What is a tender?

Tenders, in general terms, are a formalised offer to perform in return for payment for the supply of goods and/or services. In order to win a tender, you should be aware of and understand the tendering requirements and processes to determine what the buyer will expect. There are a number of different tender processes as follows.

Open tenderPublic advertisement with no restrictions as to who can apply (as long as the set criteria are met).
Closed tenderAdvertised 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 tenderSelected suppliers are contacted to bid or be issued with work (usually specialist; emergency or low-value work).

Tenders can be called a number of different names that reflect the respective purpose of the tender as follows.

EOI – Expression of Interest           Used to shortlist potential suppliers (to check capabilities) before asking for bids. It’s part of a multi-stage process. This can also be called ‘Invitation to Register (ITR)’ or ‘Registration of Interest (ROI).
RFI – Request for InformationRFI is not used to select suppliers but to obtain more information during the planning stages of establishing a project scope.
RFP – Request for ProposalRFP is used where the project scope is defined but is looking for innovative or flexible solutions.
RFQ – Request for QuotationThis is the actual request for products and/or services for a defined scope of work.
RFT – Request for TenderThis is similar to an RFQ, however, on a larger scale.
Panel ArrangementThis is used to look for a short list of suppliers with certain capabilities for future tender bids.
Multi-Use ListThis is a pre-existing supplier list for future tender bids.

Government organisations undergo a strict process for sourcing and selecting contractors to undertake work using public funding to ensure that the funding is 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. 

Although the tender process is a competitive one, it is designed to be fair, transparent and impartial. Selection is based on meeting specific criteria set out in the application and presenting the most desirable solutions to the buyer. An organisation that can demonstrate established project management abilities, clear communication channels, accountability for quality, 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 factors in place.

It can take a laborious effort to apply for tenders, however, there are ways to streamline the process. Business Kitz provides a Tender Kit that offers comprehensive and valuable guidance, tools and templates to help you to be as prepared as possible for all future tender submissions. These easy-to-use templates set out a clear and formal structure so that you can convey the skills and expertise of your business in a concise and informative manner.

Alternatively, if you are requiring further help our trusted partner Legal Kitz Pty Ltd specialises in Australian business tender reviews. Click here to book a FREE consultation with one of our highly experienced solicitors today or contact us at info@legalkitz.com.au or by calling 1300 988 954. 

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