitments to support local suppliers and social groups.
These commitments are now quantified and there are strict targets in place. You can help them achieve these targets if you are a local supplier or have some other social value. Therefore, it’s an excellent idea to audit your business and personnel and identify if you:
- Employ any Indigenous personnel or are Indigenous owned. If so, focus on this in your tender.
- Employ people from vulnerable groups, such as disabled workers or even a high percentage of women.
- Or your staff and workers are based in the local area in which the project will take place.
- If you purchase off any local suppliers.
If this it the case, this may make you a preferred contractor for Tier 1 and even Tier 2 builders on projects across Australia as the you may help them comply with their local content and social procurement
Make your bid easy for estimators to read
Most estimators review hundreds of quotes for any specific project. You need to create a table to summarise how you comply with all the requirements, and set your quote out in an easy to read manner. The critical information should be easily identifiable, and everything needs to be neatly, concisely and clearly presented.
How do we start winning bids with Tier 1 contractors?
Speak to our team today about how we can help you grow your business. Here at The Tender Team, we have a track record of helping subcontractors grow their businesses and win major construction and infrastructure contracts across Australia including in states such as NSW, Victoria, Queensland, WA and beyond.
Our director, Jason Cooney, specialise in helping subbies win large contracts and area ready to help you find and win more bids.
Contact our team today at info@thetenderteam.com.au or call us to review your next Tier 1 opportunity.
