Tendering: Everything You Need to Know

Tendering, in its most basic form, is the procedure whereby a company that needs products or services allows other parties to submit a proposal or bid to supply those goods or services. The official name for this invitation is a Request for Tender (RFT). The company that posts the request and calls for the products or services is referred to as the Buyer, and the company that answers to the request and offers the goods or services is referred to as the Supplier.

Tender and RFT Differences: 

RFT: RFT stands for Request for Tender, as said. This is the document or documents that the Buyer makes public in order to get answers from Suppliers. Typically, an RFT will include the following documents:

• guidelines for the tendering procedure, the conditions of the tender, and the response
• Type of tender - timetables and information Suppliers must mention in their reply
• Specifications of the goods or services the buyer is looking for are listed in the scope of the tender. Evaluation standards are listed in the evaluation criteria.
• Conditions of Contract - Specifics of the Business Agreement to be Given to the Selected Supplier

Tender: In contrast, a tender is the document that the Supplier provides in response to the RFT; it effectively constitutes an offer to provide the goods or services that the Buyer requests.

Types of Tenders: 

The term "tender" can be used to describe a variety of different requests from buyers, just as it is occasionally used to describe either the Request for Tender or the response itself. Although terms might vary depending on the sector and region, the following are some typical tender/request kinds in Australasia:

• Request for Quote (RFQ)
• Request for Proposal (RFP)
• Request for Information (RFI)
• Invitation to Offer (ITO)
• Invitation to Respond (ITR)

Reasons People Tender:

A project may be "put out to tender" by buyers for a variety of reasons, including some of the following:

• to maximize savings by engaging in healthy competition
• to make certain that significant contracts are allocated in a way that is impartial and fair
• to reduce risk by employing a strict screening procedure

Similar to this, there are other reasons for Suppliers to submit a bid, such as:

• to create an advance job pipeline in order to achieve long-term financial stability
• Tendering, a lucrative industry with an estimated annual value of $60 billion, is used to increase revenue.
• to grow their company by fostering long-lasting relationships with customers

What’s Next?

Now that you are aware of what tendering is and some other fundamental information, you can move to the next step by registering in our Tendering training courses