Movie Case Study
The scene that you just saw showed how Vicky Oberoi (played by Sanjay Dutt) is talking to an associate who informs him that his company has lost the contract. He is frustrated as he can’t seem to understand the cause for losing the tender to another company. An employee in the company says that it is quite unfortunate to lose a tender by just Rs. 2. This makes Vicky suspicious of the employee as the associate on the phone told him that the bid prices would open tomorrow.
In this blog, learning Perspectives will explore what exactly is a tender.
What is a Tender?
Tenders invite bidding by organizations or contractors for a long-term or short-term project. These could be for construction, consulting, transport, etc projects. Bidding essentially means an offer to supply goods or services or execution of work according to terms and conditions described, at a particular price.
This application generally needs to be filed within a deadline. A standard bidding template is called the RFP or request for proposal. It is an invitation document for bidding which sets the terms and conditions. Various ministries, departments, and public sector enterprises spend a considerable amount of budget on the procurement of goods, works, and services to discharge duties and responsibilities assigned to them.
Bids are evaluated to make the process transparent. All tenders strictly need to be evaluated according to the terms and conditions mentioned.
Modes of Tendering:
Each procuring entity may also publish its own Schedule of Procurement Powers (SOPP). This helps in achieving a balance between the terms and conditions and awarding the tender to a competent authority.
This tender caters to a very large audience. As the name suggests, advertisements are published in newspapers and websites to attract a large pool of contractors. The organization should also post the complete tender document on the website and permit prospective bidders to make use of the document downloaded from the website.
It is similar to open tender but in this case, the provision of payment is made available in foreign currency too. Global tender documents must contain technical specifications that are in accordance with national requirements. The involvement of agents of foreign nationals can be a risk associated with this kind of tender.
As the name suggests this tender is limited by nature. Only those bidders who are contracted are listed with the procuring entity. Bidders from outside entities are considered unsolicited. The limited tender may not attract a sufficient number of bids and sometimes there may only be a single acceptable offer. This could also be a result of insufficient data available with the vendor.
Selection by direct negotiation/ nomination is called a single tender. This mode may be the shortest for awarding a contract.