Introduction to Tendering
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What is Tendering?
Tendering is the process of making an offer, bid or proposal, or expressing interest in response to an invitation or request for tender. Organisations will seek other businesses to respond to a particular need, such as the supply of goods and services, and will select an offer or tender that meets their needs and provides the best value for money.
Tender request documents; also referred to as invitations to tender, Requests for Tender (RTF), Requests for Proposal (RFP) etc outline what is required, that is, what the requesting organisation's needs are. These documents also outline the particular requirements, criteria, and instructions that are to be followed.
Future tenders are generally widely advertised to offer opportunities to a number of suppliers, encourage competition and provide a greater pool of offers to select from.
Interested suppliers will then prepare a tender; the documents that outline the offer that they are making, and will include pricing, schedules as well as their eligibility for the project or procurement. They will outline their advantage over competitors; provide information on qualifications, competencies and experience. Further they have to demonstrate how their bid offers the best value for money.
The submitted tenders are then evaluated with regard to defined criteria. In a normal tendering situation, this process should be conducted fairly and honestly, and in a manner that is free from bias or favour. The offer that best meets all of the requirements outlined in the request, and provides value for money should win the contract.
The tendering process is generally utilised for procurements or contracts involving substantial amounts of money. Tendering is utilised by:
- Government departments, offices and agencies
- Private sector companies and businesses
- Overseas markets and businesses
While the concept of tendering may seem daunting at first, it can be easily tackled by having a plan of ‘attack'. When becoming involved in a tendering process, it is important to understand your business' suitability for the project; whether your business' current situation will allow for you to tender, as well as your ability to manage the contract if you are successful in winning the tender. By understanding these points and ensuring you can demonstrate that you are able to meet the criteria and offer a competitive bid, you will increase your chances of success.