What is a Tender? Meaning and process.

what is a tender

Tenders, in general terms, are invitations to quote for government jobs. There are a number of different tender processes, including:

Open Tender

An open tender is a public advertisement with no restrictions as to who can apply (as long as criteria is met).

Closed Tender

A closed tender is advertised to a targeted group of suppliers (who have usually been selected from an open tender process).

Multi-Stage Tender

A design may be requested prior to a call for bids for a project, or a culling process occurs for a large volume of submissions.

Invited Tender

Selected suppliers are contacted to bid or be issued with work (usually specialist; emergency or low value work).

Tenders can be called a number of names and each has a different meaning:

EOI – Expression of Interest

Used to shortlist potential suppliers (to check capabilities) before asking for bids. It’s part of a multi-staged process. Can also be called ‘Invitation to Register (ITR)’ or ‘Registration of Interest (ROI).

RFI – Request for Information

Not used to select suppliers but to obtain more information during the planning stages of establishing a project scope.

RFP – Request for Proposal

Used where a project scope is defined but looking for innovative or flexible solutions.

RFQ – Request for Quotation

This is the actual request for products and/or services for a defined scope of work.

RFT – Request for Tender

Similar to an RFQ but on a larger scale.

Panel Arrangement

Used to look for a short list of suppliers with certain capabilities for future tender bids.

Multi-Use List

A pre-existing supplier list for future tender bids.

the tender process; how the tender process works in regards to both the public and private sectors

The Tender Process

Government organisations undergo a strict process for sourcing and selecting contractors to undertake work using public funding to ensure that the funds are spent efficiently and appropriately. The private sector undergoes similar tender processes to select their contractors because they are obligated to do so under their funding agreement with the government and/or the government tender process is an effective way for them to also source competitive bids.

The tender process is a competitive one and is designed to be fair, transparent and impartial. Selection is based on meeting specific criteria and an organisation that can demonstrate established project management abilities, clear communication channels, accountability for quality and timely delivery and risk management strategies is looked upon more favourably than an organisation that can merely do the job with none of the other strategies in place. It can take a laborious effort to apply for tenders.

However, there are ways to streamline the process. The Business Kitz comprehensive Tender Kit provides valuable guidance, tools and templates to help you to be as prepared as possible for future tender submissions.

Let us know how your business handles the tender process in the comments, or leave a question and we’ll get back you shortly.

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