What is the tender process?

By Daniil Filipenco

What is the tender process?

International development almost entirely relies on purchasing myriad items and services that can then be used to achieve concrete development outputs, be it a renewed road or a new hospital to provide a better health service. To be a part of this process, organizations and companies are required to submit a formal bid for the supply of products and services and compete with other parties also interested in winning the bid. This formal offer is presented in the form of a tender.

What is a tender?

A tender is issued as a request for participation in a project. Tendering is the procedure through which interested stakeholders are invited to bid for projects that must be completed within a specific timeframe. Governments, international financial organizations, and funding agencies are some of the stakeholders that announce tenders for various procurements.

The buyer is the organization that posts the request for the goods and/or services while the supplier is the organization that responds to the request, submits a proposal, and will deliver all that is required should it be declared to be the winner of the tender.

Most organizations have a well-defined tender procedure for projects or acquisitions, as well as processes in place to control the invitation, assessment, and ultimate selection of vendors. This guarantees a fair and transparent selection procedure.

Due to the fact that a tender is a public and transparent process, laws have been enacted to control the process to ensure that bidders compete fairly. Corruption and nepotism, for instance, may thrive in the absence of legislation.

See also: Top reasons for sanctioning firms in international development

Who’s the Tenderer?

Different organizations employ multiple variations of the tendering process in numerous businesses across all sectors, be it public, private or non-profit.

However, tendering in its classic form is more popular across specific areas.

In most circumstances, the authorities or non-profits that spend public funds are required by law and/or procurement policies to make use of the public tendering process for contracts worth more than a certain amount in order to ensure a fair and unbiased procedure.

What are the advantages of tendering?

  • Transparency and fairness – all qualified suppliers are provided an equal opportunity to compete
  • Well-established, widely accepted, and well-understood procedures that set the same rules of the game for everyone
  • Traceability – there’s a ‘paper trail’ clarifying what was spent on what and who approved this
  • Competitiveness – providers are aware that if they do not deliver their best offer, they will not win the contract
  • Homogeneity – it makes comparing offers easier

How does a tender work?

Since it’s a two-player game, both the buyer and the supplier need to take certain steps to enable the tender process to be efficient. Here are some of the steps:

Buyer:

  • Forecast the opportunity (publish a future procurement opportunity to give suppliers early notice of procurement plans)
  • Publicize (advertise) the procurement opportunity
  • Allow for a clarification period (for Q&A sessions with suppliers)
  • Open responses to the tender
  • Assess the mandatory conditions (ensure bidders meet the minimum requirements)
  • Evaluate the tender submissions and score all responses against the weighted criteria
  • Award the contract to the first preferred supplier

Supplier:

  • Learn everything about the donor (buyer)
  • Monitor early intelligence information and forecasts on DevelopmentAid
  • Find tender opportunities on DevelopmentAid
  • Evaluate the competitors and consider local partners
  • Begin working through the bid paper
  • Write, review and submit a bid

When the supplier has completed all of these stages, if they are successful they will more than likely be invited to meet with the buyer or to give a presentation.

Experienced bidders are always aware of the tenders or even the intention of a tender by international donors. How do they do this? There are certain tools and instruments that assist project and acquisition managers to be more efficient. Tenderwell App is one them. Read more in our latest article here.

Short tips on how to win a tender

1️⃣ Keep it simple and concise

  • Check your spelling. Use pictures to help explain more complex ideas.

2️⃣ Always remember to

  • Sign and submit tender paperwork (Terms and Conditions, Declaration of Interests and so forth)
  • Select appropriate references. It is important to ensure that references are as relevant to the bid as possible
  • Have a plan B by undertaking any necessary preparation to eventually offer a lower-cost or higher-quality alternative
  • Double-check the work for errors to ensure it appears professional

3️⃣ Figures are crucial

  • Develop a pricing strategy. For instance, you might consider making very little out of your first task or may consider bidding on a contract with limited competition
  • Provide accurate quotes

4️⃣ Concluding remarks

  • Always consider the deadline
  • Ask for feedback! Always seek information that can help you to improve your future bids
  • It isn’t all about the tender. The bid starts once you contact the buyer. Make every email and phone conversation important. In addition, you might also consider asking questions that will assist you with your tender application.

Final word

For a donor organization, tendering is a crucial tool to obtain reasonable prices and the best deal for a development project. For a supplier working in the aid sector, it is the key mechanism to secure contracts. There are no certainties or ‘magic’ tricks for winning a tender. However, an organization can increase its chances if it tenders to the highest possible standards using highly efficient instruments such as the Tenderwell App.