According to CIPs, tendering is an organisation’s public release or public disclosure of the necessity of goods or services for a project to allow formal bids to be made to supply these goods or services.
Tendering’s benefits are readily apparent to those who have participated in it before. We understand how intimidating the bidding process might appear if you have not been through it before and are just getting started. Keep in mind the benefits you get in comparison to other, larger organisations.
In summary, the process begins when a corporation has an issue that needs to be solved and solicits bids from possible vendors. As a result, if you are a supplier and you see a firm advertising an Invitation to Tenders (ITT), the company invites you to submit a bid.
Benefits of Tendering Through Bidding Process:
Organisations often use tendering to learn more about the supplier market and how best to maximise savings from that market. This may be evident in the submitted bids, so you must take precautions to prevent bid manipulation. In reality, there are several entry points for suppliers’ initial offerings.
There are several factors to consider while tendering, each of which is difficult in its own right. But when dealing with high-stakes or high-value deals when transparency is paramount, tendering becomes the best option.
● Build Transparency
Tenders build trust with suppliers by providing a level playing field where qualified vendors may compete to provide goods and services to the company, regardless of the supplier’s size or location.
Companies don’t just wake up and decide, “Hey, let’s send out invitations to bids,” without first developing a procedure to outline, among other things, how potential vendors will be assessed, who will be in charge of how issues will be resolved, etc.
● Allow an Audit Trail
A “paper trail” details where and how much money was spent, as well as who gave the go-ahead in the event of any questions or concerns. This is useful for establishing responsibility in purchasing. Once the tendering procedure is established, time and money are conserved because everyone is on the same path.
● Encourage Competition
When done right, healthy competition may serve a useful purpose. If a contract is up for bid, the suppliers know they need to bring their game. Because of this, the client company is confident of receiving excellent outcomes.
● Protections Against Verbal Agreements
Tenders usually involve some form of written documentation. An accurate written quote may be generated in response to specified requirements with the help of this method. These will be useful for handling contracts and mitigating associated risks.
All contracts have a price, the one universal truth you must accept. As long as you pay what is agreed upon, the law does not care how much you pay, depending on the discussed risks or how you structured the arrangement. By engaging in a tender process, both the buyer and the seller may ensure they receive the best possible value for their money. Before you focus on the tendering process, make sure you consider the right bidding process.