Quick guide to the steps in tendering process

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Steps in tendering process will for the most part depend on the type of tendering process and what the organization intend to achieve. The first question we need to find an answer to before looking at the steps is what exactly tendering refers to.

What is tendering?

Tendering can be defined as; a purchasing procedure whereby potential suppliers are invited to make a firm an offer of the price and terms on which they will supply specified goods or services which, on acceptance, shall be the basis of the subsequent contract.

At its simplest sense tendering is the process by which suppliers are invited to put themselves forward for a contract.

When is tendering suitable in procurement?

In some cases, an organization may need to use a more formalized form of competitive bidding or tendering procedure in which the prequalified suppliers are issued with an invitation to tender (ITT) or invitation to bid for a contract, with the organization intending to choose the supplier with the best proposal or the lowest price.

This is often the case when dealing with procurement process in which there is more than price as the variable. Example of such include;

  • For complex projects
  • For high value high risk purchases
  • For projects where quality and price need to be assessed

What are the main types of tenders?

There are several approaches to tenders and they include;

  • Open tendering– the invitation to tender is widely advertised and open to any potential bidder
  • Selective tendering – in this approach potential supplier are prequalified, for instance on the basis of their technical and competency skills, and about 3-10 suppliers are shortlisted for invitation to tender.
  • Restricted open tenders – in this approach, prospective suppliers are invited to compete for a contract, but are partly prequalified by advertising of tender being restricted, for instance via specified media.

The steps in tendering process

Steps in preparing for tendering process;

  1. Preparation of the proper tender and contractual document, this helps in ensuring the bidding process is;
    • Accurately costed
    • Directly compared
    • All requirements are complied with
  2. Advertisement of the requirement and procedures to be followed, and timetable for expression of interest or submission of bids
  3. Sending out of pre-qualification questionnaires (in a selective tender) in response to expressions of interested, with timescale for these to be returned.
  4. Issue of invitation to tenders (IIT) and tender documentation to those responding to the advertisement or invitation to tender within the prescribed time frame. Tender documents would normally include;
    1. An invitation to tender and instruction to tenderers
    2. Pricing document
    3. The specification
    4. Criteria for contract award
    5. Conditions of purchase
    6. Deadlines for submission
  5. Tender documents should be issued to each potential supplier in identical terms and by same date
  6. Tenders or offers will be received in the form of sealed bids for opening by the tender evaluation team. Each tender will be analysed according to the criteria for tender award and selecting the best offer
  7. Post-tender clarification, verification of supplier information or negotiation where required
  8. Contracts will be awarded and the award communicated to the tenderers.

NOTE: The general idea is that a successful tender will be the one with the lowest price or the most economically advantageous tender. However, you may have to analyze whether and how effectively each bid meets the requirement of the specification

it will be legally and ethically important for any invitation to tender to state clearly that:

  1. The buyer will not be bound to accept the lowest price quoted
  2. Specified non-price criteria (such as environmental, social sustainability or innovation) will be taken into account, and given a specified weight or priority in the contract award decision.
  3. Post-tender negotiation may be entered into, if necessary to qualify or clarify tenders, or to discuss potential improvements or adjustments to suppliers offers

Transparency during the steps in tendering process will help in dealing with bid rigging and other vices that could occur in the process