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A tender is a government division that manages public procurement. It sets out requirements for the procurement process, determines conditions, commissions, price, and timing. The process helps prevent corruption and waste and ensures fair access to public contracts. Developed countries have more established tendering regulations, while developing countries may give preference to local companies.
A tender is a division of a government that defines, manages and governs the public procurement process. When a public sector organization or government agency has jobs or services to outsource to a private company, the entity typically must issue a procurement document, which sets out the requirements for the procurement process. The tender commission determines the types of conditions established in the bidding process, establishes any applicable commissions and other terms such as the price and the timing for carrying out the activities. At times, the tender committee may require the agency to award the job to the highest bidder or to a bidder who meets other specific requirements.
The government procurement process differs significantly from one jurisdiction to another, but a tender is usually required when the government entity in question has a need for goods or services that exceed a certain value. Government procurement is a substantial part of most nations’ economies, so these types of contracts are usually in relatively high demand. Since the government procurement process is to prevent government corruption and waste of resources, the process is usually closely monitored. The tender process helps ensure that a public body does not unfairly favor one or more private companies over others and also allows a wider and more diverse selection of companies to have equal access to public contracts. Public procurement procedures can also help companies that traditionally do not receive the majority of public contracts, such as women- and minority-owned companies.
An example of a tender in a developing nation is that of the government of Namibia. Namibia’s tender gives preference for public works to bidders who are local companies. More recently, this tender council has required that all bidders for government contracts must obtain unskilled and semi-skilled workers from within Namibia. If a business fails to meet these requirements, the business will not be entitled to any Namibian Government jobs or services. The nation of Zambia and the Kingdom of Bahrain are other examples of nations around the world using match boards.
In developed countries, tendering tends to be better established and more comprehensive in regulating public procurement. In the United States, the government procurement process operates under the auspices of the Federal Acquisition Regulation, while European Union nations follow EU law which governs all government contracts. The European Union maintains an online public procurement list and also has electronic procurement procedures.
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