Tender Process

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Definition / Meaning of Tender To invite bids for a project, or to accept a formal offer such as a takeover bid. Tender usually refers to the process whereby governments invite bids for large projects that must be submitted within a finite deadline.  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. Organizations 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 organization’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 Non Government Organizations 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.

Government Tendering The Indian Government, along with State and local governments, their agencies and departments, buy many goods and services from the private sector, and provide a significant market opportunity for businesses. The government market provides many opportunities to tender for a wide range of goods and services, from large procurements and projects such as Defence, infrastructure and health, to supply of stationary and cleaning contracts.Government tendering involves various guidelines and procedures, such as the Commonwealth Procurement Guidelines, to ensure that the process is conducted in accordance with ethical, fair and transparent practices. As the Government is accountable to tax-payers and the society, they ensure that the tendering process is equitable and non-discriminatory. Government procurement processes are designed to encourage competition and promote the efficient, effective and ethical use of government resources. In addition to winning new business, contracting with Government can offer many advantages to your business, including:

A valuable reference that may assist you to secure contracts in the private sector or overseas. Experience gained is a strong selling point to other public authorities. Provides a reliable source of business.

The core principle in Government tendering and procurement is achieving value for money. This does not just refer to offering the lowest price or best offer. Value for money can also be assessed by looking at factors including:  The relative risk of the proposal Fitness for purpose The performance history of the supplier All direct and indirect financial costs and benefits over the life of the procurement The flexibility of the proposal to adapt to possible change The anticipated price that could be obtained, or cost incurred, at the time of disposal. By accessing Government tenders, your business has the opportunity to gain a vast considerable amount of work from a reliable organization, offering not only contracts for work being tendered, but also an opportunity to obtain ongoing work through building relationships and establishing your business as a reputable and trustworthy supplier to government. For more information on government tendering, visit the TendersIndia website. All government business opportunities, future tenders, corrigendum and bid awarded are published on TendersIndia.

Private Sector Tendering 

There has been an increasing move in recent times for private sector businesses to emulate government departments and agencies in their practice of tendering. Many private businesses are choosing to buy their products and services by finding suppliers via a tendering process. And the types, range and amount of products and services they seek are vast and differing, thus offering opportunities to a wide range of businesses. The private sector is attracted to tendering to realise benefits including; maximising competition, providing an opportunity for a much larger pool of suppliers to make an offer, as well as having a greater choice in selecting a supplier that offers value for money. However, the private sector has the luxury of having a much more flexible tendering process, in comparison to the public sector (government). As the requirements of transparency and accountability greatly differ between the two groups, private sector companies are not required to have such stringent and prescriptive procedures. Without such tight constraints, the private sector can often make the process simpler and more flexible, and tenderers generally have fewer requirements to adhere to when submitting a tender. Often tenderers can present their offer through more individual and innovative means and are generally more readily able to meet with the company requesting tenders if clarifications or questions arise.

Whilst the tendering process may differ between Government and private sector, the two groups generally look for similar things; the core being value for money. Quality, reliability, efficiency, and added value are important factors in any tender offers that are sought after when evaluating tender submissions. Other factors include.

Authenticity and insight  Does the bidder have genuine, substantiated knowledge and experience of the sectors of activity in which the business is engaged and the factors that influence its market environment and profitability?  Partnering and synergy: Are the corporate values and policies of the business understood and supported? Is there a sense that this bidder is the one best placed to work with the client in a productive team effort? Risk and professional accountability: Has the bid addressed these concepts? Does it indicate an understanding of their significance for successful contract performance? Innovation: New ideas, fresh thinking and solutions that competitors will find it hard to match are ingredients that can win the day, but innovation needs to be both deliverable and dependable. Has the bidder taken account of the risks associated with innovation? Flexibility and responsiveness: Does the bid communicate a readiness to ‘go the extra mile' to provide maximum value in meeting the client's requirements, and a willingness to adapt methods and procedures in response to unforeseen changes in the requirements of the contract?

Overseas tendering Tendering for overseas contracts can be attractive for businesses however may well prove challenging due to the number of difficulties involved in the process. It is important to therefore approach overseas tenders with caution and develop an understanding of potential difficulties in areas such as; communication, differing jurisdiction/legal considerations, added costs, and a lack of knowledge and understanding of international markets. There are a number of benefits to overseas tendering including; opportunities to access international markets, obtain jobs and contracts from a wider pool of businesses, as well as facilitate economic and employment growth.

Tender process  

The seven main steps in the tender process: 

1. Tender process is determined:  

The organization requesting the tender will determine the type of tender that will be used, as well as what will be involved in the tender process. 

For more information, see Types of tender opportunities. 

There are four main types of tender opportunities. These include: 

Open Tendering: An open tendering process is an invitation to tender by public advertisement. There are no restrictions placed on who can submit a tender, however, suppliers are required to submit all required information and are evaluated against the stated selection criteria. 

Select Tendering: A select tender is only open to a select number of suppliers. The suppliers may be a short list sourced from an open tender or be a compilation of businesses that the organization has worked with previously. 

Multi-stage Tendering: Multi-stage tendering is used when there are a large number of respondents. At each stage in the process, the suppliers are culled to those who are most suited to the specific contract requirements.

Invited Tendering: An organization contacts a select number of suppliers directly and requests them to perform the contract, it is generally used for specialist work, emergency situations or for low value, low risk and off the shelf options, Tenders can be issued through:  Expressions of interest (EOI) - used to shortlist potential suppliers before seeking detailed offers. Request for information (RFI) - used in the planning stage to assist 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 or flexible solution is needed. Request for quotation (RFQ) - invites businesses to provide a quote for the provision of specific goods or services. Request for tender (RFT) - an invitation to tender by public advertisement open to all suppliers.

2. Request for tender is prepared:  The request for tender outlines what is required, the contractual requirements and how you should respond.

For more information, see Tender request documents.

Tender requests are invitations to suppliers to provide a competitive offer to win a contract for the supply of their products or services. There are many different terms for tender requests, and each may have slight differences, with the most common being request for tender (RFT) and invitation to tender. Other terms include request for proposal (RFP), expression of interest (EOI), and call for bids etc. The documents themselves will vary between organisation to organisation, but common elements of tender request documents include:

Description of the goods and services to be procured: this will include what the work will involve, and any technical specifications or details relating to requirements, deliverables or outcomes of the project. Conditions of tender: this stipulates the terms and requirements that must be met in order to be considered for the project or contract. There may be technical qualifications, experience, licensing, legal or financial conditions that ought to be met in order to be eligible. Evaluation criteria: this outlines how your submission will be assessed and evaluated. This should be adhered to and used as a guide when preparing your tender submission. Submission content and format: details may be provided on how you should present your submission. There may be specifications relating to length of submissions, file format, presentation etc. Templates or response forms may also be provided. It is important to use these when available, and adhere to format and presentation instructions.

Process rules and information: this may include things such as the deadline for submission; where and when it should be submitted, what should be included in the submission; for example pricing information or schedule, and person(s) to contact for clarification or enquiries regarding the tender. Conditions of Contract: Draft contract conditions: this may indicate the general or standard terms and conditions of the contract, with additions or alterations made when a winning tender is announced. This should also include any non-standard terms and conditions - these should be highlighted within the tender documents.

3. Tenders are invited:

The value, complexity and business category determine how tenders are invited.

For more information, see Identifying tender opportunities.

Your ability to identify opportunities in the competitive tender market is a crucial part of achieving success. There are a number of sources that you can monitor to find out about current and future tendering opportunities. Organisations generally only accept project tenders for a limited amount of time so you need to be prepared to capitalise on opportunities as they become available.

The first step is to identify organisations and government agencies likely to need your products and services. Once you know who those agencies and organisations are, you can work out when, where and how they are most likely to make purchasing decisions. By monitoring a list of target organisations, you can be prepared to tailor an offer that will suit the requirements of tenders as they become available.

You should contact organisations regularly to find out if there are any future tender opportunities likely to open up. Government agencies and departments often provide a list of future tenders on their websites. For example, a future tenders list will show a five-year forecast of the likely major capital and operating projects for which the agency may invite tenders. It is important to remember that unless stated otherwise, these lists are indicative only and are subject to change.

Registering with tender information service providing websites can be another great way to keep track of what opportunities are available in the tendering market. To access government tenders, you should go to the TendersIndia website. TendersIndia is a Central Source of Indian Government business opportunities, future tenders and awarded contracts. You can Subscribe with TendersIndia to receive regular updates about new opportunities that may suit your business.

To find both private and government sector tender opportunities, you can try registering with one of the many specialist tender advisory services.

Tender advisory services and online information systems are a great place to start your research. They can provide you with information about opportunities that are available and how the tendering process works. To receive the most up-to-date information, you should consider registering with tender information providers who can notify you by email about open and future tendering opportunities.

The TendersIndia website is a Central Source of Indian Government & Public Sector business opportunities, corrigendum and bid awarded list. You can use the websites search facilities to help you identify tenders which may be suitable for your business. The information listed on TendersIndia includes:

Latest Tenders Open Tenders Corrigendum Archive Tenders Bid Awards

You can also register your business profile and area of interest through TendersIndia to receive email notifications about the latest opportunities as they are advertised.

Company is an online Tender service that provides up-to-date information about business opportunities with local and state government agencies and departments. You can register to receive email notifications, access reports and find details about tendering policies and rules.

You can also visit the Company website to find more information about state contracts, tenders and other opportunities to work with the Government. You can find information about opportunities to work with other state and territory government agencies around india by visiting their specific procurement websites.

You can also research available tenders by visiting the websites of the specific organisations or government departments that you are interested in working with. This will allow you to target opportunities within certain industries or with particular organisations.

4. Suppliers respond:

You should first obtain all relevant documentation. Then:A. Attend any pre tender briefing sessions being conductedB. Clarify any uncertaintiesC. Plan your responseD. Prepare your response E. Submit your response in the right format, on time and at the right location

5. Evaluation and selection:

Each tender will be checked for compliance, and if compliant, then evaluated against the criteria specified in the tender documentation. The tender that offers best value for money will win the business.

For more information, see Tender evaluation.

Once tenders have been submitted and received, they are then evaluated. This process involves an assessment of tenders against the criteria referred to in the Request for Tender or invitation documents, as well as an analysis of the strengths and weaknesses of the submitted tenders.

Each tender will initially be assessed to determine if it complies with all requirements of the tender document, i.e.

Complies with any conditions of participation. Tender has been lodged on time. Documents are signed as required. Tender meets all mandatory requirements.

If the tender does not meet this initial check, it is deemed as non-compliant and will be excluded from further consideration.

Should your tender pass the initial compliance check then it will proceed to be considered against the tender selection criteria.

The selection criteria that your tender will be evaluated on may include:

The technical merit of your proposal, The capability of your business to fulfil the requirement including: technical and management competence, financial viability and relevant experience, The relevant skills, experience and availability of key personnel, Quality assurance requirements, and The risks or constraints associated with your offer.

It is therefore important for you as a tenderer to ensure that you adhere to requirements and meet all criteria in order to increase your chances of winning the tender. Failing to meet such criteria may result in your tender submission being deemed ineligible, and your tender may not be considered further during evaluation.

Many organisations, including Government agencies, also assess tenders based on ‘value for money'. 

Of course price is an area of evaluation, but this does not necessarily mean that the cheapest price will win the tender. The costs and benefits of your tender will be assess other factors such as:-

Fitness for purpose Maintenance and running costs Risks Warranty Quality, Environmental and safety considerations Energy conservation Disposal Value Capacity of the supplier Wider benefits to the customer Creating strategic partnerships Payments terms

Once the evaluation process is complete, a tenderer will be selected, and notified of their successful tender. Other tenderers will also be notified of their unsuccessful submission.

For more information regarding what happens after tenders are evaluated, see Successful tenders and Unsuccessful tenders.

Successful Tenders In order for your tender submission to be successfully selected in the evaluation process, it needs to meet all the requirements and criteria outlined in the invitation or Request for Tender documents, provide the best offer and best value for money, as well as demonstrate what sets you apart from your competitors.

Once the evaluation process is completed and a tender submission is selected, the successful tenderer will be notified of the outcome and awarded a contract. Terms and conditions of the contract are usually outlined in the invitation or Request for Tender documents, as well as incorporating specifications from your tender submission. In certain circumstances, some final negotiations may occur before the contract is signed and finalised.

As a contract is a legally binding document, it is important to have a thorough understanding of the terms of the contract before signing. Ensure that you fully understand your rights and responsibilities, as well as those of the organisation you are dealing with, and that you are willing and able to comply with the requirements of the contract. You may wish to seek legal advice before signing a contract.

If your tender submission was in response to a Request for Tender by a government agency, you should know that these agencies usually publish information on the outcome of the tender process. Successful tenders and details of contracts are usually published on government tendering websites. However, note that private and confidential information such as proprietary and intellectual property details should not be published.

Unsuccessful Tenders Once the tendering evaluation process has been completed, tenderers will be notified of whether their tender submission has been successful or not. If you are unsuccessful, you may be provided with a debriefing of your submission. Alternatively, you may be able to request a debriefing. 

It is a good idea to make full use of the tender debriefing as it will assist you in preparing more competitive tenders in the future. You can gain valuable feedback on the strengths and weaknesses of your submission, any areas that may need improvement, as well as how to enhance your tender submissions. It also provides you with an opportunity to ask questions and address any concerns.

Debriefings will help improve your chances of winning future tenders.If, for any reason, you have any complaints or grievances with the tender process or evaluation process, it is a good idea to raise these concerns informally at first. A good opportunity to do this is during the debriefing. It may just be a matter of a misunderstanding of how the tender process works or it may have been caused by poor communication. The debriefing will give you the opportunity to ask questions, raise your complaint, and possibly resolve the issue. Further, the debriefing may provide information on how to process and follow up a complaint, as the organisation may have procedures for reviewing tender process.

If action is not taken on your complaint, or if the actions taken are not satisfactory in your opinion, then you may wish to lodge a formal complaint to the organisation, or refer the matter to an external body such as a Commission to address your formal complaint and commence an independent review of the tender process.

6. Notification and debriefing:

When a contract has been awarded, the successful tenderer will be advised in writing of the outcome. Unsuccessful tenderers are also advised and offered a debriefing interview.

For more information, see Successful tenders and Unsuccessful tenders.

7. Contracts established and managed:

Generally a formal agreement will be required between the successful tenderer and the relevant agency.

For more information, see Managing the contract and building relationships.

Once you have been notified that your tender is successful and have been awarded the contract, it is important to meet all requirements and manage the contract effectively.

It is important to maintain ongoing and open communications and dialogue with the contracting organisation, so that you can build a strong and sustainable working relationship.  By building a relationship and having open communication channels, the chances of conflict or misunderstanding is reduced. Further, if any issues were to arise, it is easier to work through these amicably. For example, if changes need to be made to the contract, or you require an extension to meet the requirements, a strong working relationship will help make such negotiations and discussions an easier and simpler process.

In order to build a positive reputation, it is important to adhere to the contract conditions. By delivering your products and services on time, meeting all requirements, and performing to a high standard, you will build an image as a reputable, capable and trustworthy organisation. This will enhance your reputation in the market, as well as increase your chances of continuing business with the contracting organisation. If they believe that you are reliable, then they are more likely to keep your business in mind when future prospects and opportunities arise.

Organisations are more willing to work and contract with other organisations that they trust and are familiar with. If they are confident with using the services of your business, then they are more likely to choose you over other competitors. 

Further, by being a dependable business and meeting all requirements, then there is less chances for conflicts or disputes to arise, and you are less likely to face issues such as non-payment, part-payment or termination of contract due to dissatisfaction by the other contracting party.

Note that a contract is a binding document, so you are obligated to legally comply with the terms and conditions stated, and meet your responsibilities within the contract. The same goes for the other contracting party. They are also bound by the terms of the contract and are required to uphold their obligations.

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