When is a two-stage tender more appropriate than a single-stage tender?

Two-stage tendering suits projects where the design is not sufficiently developed for a reliable lump-sum price - typically RIBA Stage 2 or early Stage 3. It also works well where early contractor involvement adds genuine value through buildability advice, long-lead procurement, or programme sequencing. The trade-off is that the employer carries more commercial risk during pre-construction, as the final contract sum is not confirmed until Stage 2.

What is the typical basis for Stage 1 competition?

Stage 1 tenders are evaluated on overhead and profit percentages, preliminary cost build-ups, key team CVs, programme approach, and methodology statements rather than a full contract sum. The employer selects a preferred contractor based on commercial terms and capability, then works with them through pre-construction to develop the design and price the works package by package. Stage 1 rates carry forward into the main contract and form the basis for any variation valuation.

Procurement

Construction - managing a two-stage tender

8 stages. One process. Full commercial control.

Zigaflow Editorial

Published 18 July 2026

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Step by step

Prepare Stage 1 PackageQuotes
Issue scope outline, site information, employer's requirements, preliminaries schedule, overhead and profit percentage, key rates, and methodology request.
Evaluate Stage 1 ReturnsRFQs
Score tenderers on overhead and profit percentage, preliminary build-up, team CVs, programme, and methodology. Select preferred contractor and notify all parties.
Appoint Under Pre-Construction Services AgreementContracts
Execute the PCSA defining the scope of pre-construction activities, the Stage 1 fee, and the conditions under which Stage 2 will proceed.
Develop Design with Contractor InputProject Tracking
Contractor advises on buildability, programme sequencing, and market conditions as design progresses from RIBA Stage 2 to Stage 3 or 4.
Procure Sub-Packages Open BookRFQs
Contractor issues enquiries to trade contractors. Returns are shared with employer and QS. Each package price is agreed before inclusion in the Stage 2 sum.
Agree Stage 2 Contract SumQuotes
Contractor presents full Stage 2 tender built from agreed sub-package prices. Employer and contractor negotiate any final adjustments before fixing the sum.
Execute Main ContractContracts
Both parties sign the main contract at the Stage 2 price. Pre-construction costs are absorbed into or credited against the main contract value.
Mobilize and Commence WorksJobs
Contractor starts on site. Stage 1 rates and agreed programme carry through as the baseline for variation valuation and cost comparison.

What this workflow solves

The pre-construction phase generates a large volume of correspondence, cost plan revisions, and sub-package pricing returns, with no central place to track what has been agreed and what is still open.
Stage 1 overhead rates and methodology commitments get buried in tender documents, making it difficult to reference what was originally agreed when Stage 2 pricing is negotiated months later.
Sub-package procurement involves multiple simultaneous RFQs to trade contractors, and coordinating returns across email threads makes comparison, approval, and inclusion in the Stage 2 sum slow and error-prone.

Frequently asked questions

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Construction - managing a two-stage tender

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What this workflow solves

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