A call for bids, call for tenders, or invitation to tender is a special procedure for generating
competing offers from different bidders looking to obtain an award of business activity in
works, supply, or service contracts.
They are usually preceded by a pre-qualification questionnaire.
Types of calls for tenders Open tenders, open calls for tenders, or advertised
tenders are open to all vendors or contractors who can guarantee performance.
Restricted tenders, restricted calls for tenders, or invited tenders are only open to selected
prequalified vendors or contractors.
This may be a two-stage process, the first stage of which produces a short list of suitable
vendors.
The reasons for restricted tenders differ in scope and purpose.
They are called because: There is essentially only one suitable supplier
of the services or product There are confidentiality issues such as military
contracts There are reasons for expedience such as emergency
situations There is a need to weed out tenderers who
do not have the financial or technical capabilities to fulfill the requirements
Origin of the term Dictionaries explain the etymology as coming
from Old French tendre, which means "to offer".
The following false etymology is sometimes heard:
When merchant ships arrived at a port of call, they would post a notice describing the goods
they wished to buy or sell.
This notice was delivered ahead of the ship by a tender—a small boat—and hence the
process became known as tendering.
Double envelope system In an open bid or tender system, a double
envelope system may be used.
The double envelope system separates the technical proposal from the financing or cost proposal
in the form of two separate and sealed envelopes.
During the tender evaluation, the technical proposal would be opened and evaluated first
followed by the financing proposal.
The objective of this system is to ensure a fair evaluation of the proposal.
The technical proposal would be evaluated purely on its technical merits and its ability
to meet the requirements set forth in the Invitation without being unduly skewed by
the financial proposal.
Tender box A tender box is a mailbox that is used to
receive the physical tender or bid documents.
When a tender or bid is being called, a tender or bid number is usually issued as a reference
number for the tender box.
The tender box would be open for interested parties to submit their proposals for the
duration of the bid or tender.
Once the duration is over, the tender box is closed and sealed and can only be opened
by either the tender or bid evaluation committee or a member of the procurement department
with one witness.
Security deposit Registered contractors are usually required
to furnish a bond for a stipulated sum as security or earnest money deposit to be adjusted
against work done, normally in the form of Bank Guarantee or Surety.
Locating tenders Public sector organizations in many countries
are legally obliged to release tenders for works and services.
In the majority of cases, these are listed on their websites and traditional print media.
Electronic procurement and tendering systems or e-procurement are also increasingly prevalent.
A number of companies provide subscription alert services which send notifications of
relevant tender documents to the subscriber.
An array of private organisations also assist businesses in finding out about these tenders.
Cost may vary from a few pounds a week to a few hundred.
Because of the specialised language and sometimes difficult-to-grasp procedures, some organizations
also offer companies tender writing training, or do the writing for them.
Typical template contents A typical invitation to tender template in
any project has the following sections: Introduction
Project background Legal issues
Maintaining issues Supplier response required
Timetable for choosing a supplier Requirements
References
See also Construction bidding
E-procurement ERFx
Government procurement in the European Union Presales
Private electronic market Procurement
Proposal Request for proposal
Request for tender Reverse auction
Statement of work Strategic sourcing