Tendering Process in EPC Contracts: Step-by-Step Overview

In the infrastructure sector and industrial projects, EPC (Engineering, Procurement, and Construction) contracts emerge as the most important form in building an advanced world. However, before any construction begins, there are strategic and often more complicated steps that set the project in motion—the tendering process. Understanding how tendering works in EPC contracts can help stakeholders ensure transparency, competitiveness, and efficient execution from day one.

This inclusive guide offers a complete step-by-step breakdown of the tendering procedure in the EPC agreement, mentioning its significance, the key stages involved, and best practices to follow. Whether you’re a contractor, project owner, or industry professional, this blog will provide you in-depth insights with clarity and insight into one of the most critical phases of EPC projects.

What is tendering in the EPC sector?

Tendering is the formal proceeding by which a project owner calls out qualified contractors to submit competitive bids for the design, procurement, and construction of a facility or infrastructure under a single contract. In the EPC sector, the contractor takes complete command for delivering a project by the agreed deadline and in the given budget.

Tendering is an important aspect because it ensures:

Transparency in contractor selection process

Competitive pricing through the bidding process

Quality assurance due to high competition

Minimized project risk, as there is complete liability at the contractor’s end.

Why Tendering Matters in EPC Contracts

Unlike traditional construction agreements, where design and construction may be divided between parties, EPC contracts reinforced the scope under a single entity. This gives the project owner a “single point of responsibility,” but also increases the risk and importance of selecting the right contractor. Hence, the tendering procedure must be thorough, transparent, and strategically managed by selected specialized contractors.

Key objectives of EPC tendering:

Identify technically capable contractors for the project

Achieve cost efficiency through competition within the contractors

Moderating legal and performance risks

Promote long-term partnerships with reliable EPC firms

Step-by-Step Sprint to Tendering in EPC Contracts

Let’s bifurcate the EPC tendering procedure into simple & actionable steps.

Step 1: Pre-Tender Planning and Documentation

Before releasing a tender, the project owner or client must prepare inclusive documentation that outlines the project scope, technical requirements, and commercial terms. This phase often includes:

Feasibility studies

Basic engineering design

Preliminary cost estimation

Defining contract structure (Lump sum, cost-plus, etc.)

Tender strategy (open, selective, or negotiated tender)

Transition tip: At this stage, setting clear technical and financial expectations ensures a smoother selection process.

Step 2: Issuance of Request for Qualification (RFQ) or Expression of Interest (EOI)

If the owner is adopting a selective tendering strategy, the next step is to invite Expressions of Interest (EOI) or Requests for Qualifications (RFQ) from potential EPC contractors. This helps to shortlist experienced and financially capable bidders.

RFQ typically asks for:

Company profile and credentials

Past EPC project experience

Financial statements

Legal compliance status

Safety and quality certifications

Transition tip: By screening for qualifications first, the owner avoids wasting time evaluating unqualified bids later.

Step 3: Shortlisting of Bidders

Based on the responses to the RFQ or EOI, the project owner creates a shortlist of prequalified bidders. These companies are then invited to participate in the actual bidding process via an Invitation to Tender (ITT).

Note: This step ensures that only companies with demonstrated EPC capabilities move forward.

Step 4: Issuance of Invitation to Tender (ITT)

Once bidders are shortlisted, the project owner issues the ITT or RFP (Request for Proposal) to selected contractors. This document is central to the tendering process and includes:

Scope of work

Project timelines

Technical specifications

Design documents (if any)

Site data and constraints

Contract terms and risk allocation

Bid submission guidelines

Transition tip: A detailed ITT reduces ambiguity, lowers the risk of disputes, and improves bid quality.

Step 5: Bid Preparation by EPC Contractors

After receiving the ITT, the shortlisted contractors begin preparing their bids. This is a time-intensive process that includes:

Technical proposal

Construction methodology

Procurement plan

Risk management strategy

Quality and HSE plans

Commercial proposal (price, payment terms)

Preliminary project schedule

Contractors also conduct site visits and may submit queries or clarification requests.

Transition tip: Successful EPC bidders align their proposals closely with project goals and contract terms.

Step 6: Clarifications and Pre-Bid Meetings

To ensure clarity on expectations and reduce future disputes, the project owner may organize pre-bid meetings and issue clarification bulletins in response to bidder queries.

These interactions foster transparency and ensure all parties are aligned before final bid submission.

Step 7: Bid Submission and Opening

Once bids are submitted before the deadline, the owner proceeds to:

Log and seal all bids

Conduct a formal bid opening session

Acknowledge receipt to all participants

Depending on the tendering format, commercial and technical bids may be opened separately to maintain fairness during evaluation.

Step 8: Bid Evaluation

Bid evaluation is often done in two stages:

Technical Evaluation:

Assess compliance with technical specs

Review project approach and methodology

Evaluate design capability, project schedule, HSE, and quality systems

Commercial Evaluation (Only for technically qualified bids):

Price comparison

Payment terms

Risk sharing and contract clauses

Lifecycle cost analysis

A weighted scoring system is often used to ensure objective evaluation.

Step 9: Negotiation and Finalization

Once a preferred bidder is identified, the client enters negotiation to fine-tune the final commercial terms, resolve ambiguities, and finalize scope adjustments, if any.

Topics discussed may include:

Price revisions

Payment milestones

Change order mechanisms

Performance guarantees

LD (Liquidated Damages) clauses

Transition tip: Clear negotiation fosters a solid contractual relationship from day one.

Step 10: Award of Contract

Upon successful negotiation, the client issues a Letter of Award (LOA) followed by the signing of the EPC contract. The contractor is now officially responsible for delivering the project.

Key activities at this stage:

Contract execution

Mobilization planning

Kick-off meetings

Handover of site

Project commencement

Tendering Methods in EPC Contracts

EPC projects may adopt different tendering approaches depending on complexity and urgency:

Open Tendering: Anyone can bid—ensures maximum competition

Selective Tendering: Only pre-qualified bidders are invited—common in high-value EPC projects

Negotiated Tendering: Direct negotiations with a single contractor—useful in time-sensitive or specialized projects

Two-Stage Tendering: Technical and commercial tenders submitted separately to ensure quality-first evaluation

Best Practices for EPC Tendering Process

To ensure efficient and fair tendering, stakeholders should follow these best practices:

Define clear evaluation criteria in the ITT

Ensure transparency and traceability in documentation

Allow sufficient time for bid preparation

Encourage contractor feedback during the clarification stage

Avoid unrealistic timelines and cost expectations

Involve legal, technical, and commercial experts in evaluation

Common Challenges in EPC Tendering Process

Even with detailed planning, EPC tendering may face hurdles such as:

Ambiguities in technical scope

Incomplete or error in site data

Misaligned risk allocation

Unrealistic cost expectations

Delays in bid evaluation

Disputes during negotiation

Addressing these hurdles in the early stage can help in the elimination of cost overruns and legal conflicts later in the project lifecycle.

How Carbyne Infrastructure Manages EPC Tendering

At Carbyne Infrastructure, we bring deep expertise to both sides of EPC contracts—as a contractor and a strategic partner. Our tendering process is built on:

Clear documentation and project planning

Smooth coordination between design, procurement, and execution teams

Clean & clear bidding process streamlined with client expectations

Risk-optimized solutions specially developed for infrastructure, road, and industrial projects

Our goal is clear: deliver excellence right from the first level of execution.

Conclusion

The tendering procedure in EPC contracts or agreements is not just a procurement formality—it’s about mitigating successful projects. From defining scope to awarding the contract, every step must be handled with clarity, strategy, and alignment. When we follow the right path, tendering leads to lowering the risk possibilities, optimizing costs, and on-time delivery of the project.

If you’re planning a project or evaluating EPC partners, understanding this procedure gives you the sneak peek.

Need help with EPC execution or project consultation?

Talk to our experts at Carbyne Infrastructure—where commitment meets capability.