The 4 main types of tenders are:
establish themselves in a new market.
Open tender
Selective tender
Negotiated tender
Single-stage and two-stage tender
Open tender
Open tendering is the main tendering
procedures employed by both the government
and private sector. Open tendering allows
anyone to submit a tender to supply the goods
or services required and offers an equal
opportunity to any organization to submit a
tender. This type of tender is most common for
the engineering and construction industry.
Open tendering provides the greatest
competition among suppliers and has the
advantage of creating opportunities for new or
emerging suppliers to try to secure work.
However, not all those who bid may be suitable
for the contract and more time is required to
evaluate the tenders.
Selective tender
Selective tendering only allows suppliers to
submit tenders by invitation. These suppliers
are those who are known by their track record
to be suitable for a contract of that size, nature
and complexity required. Selective tendering
gives clients greater confidence that their
requirements will be satisfied. It may be
particularly appropriate for specialist or
complex contracts, or contracts where there are
only a few suitable firms. However, it can
exclude smaller suppliers or those trying to
Negotiated tender
Negotiated tenders are extensively used in the
engineering and construction industry
commencing from tendering till dispute
resolutions. Negotiating with a single supplier
may be appropriate for highly specialist
contracts, or for extending the scope of an
existing contract. Costs are reduced and allow
early contractor involvement. Since the
contractor is part of the project team at a very
stage of the project, this results in better
communication and information flow.
Single-stage and two-stage tender
Single-stage tendering is used when all the
information necessary to calculate a realistic
price is available when tendering commences.
An invitation to tender is issued to prospective
suppliers, tenders are prepared and returned, a
preferred renderer is selected and following
negotiations they may be appointed.
Two-stage tendering is used to allow early
appointment of a supplier, prior to the
completion of all the information required to
enable them to offer a fixed price. In the first
stage, a limited appointment is agreed to allow
work to begin and in the second stage a fixed
price is negotiated for the contract.
Other types of tender include serial tendering,
framework tendering and public procurement.
Serial tendering involves the preparation of
tenders based on a typical or notional bill of
quantities or schedule of works. Framework
tendering allow the client to invite tenders from
suppliers of goods and services to be carried out
over a period on a call-off basis as and when
required. Lastly, public procurement is for
public projects held by the government.
Invited Tendering
An organization contacts a select number of
suppliers directly and requests them to perform
the contract, it is generally used for specialist
work, emergency situations or for low value,
low risk and off the shelf options,
Tenders can be issued through:
Expressions of interest (EOI) - used to shortlist
potential suppliers before seeking detailed
offers.
Request for information (RFI) - used in the
planning stage to assist in defining the project,
however, not used to select suppliers.
Request for proposal (RFP) - used where the
project requirements have been defined, but an
innovative or flexible solution is needed.
Request for quotation (RFQ) - invites businesses
to provide a quote for the provision of specific
goods or services.
Request for tender (RFT) - an invitation to
tender by public advertisement open to all
suppliers.
The documents themselves will vary between
organisation to organisation, but common
elements of tender request documents include:
Description of the goods and services to be
procured: this will include what the work will
involve, and any technical specifications or
details relating to requirements, deliverables or
outcomes of the project.
Conditions of tender: this stipulates the terms
and requirements that must be met in order to
be considered for the project or contract. There
may be technical qualifications, experience,
licensing, legal or financial conditions that ought
to be met in order to be eligible.
Evaluation criteria: this outlines how your
submission will be assessed and evaluated. This
should be adhered to and used as a guide when
preparing your tender submission.
Submission content and format: details may be
provided on how you should present your
submission. There may be specifications
relating to length of submissions, file format,
presentation etc. Templates or response forms
may also be provided. It is important to use
these when available, and adhere to format and
presentation instructions.
Process rules and information: this may include
things such as the deadline for submission;
where and when it should be submitted, what
should be included in the submission; for
example pricing information or schedule, and
person(s) to contact for clarification or
enquiries regarding the tender.
Conditions of Contract: Draft contract
conditions: this may indicate the general or
standard terms and conditions of the contract,
with additions or alterations made when a
winning tender is announced. This should also
include any non-standard terms and conditions
- these should be highlighted within the tender
documents.