Once you've found the tender suitable for your business to take part in, you may be asking: What is the tender process? We've identified eight steps to a standard tender process. The shortest part of the tender process is the time you have to respond to the Tender.The tender process or the tendering process, from the preparation of tender request documents to awarding a contract, can take anywhere from a few months to a few years. Some tenders are issued as ‘future tenders’. You can search for these at Australian Tenders by selecting future tenders in the advanced search. The earlier you get involved in the tender process the greater your chances of winning. These steps reflect the standard tender process:
Step 1: Buyer identifies need
The first step in the process is the customer identifying a need or requirement that is not currently being met by their organisation which they cannot fulfil themselves or no longer wish to do themselves. A budget may then be established and a procurement process identified. A number of government organisations publish their budgets and go so far as to publish a forward procurement schedule or pipeline. The link below from the Queensland Government Procurement Pipeline is a typical example of this.
Step 2: Industry Consultation
Most buyers will consult with potential suppliers either formally or informally during the tender process. The last thing they want is a zero-response rate to their tender or to only get quotes for more than their budgeted costs. There are a number of ways buyers may conduct industry consultation:
They may speak to potential suppliers by phone or in person.
They may ask their preferred supplier for a quote and establish a budget and draft your tender documents based on this quote. If you are the preferred supplier in this scenario you have an obvious competitive advantage.
They may issue an Expression of Interest (EOI) asking potential suppliers to provide details of their solutions to help them further refine their needs and requirements. They may use this process to shortlist potential suppliers for a subsequent tender. They may hold an industry briefing.
Step 3: Draft Tender Documents
Buyers may draft tender request documents themselves or engage specialist consulting firms to draft tender documents on their behalf. It may be the consultants who conduct the industry consultation discussed above. In some cases, draft tender documents are issued to potential suppliers for feedback.
This gives you, the supplier, a possible opportunity to influence the tender documents in a way that improves your chances of winning. At this stage in the tender process buyers may broadcast their intention to issue the tender documents by way of a notice to the market. For example, the Western Australian government issues an ‘early tender advice’ and provides the estimated advertising date of the tender. At Australian Tenders we record these as future tenders and alert you to them via our tender alert service.
Step 4: Issue Request for Tender documents
After spending months preparing the tender documents the customer will formally issue the Request for Tender documents and ask for responses usually within weeks. This turnaround time might seem short if you were previously unaware of the tender, so keeping an eye out for future tenders where possible is worth it. Future tenders are sent out to those with alerts set up for newly-published tenders at Australian Tenders. Using a tender notification service can offer you a competitive advantage. When you download the tender documents, you will usually be required to register with the organisation who issued the tender. This enables them to send you any addendums or their response to any questions raised.
Step 5: Prepare a tender response
During the tender response phase, you will have the opportunity to ask the buyer questions in writing and may be invited to attend a briefing session or site visit. There is almost always a deadline for asking questions.
Briefing sessions might or might not be compulsory, either way we recommend that you attend: The knowledge gained can be invaluable, and furthermore you will have opportunity to meet the buyer, your potential customer, and identify competitors. The buyer may issue changes to the Request for Tender documents during this phase in the form of an addendum.
Lodge your tender response
The Request for Tender or quote (RFT or RFQ) will have a closing date and time and will require the response to be lodged electronically or printed and lodged at their office. Make sure you lodge in the requested format before the closing date and time. When lodging via upload or email, take into account the time it might take for the upload. Don’t leave it until the last minute as these deadlines are always strict.
Step 6: Tender Evaluation
Once you have lodged a tender response the evaluation process commences. Government tenders normally use a panel of people to evaluate the tender responses. It can be useful to know who is on the panel. The first step for the buyer in the evaluation process is to identify which tenders are conforming or non-conforming. If for example you failed to provide all the information requested then your tender response could be deemed non-conforming and may not even be evaluated.
Conforming tenders are then evaluated against the evaluation criteria in the tender documents. During the evaluation process you can expect to receive written questions from the buyer. This is your chance to shine by responding promptly and in detail. If you do not receive any questions during this phase it is possible that your tender response is not under serious consideration. Once the evaluation is complete a short list will likely be formed and those on the short list will be invited to undertake a presentation or an interview.
Step 7: Tender Award
If you are successful the buyer will likely write to advise you that they have accepted or recommend your tender. At this point you are the ‘Successful Tenderer’ or if there is further approval required such as approval from a government minister, you might be the ‘Preferred Tenderer’.
Once the tender is awarded, majority of the time, proposals and informal tenders normally involve some negotiation. The 'Tender Negotiation' step is when the preferred supplier and Issuer reviews some elements of the contract before the signing the contract. Potential areas for negotiation are: the term of payment, warranties and guarantees, completion dates, maintenance, repairs or after-sale services, compensation for failure to meet specific requirements, documents required and more.
Step 8: Contract Signature
The final step in the process is to sign the contract, which should be a simple formality. The contract that you are expected to sign is normally provided as part of the Request for Tender (RFT) documents which you have read carefully and fully understand. You are now in a binding contract and are obligated to sign the contract within the nominated period. There might be some contract details that are still to be negotiated in which case you may then enter a contract negotiation phase to finalise the details of the contract.
You have signed the contract and now it’s up to you to deliver. It is likely that you have a tight delivery time frame and face liquidated damages if you fail to deliver. If you deliver the chances of winning the next tender are greatly improved. If not, the chances are significantly reduced.
You can read in more detail about the tendering process in our Introduction to Tendering eBook.