Types of tenders and tendering process

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2018-05-06

A tender can be described as an offer to perform some task or supply goods at a fixed price. In the initial step of this tendering process, the contractors are invited to submit sealed bids for construction or for the supply of specific and specifically designed services or goods during a specific timeframe. The tender process is designed to ensure that the work to be done for the government or a particular client is done in a fair way. For example, certain places may have various procurement policies which guide the government of that place on how to make a decision and which tender to accept. Although as we know a process is a very important decision on which tender to bid or accept, it is not the only factor to be taken into account.

Once the client/government accepts a tender, it is binding on both parties. This means that the company or a person who has won the tender has to provide goods and services in the manner agreed to and at the price offered and the client will have to pay the agreed price in the agreed time. Once accepted tender is a binding contract.

Types of tendering

The process of tendering involved some kind of complicated procedures and processes. Before any tendering process can be done, a professional team must be ready with all the tendering documents checked and approved. The source of funding must also be available and the project financing should be put in place. The processes in the subsequent stages should be established with the express consent of the employer to ensure the process of tendering will go smoothly. The type of tendering an employer must go with depends purely on the nature on contract, the complexity in the construction, the expertise needed and various other reasons. The government projects are usually made open tenders in order to ensure that the procurement and works to be done in a fair manner without prejudice. The various types of tenders generally used are: open tender, selective tender, negotiated tender, serial tender and term tendering.

— Open tendering

Open tendering is the main tendering procedure employed by both the private sector and the government. The client advertises the tender offers in the local newspaper along with the key information of the proposed works and inviting interested contractors. The tender notice includes an invitation to treat, a mere request by the employer for a suitable contract to submit their bids or offers.

— Selective tendering

Selective tendering is the one alternative developed to address the limitation of the open tendering procedure. Here a short list of contractors is drawn up and they are invited to submit tenders. The purpose of this tender is to improve the quality of bids received to ensure that the contractors with necessary experience are given a chance to submit the necessary bids for the specific reason of the employer. This makes the tendering process more manageable and less burden for the parties involved.

— Negotiation tendering

This type of tendering is widely used in the engineering and construction industry commencing from tendering until the resolutions of the disputes, which comes under the pre-contract negotiations and the post-contract negotiations. Usually, a single contractor is included but can be scaled into 3 contractors.

— Term tender

Term tendering is normally used on projects that need huge maintenance. The contractor will be asked to cover a range of different buildings in different locations. It is often limited to a fixed time scale although the needs of the client may require this to be extended. This is generally a standing offer to undertake a loosely defined extends of work usually within a fixed amount of time.

Nowadays large companies usually have to handle more than one procurement needs by applying different kinds of information systems developed by various suppliers. This will become cumbersome and inevitably long in the conventional tendering system. In order to realize better costing and increase efficiency, replacing the manual paper-based tender procedure with the electronic facilitated system has become an essential element in the process re-engineering. With an e-tendering system that is highly automated, tender specification, tender advertising, tender aggregation as well as the evaluation and placing of the contract can be prepared with ease.

If you would like to learn more about tender management and e tendering process please do not hesitate to contact us and for more resources, about bid management and tender writings head over to our blogs section.

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May 2nd, 2018 by