What is tender?

Companies often wonder what is a government tender and how they can bid in them? This article shall throw some light for beginners in understanding what is a government tender. A government tender, also known as a government solicitation, is a formal invitation by a government or public sector organization for suppliers or contractors to submit bids for the provision of goods, services, or construction work. A good way to explain what a government tender means is to look at it as an advertisement published by the buying authorities when they want to buy anything. Government tenders are a common method used for conducting business for public entities to procure goods and services from private businesses in a transparent and competitive manner.

There are several points one needs to know while understanding what a government tender is. A government tender is released primarily to increase competition amongst suppliers for the products so that the government entities may use the best available products in the market at the most affordable prices. It is also used to create healthy competition in the market so that public entities get the best products and services available in the market. It is also used to promote local businesses as well as exports as tenders are released with an international competitive bidding nature so as to attract bids from all over the world. It also helps in establishing cross border trade relationships.

What are the different types of tenders?

Government tenders happen for different types of products and services. A tender is released when a public entity aims to buy any product/service or consultancy. Tenders can happen many different products/services and even consultancies required by governing bodies on key issues. Typically, government tenders are categorized into two major categories viz. International Competitive bidding and Domestic competitive bidding. As per their names, an international competitive bidding (Hereafter referred to as ICB) allows companies from all over the world to bid in that project whereas a Domestic Competitive bidding (DCB) tender only allows domestic companies to participate. The scope of the tender is decided by the authorities. For products where logistics can be expensive, tenders are generally released with a Domestic competitive bidding type where as in cases where technology transfer is required, an international competitive bidding type is posted. Tenders can sometimes also be of restricted type which means only companies from a select geographical region or any selected criterion may be able to participate. This is done in cases where the government authorities have already selected a pool of suppliers from where they would want the product and want to create a competition amongst them. The other types of tenders can be negotiated tendering, framework agreement, open tendering, request for Information, request for quotations, request for proposals etc. The different types of tenders are notified by the authorities at the time of releasing a tender so that the bidder or the company who aims to participate understands the scope of the project.

Contact Tender Impulse Today.