Overwhelmed by Jargon? If you’re new to the tendering process it can seem overwhelming, especially if you’re not familiar with the minefield of tender terms and jargon. So, I thought I’d go back to basics with an explanation of some commonly-used terminology.
What is a Tender?
An offer to carry out work, supply goods, or buy land, shares, or another asset at a stated fixed price. – www.oxforddictionaries.com
“We invited tenders for up to three more frigates”
“Six contractors were invited to submit tenders”
Synonyms: bid, offer, quotation, quote, estimate, estimated price, price; proposal, submission
Tendering is the process of making an offer, bid or proposal, or expressing an interest in response to a particular invitation for the supply of goods and services.
Tendering has become standard practice in business procurement. It provides a formal framework to source goods and services in a fair and equitable environment.
The formal offer made by a supplier to a client.
Tenderer (Supplier, Seller, Bidder, Respondent)
The organisation bidding for work. The client will invite bids from multiple suppliers.
Client (Agency, Buyer, Principal)
The tendering organisation.
A tender can take on many forms and there are many terms used in the tendering process. While there is no standard tender format or structure, here are some commonly used expressions you need to know.
- Request for Tender (RFT)
- Request for Quotation (RFQ)
- Request for Proposal (RFP)
- Request for Information (RFI)
- Expression of Interest (EOI)
What’s the difference between these? Well, it depends on the level of detail for a particular tender and what stage of the process it’s at. Remember that all, or just some of these, may be used.
EOI – Expression of Interest
This is the document where the supplier details their interest in providing specific products or services for the client. It is often used for the shortlisting process and may be used as the first part of an RFI, RFP or RFT.
RFI – Request for Information
This is the initial step in the process, where the client requests general information from the supplier.
An RFI can lead to an RFQ or RFP.
RFP – Request for Proposal
An invitation (often through a bidding process) for suppliers to submit a proposal for specific products or services. It’s usually not as defined or structured as an RFT, and may provide the client with more flexibility in their solutions.
RFQ – Request for Quotation
A formal procurement process where the supplier submits a quote for specific goods or services. The information required may be a lot less detailed than for an RFI or RFP.
RFT – Request for Tender
This is the full formal tendering process where the client will evaluate the supplier’s ability to provide specific products or services.
The RFT document is usually made up of the Conditions of Tender, Conditions of Contract, a Statement of Requirements, and the Tender Schedule/s.
Other common terms used in the tendering process are:
Tender Submission (Response Document)
The tender response document must include detailed information according to the prescribed framework or format. It must address all the specifications and be submitted according to a set deadline. A successful submission, along with the Conditions of Contract, will form the basis of the final negotiated contract between you and the client.
Conditions of Tender (Conditions of Offer)
The conditions that the supplier must agree to and meet, to be considered by the client.
Conditions of Contract
All the Terms and Conditions of the work that is to be performed, and the rights and responsibilities of all parties.
Statement of Requirements (Specifications)
information that must be provided by the supplier about the specific project relating to pricing, delivery, timing and performance.
Selection Criteria (Evaluation Criteria)
The requirements specified by the client that must be included in the tender response. These may contain mandatory and non-mandatory criteria.
Tender Schedule (Response Framework)
The form that the supplier is required to complete and submit as part of the tender response. Usually, this will be a highly structured and formatted template.
However, a free format submission is where the client has not defined a structure for the supplier’s response. The free format provides an opportunity for the supplier to expand on their capabilities, professionalism and experience.
The “quality” part of the supplier’s offer. These requirements will often be evaluated by the client according to pre-determined weightings given to each attribute.
A bid or tender response that meets the requirements of the document in full.
A bid that does not comply with the provisions within the tender document.
Evaluating panel (Evaluator)
Tender responses are usually assessed by a panel or committee. The first step is to check the response is compliant. Then it will be evaluated against the criteria as specified in the RFT documents.
Successful / Unsuccessful tender
The suppliers who have been awarded the contract will be advised in writing. Unsuccessful bidders are also be advised in writing and allowed the opportunity to debrief with the client.
You should now have some clarity on the terminology used when you start to look at tendering.
In my next blog I’ll give you a run-down of the steps in a typical tender process.
If you’d like to connect with a tender writing professional with almost two decades’ worth of experience, let’s organise a time to chat.
Or download my free Tender Cover Letter, to get you started.
And don’t forget about our closed Facebook group The Tender Hub – learn more.
Kristine Daw is the Managing Director of Dawtek, a Melbourne-based company specialising in tenders and proposals, technical writing, business documentation, copywriting, editing and creating business templates. Kristine and her small team have a range of clients including small businesses, multi-national corporations, all levels of government and not-for-profits.
1300 DAWTEK or dawtek.com.au