An invitation to tender (ITT, otherwise known as a call for bids or a request for tenders) is a formal, structured procedure for generating competing offers from different potential suppliers or contractors looking to obtain an award of business activity in works, supply, or service contracts, often from companies who have been previously assessed for suitability by means of a supplier questionnaire (SQ) or pre-qualification questionnaire (PQQ). The term "notice inviting tenders" (NIT) is often used in purchasing in India. An ITT differs from a

request for quotation A request for quotation (RfQ) is a business process in which a company or public entity requests a quote from a supplier for the purchase of specific products or services. RfQ generally means the same thing as Call for bids (CfB) and Invitation ...

(RFQ) or a request for proposal (RFP), in which case other reasons ( technology used, quality) might cause or allow choice of the second best offer. An RFP is a request for a price from a

buyer Procurement is the method of discovering and agreeing to terms and purchasing goods, services, or other works from an external source, often with the use of a tendering or competitive bidding process. When a government agency buys goods or serv ...

but the buyer would also expect suggestions and ideas on how the project work should be done. RFPs are thus focused on more than just pricing/

cost In production, research, retail, and accounting, a cost is the value of money that has been used up to produce something or deliver a service, and hence is not available for use anymore. In business, the cost may be one of acquisition, in which ...

, they entail a bit of consulting from the contractor or

vendor In a supply chain, a vendor, supplier, provider or a seller, is an enterprise that contributes goods or services. Generally, a supply chain vendor manufactures inventory/stock items and sells them to the next link in the chain. Today, these terms ...

. The closest equivalent to an ITT in the mainstream

private sector The private sector is the part of the economy, sometimes referred to as the citizen sector, which is owned by private groups, usually as a means of establishment for profit or non profit, rather than being owned by the government. Employment The p ...

is an RFP which, since public money is not involved, typically has a less rigid structure.

Typology

*Open tenders, open calls for tenders, or advertised tenders are open to all vendors or contractors who can guarantee performance. *Restricted tenders, restricted calls for tenders, or invited tenders are only open to selected pre-qualified vendors or contractors. The tender stage may form part of a two-stage process, the first stage of which (as in the expression-of-interest (EOI) tender call) was itself advertised, resulting in a

shortlist A short list or shortlist is a list of candidates for a job, prize, award, political position, etc., that has been reduced from a longer list of candidates (sometimes via intermediate lists known as "long lists"). The length of short lists varie ...

of selected suitable vendors. * Sole source tenders, where only one potential supplier is invited to submit a tender. The reasons for using restricted tenders differ in scope and purpose. Restricted tenders can come about because of: *

confidentiality Confidentiality involves a set of rules or a promise usually executed through confidentiality agreements that limits the access or places restrictions on certain types of information. Legal confidentiality By law, lawyers are often required ...

issues (such as in military contracts) *the need for expeditiousness (as in emergency situations) *a need to exclude tenderers who do not have the financial or technical capabilities to fulfill the requirements. A sole source tender may be used where there is essentially only one suitable supplier of the services or product.

Etymology

Dictionaries explain the etymology as coming from Old French , which means 'to offer'.

Typical template contents

A typical invitation to tender template in any project has the following sections: *Introduction * Project background *

Legal issues List of lists of issues and controversies with the law * Legal issues in airsoft * Legal issues with fan fiction * Burger King legal issues * Legal issues and controversies surrounding Netflix * Legality of cannabis The legality of ca ...

: proposed terms and conditions of contract * Supplier response required * Timetable for choosing a supplier * Requirements for tender submission, for example a fully completed but otherwise unamended form of tender must be submitted by the specified deadline.

Locating tender opportunities

Public sector organisations in many countries are legally obliged to release tenders for works and services. In the majority of cases, these are listed on their websites and traditional print media. Electronic procurement and tendering systems or

e-procurement E-procurement (electronic procurement, sometimes also known as supplier exchange) is the business-to-business or business-to-consumer or business-to-government purchase and sale of supplies, work, and services through the Internet as well as ot ...

are also increasingly prevalent. The

European Union The European Union (EU) is a supranational political and economic union of member states that are located primarily in Europe. The union has a total area of and an estimated total population of about 447million. The EU has often been ...

states that 235,000 calls for tender are issued annually using its

Tenders Electronic Daily Government procurement or public procurement is undertaken by the public authorities of the European Union (EU) and its member states in order to award contracts for public works and for the purchase of goods and services in accordance with prin ...

(TED) system, including those issued by countries in the European Economic Area and beyond. Public sector organisations in the United Kingdom use this system but from 11pm on 31 December 2020, at the end of the

Brexit Brexit (; a portmanteau of "British exit") was the withdrawal of the United Kingdom (UK) from the European Union (EU) at 23:00 GMT on 31 January 2020 (00:00 1 February 2020 CET).The UK also left the European Atomic Energy Community (EAEC or ...

transition period, a new e-notification service called "Find a Tender" (FTS) began to be used to post and view public sector procurement notices. Relevant new procurement opportunities launched after 11pm on 31 December 2020 must be published on this website. A number of companies provide subscription alert services which send notifications of relevant tender documents to the subscriber. An array of private organisations also assist businesses in finding out about these tenders. Cost may vary from a few pounds a week to a few hundred. Because of the specialised language and sometimes difficult-to-grasp procedures, there are several consulting organizations, who offer companies tender writing training, or undertake bid-writing for them. ITTs may be distributed to potential bidders through a tender service, allowing businesses to receive and search live tenders from a range of public and private sources. These alerts are most commonly sent daily and can be filtered down by geographical area, or by business sector. Some tendering services divide types of business very finely in their own way, by CPV ( Common Procurement Vocabulary) codes. This enables a business to find ITTs specific to what that business can supply. An ITT is usually an open invitation for suppliers to respond to a ''defined'' need as opposed to a request being sent to selected potential suppliers. The ITT often requests information following on from other information gathered previously from responses to a Request for information (RFI). This will usually not only cover product and service requirements, but will also ask for information about the suitability of the business. A supplier questionnaire or pre-qualification questionnaire may be used to elicit suitability information from suppliers in a consistent manner. An ITT is usually expected to conform to some legally standardized structure designed to ensure

impartiality Impartiality (also called evenhandedness or fair-mindedness) is a principle of justice holding that decisions should be based on objective criteria, rather than on the basis of bias, prejudice, or preferring the benefit to one person over another ...

, and the tender bid winner is entitled to take responsibility of the contract business supply documentations formalities and settle any tender bid engagement charges for official recording.

Pre-qualification questionnaires

Supplier questionnaires or pre-qualification questionnaires (PQQs) ensure that potential suppliers are all asked the same information when assessing their suitability to be invited to tender or to have their tenders evaluated. Some organisations issue a standard pre-qualification questionnaire, for example the UK government has developed standard core PQQ questions which have been revised several times and are "mandated for use" across government, and has also stipulated that PQQs should not be used by central government contracting bodies when procuring goods or services valued less that the threshold values set by European and UK procurement legislation.

Tender box

A tender box is a mailbox used to receive the physical tender or bid documents, or a digital equivalent. When a tender or bid is being called, a tender or bid number is usually issued as a reference number for the tender box. The tender box would be open for interested parties to submit their proposals for the duration of the bid or tender. After the closing date, the tender box is closed and sealed and can only be opened by either the tender or bid evaluation committee or a member of the procurement department with two witnesses. Even though the tender box is not implemented in every country around the world, the procedure remains the same. Tenders have a bidding period available to prepare and bid. Research has shown that the length of this period might affect the number of bids and as a result competition among renderers

Double envelope system

In an open bid or tender system, a double envelope system may be used. The double envelope system separates the technical proposal (based on and intended to meet the

statement of work A statement of work (SOW) is a document routinely employed in the field of project management. It is the narrative description of a project's work requirement. It defines project-specific activities, deliverables and timelines for a vendor providi ...

) from the financing or cost proposal in the form of two separate and sealed envelopes. During the tender evaluation, the technical proposal would be opened and evaluated first followed by the financing proposal. The objective of this system is to ensure a fair evaluation of the proposal. The technical proposal would be evaluated purely on its technical merits and its ability to meet the requirements set forth in the Invitation without being unduly skewed by the financial proposal.

Security deposit

Registered contractors may be required to furnish a bond for a stipulated sum as security or earnest money deposit to be adjusted against work done, normally in the form of bank guarantee or

surety In finance, a surety , surety bond or guaranty involves a promise by one party to assume responsibility for the debt obligation of a borrower if that borrower defaults. Usually, a surety bond or surety is a promise by a surety or guarantor to pa ...

Tender validity date

A tender validity date is a date until which a tenderer commits to keeping their prices (and other tender details) open for acceptance (or otherwise) by the client. Such a date is usually included in a form of tender, either as a specified date or as the termination of a specified period from another key tender date. For example, i
tendering for gym equipment
in 2013,

West Dunbartonshire Council West or Occident is one of the four cardinal directions or points of the compass. It is the opposite direction from east and is the direction in which the Sun sets on the Earth. Etymology The word "west" is a Germanic word passed into some R ...

required tenderers to accept that "Your tender shall remain open for acceptance for ninety (90) days from the date for return of tenders indicated above, or any subsequent date notified to you by us. Your tender may be accepted by us at any time during this period."

Post-tender negotiation

Post-tender negotiation involves negotiation between an intending buyer and seller after a seller's tender has been submitted. An initial stage may involve tender clarification, which is intended to eliminate any uncertainties or contradictory elements of a proposal, before moving into a true "

negotiation Negotiation is a dialogue between two or more people or parties to reach the desired outcome regarding one or more issues of conflict. It is an interaction between entities who aspire to agree on matters of mutual interest. The agreement c ...

" phase. The

Chartered Institute of Procurement & Supply The Chartered Institute of Procurement & Supply (CIPS), formerly the Chartered Institute of Purchasing & Supply, is a global professional body working for the procurement and supply profession in many regions of the world. It promotes best prac ...

believes that "provided it is undertaken professionally and ethically, ... post tender negotiation is an appropriate process to secure

value for money In economics, economic value is a measure of the benefit provided by a good or service to an economic agent. It is generally measured through units of currency, and the interpretation is therefore "what is the maximum amount of money a speci ...

.CIPS
Tendering and Post Tender Negotiation
accessed 4 June 2018

Related proposal types

Other types of proposal and terms in use include: *EOI – expression of interest *IFB – invitation for bids *ITN – Invitation to negotiate *ITV – invitation to vendors *RFA – request for applications *RFD – request for documentation *RFI – request for information *RFO – request for offers *RFP – request for proposal *RFQ –

or request for qualifications *RFS – request for services * Sources sought

References

{{Procurement requests Procurement Governmental auctions