ProcurementJune 20265 min read
There is a common sequence of events in commercial construction projects in Bangladesh. The client approves a design, issues it to tender, receives bids, appoints a contractor, and begins construction — only to find that the final account is substantially higher than the contract sum. The gap is filled with variation claims, and the client is left arguing about which changes were in scope and which were not.
In the majority of these cases, the root cause is the same: the design was not complete when it went to tender.
This article explains why that happens, what it costs, and what a properly managed procurement process looks like instead.
The pressure to tender early is real. Clients have board approvals with budget estimates attached. They have lease start dates, operational deadlines, and internal stakeholders who want to see a contractor on site. The design team, under the same timeline pressure, issues drawings that are advanced enough to look complete but have not resolved all the coordination and technical details that a contractor needs to price accurately.
The result is what the industry calls a "tender gap." The contractor prices what they can see. Everything they cannot see — the unresolved MEP coordination, the interface between the fit-out contractor and the base building, the specialist sub-systems that appear on the drawing list but whose specifications have not been issued — they price as a risk allowance or exclude entirely.
In either case, the client does not know what they are actually buying. They have a contract sum. They do not have a fixed price.
A Good-for-Construction (GFC) drawing is a drawing that has been reviewed, coordinated, approved, and issued for construction. Not issued for tender. Not issued for pricing. Issued for construction.
The difference matters because:
A GFC drawing set that covers 70% of the scope at tender stage means 30% of the project will be defined after the contractor is on site. That 30% will be priced as variations — and variation pricing is never as competitive as tender pricing.
The contractor who bid low to win the job knows this. The tender is the mechanism for winning. The variations are the mechanism for recovering margin.
On a standard corporate fit-out, the following design gaps are most commonly responsible for variation claims:
MEP coordination. When mechanical, electrical, and plumbing drawings have not been coordinated against the ceiling, structure, and partition layouts, conflicts are discovered on site. Each conflict generates a variation request. On a medium-complexity project, unresolved MEP coordination typically generates 5–12% of additional contract cost in variations.
IT and specialist sub-systems. Data cabling routes, server room specifications, access control, CCTV, AV — these are routinely missing or underspecified at tender. Contractors either exclude them or price at day-rate, which is always more expensive than a tendered rate.
Scope interfaces. The boundary between the fit-out contractor's scope and the base building landlord's scope, or between the main contractor and specialist sub-contractors engaged directly by the client, is a perennial source of dispute. "Who supplies the electrical distribution panel?" is a question with an expensive answer when the contract is silent.
Finishes specifications. Generic specifications ("carpet tile — client to select") leave the contractor unable to price accurately. When the client selects a product above the allowance, the difference is a variation. This happens on almost every project where specifications are incomplete at tender.
Collectively, these gaps account for the majority of variation exposure on projects where the design was not at GFC stage before tender. Studies of commercial fit-out projects in comparable Asian markets show variation costs averaging 18–22% of contract sum on projects tendered against incomplete design sets.
The sequence matters:
Stage 1: Concept design — completed and approved before any procurement activity. The spatial layout, major systems approach, and specification intent are agreed with the client. This is the time to make changes. It costs nothing to move a partition on a drawing.
Stage 2: Schematic design — multi-discipline coordination commenced. Architecture, MEP, and specialist systems are overlaid. Clashes are identified and resolved at drawing stage. The BOQ is prepared from this set to give the client a reliable cost estimate before the design is frozen.
Stage 3: Design freeze — formally confirmed by the client. No further scope changes after this point without a formal change order that is assessed for programme and cost impact before approval. This is the discipline that prevents variation creep.
Stage 4: GFC issue — all drawings complete, coordinated, and approved. The tender package is issued only when this stage is complete. The BOQ matches the drawings. Contractors price what is shown. Exclusions are identified and resolved before tender, not during construction.
Stage 5: Tender — run against a complete, coordinated, approved design set. Bids are comparable. The lowest responsible bid reflects the actual scope. The contract sum is a price, not an opening estimate.
A client without a project manager tends to move from Stage 1 directly to Stage 5, because that is what the contractor and the design team are ready to do. The contractor wants to mobilise. The architect wants to see their design built. The pressure to proceed is aligned, and it runs in the wrong direction for the client.
An independent PMC manages the stage-gate process. The design does not go to tender until it is ready to go to tender. That discipline is worth more than any other single element of project management — because it determines the difference between a project that finishes at its contract sum and one that finishes 20% over it.
The cost of the delay in getting to GFC before tender is typically two to four weeks of additional design time. The cost of not waiting is the variation claims that arrive for the rest of the project.
Describe what you're working on and we'll tell you where independent management adds the most value.