What is tendering? Learn more about the tender process here.
Tendering is a process where are an organisation responds to a request for information or pricing related to the supply of goods and services from another organisation. Organisations typically solicit tenders from more than one organisation and will evaluate and accept tenders that meet their needs and offer the best value for money. The acceptance of a tender results in a contract between the organisations.
Whilst the names differ significantly the documents have similar characteristics. They typically include a description of the organisation's requirements or needs and a request for information about the responding organisation's experience, capability and capacity to meet the requirements or fulfill the need. In most cases a fixed price or schedule of rates is also requested.
Tendering can vary from a single page to hundreds of pages depending on the nature and complexity of the tender request. The time provided to prepare a tender response varies from as short as one week to a month or more. The cost of responding to tenders is borne by the organization tendering.
Typical characteristics of tenders are:
There is an written tender request document
Tender responses are solicited from more than one organisation
Value of the goods and or services is often substantial
Fixed time period to respond
Responses are evaluated according to pre-determined criteria
A contract is awarded to the successful tenderer
Tendering is frequently used by local , state and federal government organisations. Government policy dictates that tendering must be used above a certain financial threshold. This threshold varies from state to state and ranges from $150,000 to $200,000. Tendering is also used by private companies for substantial procurement opportunities.