A contractor’s ability to prepare a competitive bid for a construction tender is crucial for its survival on the market. Besides, in a public construction project, one of the main criteria utilized by the authority in charge of selecting the most suited contractor is the tender price of the contractor. Contractors must competitively bid for most of their work while dealing with risks and uncertainties connected with bid submission. Improving the efficiency and effectiveness of local contractors in pricing tenders is very vital to deliver projects within the contractual time, quality, and cost. The objective of this study was to examine the tender pricing practices of local contractors in Amhara region, identify gaps and shortcomings, analyze factors affecting tender pricing and develop recommendations and strategies for improved industry practice. Data were collected through structured questionnaire surveys from construction industry professionals in the region. A tola of 73 local contractors engaged in building, water and general civil works were selected and interviewed. The findings showed that detailed analysis for all elements of a single work items is reported to be the most important and mostly used tool in bid estimating practice. Using the price for the same item rate from a previous project is found to be the second most used cost estimation practice by contractors. However, most contractors rated the performance of local cost estimation practices as “bad.” Major reason mentioned for low performance include lack of competent and experienced professionals and insufficient information provided of drawings and specifications by the designers. Most of the local contractors have database but not organized and only few update their construction database regularly (yearly or twice a year). The majority update the database when estimating new project. The study pointed out that most contractors consider riskpricing in their tender less than it should be or some of them even no estimation for risk at all. Key words: Pricing factors, tender pricing, tender, contractors.