In public-sector procurement (and a lot of the private sector), tendering is used as a fair and transparent way to select a suitable supplier to deliver a certain contract based on a set criteria that do not favour one applicant over another.
Tendering in procurement can be a little complicated, with several different types of process. The main types of tender and tendering processes are:
- Open tender
- Restricted tender
- Competitive dialogue procedure
- Negotiated tender
Competitive dialogue and negotiated tender procedures are the least common processes, typically used in more complex tendering procedures and on more complex contracts, so, depending on what industry you are in, it is unlikely that you will encounter these types of tendering.
The most common type of tendering, and the preferred method in public procurement, is the open tender.
Typically, a business or awarding authority (local government, NHS, housing associations etc.) will have a requirement for goods or services, and will release notice of this to the market so any interested company can tender competitively and be in with a chance of securing the contract.
The open tender process
This particular type of tendering in procurement provides the most competition in the market, as each bidder needs to prove their company offers the highest quality, and best value for money. A set of questions, criteria and overall objectives are used to mark each tender submission, ensuring that the process is fair and equal, and the best company is selected for the job.
In public sector procurement, as of January 2021 following Brexit, open tender opportunities are advertised using the UK portal Find a Tender, which sets out the details of a tender and is bound by UK procurement regulations. This only applies for tenders over a certain threshold, but it makes the process easily accessible for companies in the market as the tender opportunities are advertised free to all.
The restrictive tender process
The restricted (or selective) tender process is very similar; however, the process is more limited in terms of a select number of suppliers being invited to tender, rather than being completely open to all. This is typically presented in the form of a two-stage submission, comprising a selection questionnaire (SQ) and invitation to tender (ITT). The aim of the selection questionnaire stage is to reduce the number of bidders that progress to the ITT stage based on mandatory requirements, experience and financial thresholds. The selection questionnaire will essentially focus on what you have done, whilst those who are invited to ITT stage must then explain what they will do to deliver the contract.
Competitive dialogue procedure
Competitive dialogue essentially allows tenderers to enter into discussions with the buying authority until they find a solution that meets their needs. Often used for complex solutions (or services not currently used in the market), the process focusses on development of solutions and is more collaborative in nature.
Negotiated tender is where a buying authority approaches a specific provider to request that they deliver services. This is often based on the provider’s track record or positive working relationship with the buyer.
Completing a tender
Regardless of the type of tendering process, and whether you are tendering in the open or restricted process, completing a tender requires certain types of skill. We provide a whole host of top tips, guidelines and further advice available to download for free, so that you can understand the process and how to successfully complete a tender.
If you are submitting a tender in the construction industry, it can be highly competitive. See our top tips for construction tendering here.
We can help with different tender types at Executive Compass
For more specific support, contact our team today and we will be happy to discuss how we can help you through the tendering process.
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