Tender - what is it? The meaning of the word and how it is applied in practice

2024 Author: Howard Calhoun | [email protected]. Last modified: 2023-12-17 10:16

Today, almost all products on the market are purchased on a tender basis. A tender is, in fact, a competition, according to the results of which the Customer company selects a Supplier or Contractor who is ready to offer the most favorable terms of cooperation: low price, original solutions or unsurpassed professionalism.

So you have decided to apply for a tender. This means that you will have to carefully compose an offer, show the Customer that you really know your market segment well and have sufficient work experience.

Tender vs. Auction: what's the difference?

Here you may have a completely logical question: how does this scheme for selecting Contractors and Suppliers differ from others?

Firstly, all auction participants can get acquainted with the offers of their competitors, find out at what price they are ready to work. That is, there is always the opportunity to adjust your own offer in such a way as to stand out favorably from other companies. Here is the tenderit is, first of all, the lack of such openness. All participants submit proposals, so to speak, “in a closed envelope.”

In fact, the content of the documents is completely hidden from competitors and is available only to a special commission.

What is a tender document?

The customer company and the participants are preparing a package of documents containing the terms of the ongoing competition and the future contract.

The documentation must contain two parts:

• Technical. Includes a description of the main terms of the contract, general data on the object of the auction, information cards indicating the procedure for preparing and submitting bids.
• Commercial. Contains prices and a scheme for determining them, payment schedules and conditions, sources of financing, bank guarantees, as well as requirements for certain types of insurance.

It is important to consider that in each case the tender committee determines the content on an individual basis. Competent preparation of documents is of great importance. It is best if an experienced tender specialist supervises the entire process. This is important, because your future success depends on at least 50% of how competently all the necessary documents are drawn up and prepared. After all, without having experience working with your organization, the Customer will be able to rely solely on the papers that you provide.

Success secrets for those who are going to participate in the tender

There is an opinion that when choosing a suitable offer, the Customer company focuses solely on the price. Of course, this happens, but much less often than you might imagine. When compiling a tender proposal, experts recommend adhering to several principles. These truths are as old as the world, but over time they have not lost their relevance.

1. Do not apply for all contests in a row

Before rushing into battle and submitting an offer, weigh the pros and cons ten times, understand whether it is really worth taking part in this particular tender. Not always the desire to make a profit should be a decisive factor - sometimes it is much more important to focus on developing your own business, pressing issues or looking for other, more profitable projects that you will work on with great pleasure and that will bring you much more profit.

2. Let your offer bring added value

One of the main rules that a company wishing to win a tender needs to remember is that it is not enough to achieve full compliance of the proposal with the conditions specified by the Customer. However, even a lower price is not a guarantee that the contract will be concluded with you. Try to learn more about the client company, understand what problems management is facing, and then complete your proposal so that the commission cannot ignore it.

3. Pay attention to the little things

Once againLet's return to the topic that we already touched on above. Even if you manage to make a favorable impression on the Customer and offer a favorable price, but you do not pay enough attention to the correct execution of documents, you risk missing out on many opportunities. But you shouldn't get too carried away either, because it happens the other way around: mired in bureaucratic fuss, you can forget about the essence and purpose of the proposal.

4. Remember that organizations don't make decisions, people do

It depends on them who wins the tender. How it works? Sometimes, in order to get the opportunity to work on a desired project, it is enough just to establish contact with those who will make a life-changing decision for your business.

5. Keep the brand of a true professional

But even if your proposal is 100% worked out, it is not certain that you will win the tender. This can be due to many reasons, and one of them is the inability of your negotiator to give clear answers to the Customer's questions during negotiations. Therefore, the degree of involvement in the work process and the competence of all participants without exception is one of the decisive success factors.

How to prepare a tender? Information for the Customer

For its part, the Customer company, which has decided to organize such a competition, must also carefully prepare for it and provide all the necessary documents:

• Invitation to participate for other companies.
• Qualification Form (in which participants willindicate official information about yourself).
• Brief (questionnaire containing basic data on the subject of the tender).
• Additional information on the project.
• The main criteria for evaluating participants that you will be guided by when making the final choice.

It is extremely important that all information in documents be truthful, reliable and well structured. Nowadays, it is possible to create an electronic tender without any problems - this is, in fact, the same tender, but all information from the Customer company and potential executors comes over the network, on the Internet.

The competition itself consists of three stages: searching for potential participants, a detailed analysis of their proposals, discussing the project and, in fact, concluding a contract with the winner.