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All the tender terms you need to know!

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blog hero - tendering termsWhile tendering can present many opportunities for your business to grow and gain experience, it is often seen as a complicated process filled with industry terms that are hard to define. That's why it is our mission to help you understand some of these confusing terms and get ahead of your tendering competition! Can't find the word you're looking for? Check out our glossary for even more definitions and acronyms to get you through the tendering process.
What is "procurement"?
Procurement is the process of obtaining or buying goods and services. Procurement begins with the preparation and processing of the request and ends when the contractor receives payment for works. Procurement is the complete process, whereas tendering involves only "going to market" with the need and selecting a contractor.

What is a bid?
A bid is a document you submit to the buyer claiming your interest in supplying goods and/or services to the organisation that released the tender opportunity. A bid includes your quote, mandatory documentation and client-specific requirements. Check out our To Bid or Not to Bid blog!

Who's Who?
A Buyer is someone who intends to buy goods or services. We like to think of it as buyers are shopping for you! They buyer is your customer. The term “buyer” can also include issuers or procurers. Issuers/procurers are the organisation that releases the request and evaluates the bid to fulfil the company’s need.
You are the supplier! The supplier is the person or organisation that wants to supply the goods and/or services to the buyer. The supplier submits the tender/bid to the buyer and hopes to win the request. 
Preferred Supplier: 
A preferred supplier is a company whose products, rates and terms have been previously negotiated and approved by the buyer. You can become a preferred supplier by bidding on a Preferred Supplier Arrangement tender.
This is what you want to become! Contractors are the suppliers whose bids have been accepted by the buyer. If you win the tender, you become the contractor!
A subcontractor is a supplier that carries out work for the primary contractor as part of a larger project. This is most often seen in the building and construction industry, where large construction organisations will win the project, and divide the specific works among smaller suppliers.


Tender Types
What is a Request For Tender? (RFT) 
A request for tender is the tender you see advertised. It is the one of the methods of  requesting offers to supply goods and/or services. An RFT will include documentation detailing what the buyer requires from the supplier often referred to as a scope of works.  In most cases if your bid wins the RFQ then a contract will be signed by both parties.

What is a Request For Quotation? (RFQ)
A request for quotation is a way of inviting bids for the supply goods and/or services involving more simple documentation than an RFT. These opportunities are great for buyers that have already defined the scope of work, and the supply of materials and equipment and are just seeking price information from the supplier. In most cases the purchase order is what forms the contract with the Supplier.

What is an invited tender?
An invited tender is an RFT or RFQ that is only available to selected suppliers. Buyers will determine their invitation list either through an Expression of Interest (EOI) tender, preferred supplier list, or through pre-existing relationships or reputation. Suppose you have been included in the invitation list; you will receive an Invitation to Tender (ITT).  The ITT, RFQ and/or RFT  provides background information, rules of tender, contract specifications, information required and a draft contract.

What is a Panel Arrangement?
A Panel Arrangement (also known as a panel contract or scheme) involves two or more suppliers and is a procurement “shortcut” for buyers. A Panel Arrangement ensures that pricing, terms, and requirements are previously agreed to allow for a quicker procurement process for the buyer. In winning these tenders, you become a Preferred Supplier.

What is a subcontractor request? 
A subcontractor request is a type of tender that focuses on more specific work within a project. Subcontractors are requested from buyers or primary suppliers so they can focus on the larger aspects of major project. These requests can also be used to seek pricing information from smaller suppliers prior to the winning of the larger project to quote an accurate cost, however, Australian Tenders does not publish subcontractor requests that are solely for quotation. Subcontractor requests present an excellent means of providing suppliers with opportunities to build relationships and skills within large contracts without competing to win these high-value tenders independently. 

What is a tender notification?

A tender notification is an email notice of tenders, where you can receive regular updates on the opportunities available in your industry. A few organisations (such as Australian Tenders) combine all government and private tenders in one search function, which allows for thorough and accurate notices of tender opportunities.

Australian Tenders provides this service at the highest value on the market, and your account manager makes sure your alerts are set up correctly, so you never miss a tender.  These services can be handy for making sure you see all opportunities for your business and monitoring your industry market. Would you like more information on how tender notifications can help you stay ahead of your competition?


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