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Types of Tender Procedures Explained

You do not need a PhD to understand tender procedures. Whether you are a business owner or an entrepreneur, understanding them is essential for bidding and winning contracts. Discover everything you need to know about tender procedures, from the basics to the more detailed aspects.

The tender process is a way for businesses to get the best possible price for goods and services. There are many tender procedures, each with its set of benefits and requirements for construction cost estimating software. By understanding them, businesses can get a better idea of what is available to them and make the best decision for their needs.

What Are the Different Types of Tender Procedures?

There are three main types of tender procedures. Let’s take a look at them one by one.

  1. Open Tendering

Open tendering is the most common type of tender procedure. It is where companies submit a bid for a specific project or service. The bidding process is transparent and any company can participate, as long as they meet the conditions set by the authorities.

The main advantage of open tendering is that it allows for competition and ensures that the best bids are submitted. However, this method also has some disadvantages.

For example, it can be time-consuming and complicated. So, it is not always the best option when speed is important.

An open tendering process typically entails the following steps:

  •   The release and publication of the invitation to tender (ITT) by the buyer;
  •   Response assessment and contract awarding to the most beneficial tender.
  1. Restricted Tendering

Restricted tendering is similar to open tendering in that companies solicit bids from interested parties, but in this case, they only allow a certain number of qualified bidders to participate. It limits the competition and makes it easier for the company to choose a winner because they know who they are dealing with.

However, restricted tendering can also lead to collusion among bidding parties, which can reduce the overall quality of the final product or service. This type of tender includes the following procedures:

  •   The customer distributes a pre-qualification questionnaire (PQQ);
  •   Eligible businesses receive an ITT;
  •   The bidder with the most advantageous tender terms and conditions receives the contract.
  1. Negotiation Tender

Negotiated tender procedures are rare but they offer some advantages over other types of tender procedures. For example, they allow for faster decision-making because all interested parties have an opportunity to participate in negotiations.

They are also less likely to result in corruption because all parties have an incentive not to cheat during the bidding process. However, negotiated tender procedures may be more difficult to execute than other types of tender procedures due to their time-consuming nature.

The following procedures are included in a negotiation tender:

  •   At the pre-qualification stage, suppliers are asked to complete a pre-qualification questionnaire;
  •   Negotiation stage procedures. They include sending an ITT to suppliers to negotiate.

What Are the Different Types of Tender Documents?

There are a variety of tender procedures, and each one has its specific set of requirements. To find out more about them, you can read one of the following documents:

  •   Invitation to Tender (IT);
  •   Selection Questionnaire (SQ);
  •   Pre-Qualification Questionnaire (PQQ);
  •   Notice to Interested Parties (NIP);
  •   Request for Proposals (RFP);
  •   Contract Award Procedure (CAP);
  •   Performance Bond Scheme Tender Procedure (PBS);
  •   State Aid Tender Procedure (SATP);
  •   Certified Procurement System Tender Procedure (CPSTP);
  •   Concession Agreement Tender Procedure (CATP).

Before you begin with any tender, make sure that you understand the type of tender procedures. It will help you to get what you are looking for and it will also ensure your project becomes a success.

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