4 important benefits of winning bids and tenders

WHAT ARE BIDS AND TENDERS

Bids and Tenders are often used interchangeably for they mean the same thing.

A tender or a bid is usually written or submitted in response to an earlier request put out by the buying organization looking for a supplier to provide certain goods or services.

Typically, a buying organization will release an Invitation to Tender (ITT) when they are looking to procure goods, services or product. The buying organization at this point is essentially looking to outsource a solution to a selected supplier. which already points out to one of the benefits of winning bids and tenders.

Real quick, an invitation to tender (ITT) is a formal procurement document that is issued by the buying organization, inviting suppliers to bid for the contract of works they are looking to fulfill. 

This could be for the supply of either goods, services or works that the procurement authority requires. 

Remember the buying organization can start by releasing a Request for proposal (RFP) and not necessarily ITT.

WHAT ARE THE BENEFITS OF WINNING BIDS AND TENDERS?

There are a number of benefits of winning bids and tenders, here are four that you need to know

Securing work for your business

At times suppliers do not compete for a specific tender, what they do is compete for an opportunity to be in the buying organisation’s list of preferred suppliers. This usually mean the suppliers end up having a framework arrangement or framework agreement with the buyer.

In most cases the framework itself is not a contract. It simply establishes the basic terms and conditions that will apply to subsequent call-off orders, saving the need for repeating the full competitive tendering procedures for individual purchase contracts.

These systems are frequently used in an array of sectors including health sectors and construction sector. The benefit of these is that they can run for years at a time, with the possibility of extension.

In public sector for instance there is a guaranteed pay

One of the advantages that comes to your business if you are responding to bids and tenders in the public sector is that you will be guaranteed pay upon winning a contract.  This will for the most part give suppliers peace of mind when delivering contracts.

The same cannot be said about tenders in private sector.

Companies in private sector aren’t for the most part bound by the same regulations as the public sector hence they can mess about when it comes to payment. This is something you have to bear in mind when tendering for private sector organisations.

SMEs can also benefit from government tenders

As part of encouraging growth in small businesses, governments don’t just issue tenders to big corporations. Most public procurement acts have a thing to say about diversity when it comes to issuing contracts resulting from tenders. SMEs can now actively apply for public sector contract.

You gain experience

With most bids and tenders you will need to give evidence of your past performance, basically show that you have experience. In most cases you will be required to show two or three clients you have worked for.

Securing smaller contracts will help you build up the needed experience.

Remember the more case studies and experience you have and can provide as evidence, the bigger the contracts you can go after. The bigger the contracts you go for, the bigger your business will grow.