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A call for tenders is a request for suppliers to provide offers to complete a project or meet ongoing supply needs. The lowest bid typically wins, but other factors may play a role. An invitation to tender is different from a request for proposal, and it is important to read the documentation carefully.
A call for tenders is a request by an agency, organization or company for suppliers to provide offers to complete a project or meet ongoing supply needs. Each bid should contain a detailed breakdown of what will be provided and at what cost. Typically, the lowest bid wins, although other factors may play a role in the decision process of how to award a contract. Calls for tenders are often listed in newspapers and public bulletin boards and can also be obtained through an organization’s office.
Also known as an invitation to tender, this request simply asks for pricing information. This differs from a request for proposal, where the document includes a discussion of what is needed and invites sellers to not only provide a price estimate, but also discuss how they will meet a need. In RFPs, more freedom in pricing is allowed, as one bidder can demonstrate that a more expensive method has long-term benefits or is better able to meet the need than another supplier.
The invitation to the bidding procedure is often sealed. Bidders receive specification documentation and are given a set time frame to submit a bid. On a given date and time, staff open all bids at once, record the relevant details and determine which bidder should be awarded the contract. In the case of government agencies, this information is open to the public and any seller can ask to see the bids, including the winning bid.
In cases where the contract does not go to the lowest bidder, this is usually due to concerns about the supplier’s ability to deliver. An invitation to tender may be suspiciously low-key or may come from a company with a bad reputation. Government agencies, in particular, cannot do business with sellers in certain countries or associated with particular regimes, and therefore may refuse an apparently reasonable offer if there are ethical or political concerns. If the lowest bid is rejected, the agency must provide a solid reason to avoid charges of favoritism or discrimination.
It is important to read an invitation to tender carefully. Companies familiar with the process may have staff focused on reviewing all open applications, researching those that would be a good fit for the company, and preparing bids. The documentation must be followed exactly and the offer must be complete and complete. If there is an error in the invitation to tender, the company must correct it as quickly as possible, as the offer could be grounds for a contract and an error could become very costly.
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