WHAT IS TENDER & ITS PROCESS

What is Tender : 
Tender is the process for making an offer or bid or expression  interest in response to request for tender.
 Tender is a platform generated to offer a competition between different bidders offering same work, supply or service so that the quality work will be obtained at reasonable cost. However such process must ensure that there are no loopholes in the system so that any individual has a back door entrance or having an underhand connection. Generally tenders are published by Government sector however huge Private sector also publishes tenders for their required work service or supply.

Types of Tender:

Open Tendering : A bidding process that is open to all qualified bidders and where the sealed bids are opened in public for scrutiny and are chosen on the basis of price and quality. Also called competitive tender or public tender.

Negotiation Tendering or Limited Tender : This type of tendering is widely used in the engineering and construction industry commencing from tendering until the resolutions of the disputes, which comes under the pre-contract negotiations and the post-contract negotiations. Usually, a single contractor is included but can be scaled into 3 contractors.

Term Tender : Term tendering is normally used on projects that need huge maintenance. The contractor will be asked to cover a range of different buildings in different locations. It is often limited to a fixed time scale although the needs of the client may require this to be extended. This is generally a standing offer to undertake a loosely defined extends of work usually within a fixed amount of time.

Multi Stage Tender :  Multi stage tender is used when there are large number of bidder. At each stage in the process,  

PROCESS FOR TENDERS

The Tender Process is Determined : The organization which requires the tender will determine the type of tender that will be used, and what will be involved in the online tendering process. 

Expressions of Interest(EOI)- used to shortlist potential suppliers before seeking detailed offers.

Request for information (RFI)- used in the planning stage to help in defining the project however not used to select suppliers.
Request for proposal (RFP)-used where the project requirements have been defined, but an innovative and flexible solution is required.

• Request for Quotation(RFQ)-invites businesses to provide a quote for the provision of specific good or services.

• Request for tender-an invitation to tender by public advertisement open to all suppliers.

Tender Process in Government Sector 

In most countries they are required by law to publish or announce their tenders in one or more public media such as newspapers, trade magazines and more and more, on their own websites. For sourcing purposes, Government Departments usually keep a list of approved suppliers which is used to invite bids.

Government and local authorities may ask for “Expressions of Interest” to allow other suppliers to be added to their list of potential suppliers before they issue formal documents. Some Governments are now issuing electronic tenders but it is still regular practice for them to ask bidders to submit their bid in hard-copy form after Award of Contract.

Tender Process in Private Sector 

Both listed and non-listed companies have more latitude to use a customized sourcing process that suits their industry and their organization. They are not bound by the requirement to spend a given budget in a defined financial year and are therefore free to schedule their buying process to suit business cycles.

Private companies wishing to be seen as ethical and honest adopt what is accepted internationally as best practice. One area where they may not achieve this fully is in the providing details of evaluation criteria and weightings to prospective bidders. This is standard practice in government and generally regarded as the fairest and most transparent way to award contracts. Private companies are often reluctant to disclose their weightings in advance.

Selecting a list of bidders to be involved in the tender process is not subject to any limitations so private companies can limit who they send their documents to as they see fit. They are also not bound to publicly publish details to whom the contract was awarded or even to formally advise the unsuccessful bidders.

Managing and completing their tendering process in less time than governments is really achievable when they are not bound by tight rules. Price negotiation between the sourcing company and short-listed bidders is normal practice which is limited by certain protocols in government.