Most Commonly Asked Questions About the Tendering Process

If you’re new to the world of tendering, it can be confusing trying to navigate it, what with all the terminology and jargon frequently used. Making an error because you were unsure of what a particular term meant is often one of the most common mistakes first time applicants make when submitting tenders in VIC or elsewhere in Australia. Here are some of the most commonly asked questions about tender terminology to ensure you don’t make the same mistakes:

What is Bid/No Bid Planning?

The bid/no bid process is basically an internal process that happens within a company at the very start of the tendering process. This is a decision that will take into account their company’s capability to follow through with a contract and whether they have the necessary qualifications to successfully compete for the contract. In the bid/no bid process, you shortlist the tenders you have the best chances of winning, and reject ones that you don’t qualify for.

How do EOI and tender differ from each other?

Two terms that are often mixed together but mean two very different things, you may find different vendors advertising either a tender or an EOI.

An EOI or Expression of Interest is a pre-qualification process of a multi-stage tender process that shortlists applicants that meet the vendor’s requirements best. These shortlisted candidates are then sent the tender documents to formally bid for the contract. An EOI attempts to make the tender evaluation process easier by only allowing qualified candidates to prepare a proposal. An EOI is more informal and is generally regarded as a company acknowledging that they are interested in bidding for the contract. You may not even be required to submit a price list at this stage. It is also not always necessary that a request for tender or RFT will follow an EOI; the buyer may just be shortlisting candidates they would be willing to work with in the future.

A tender, on the other hand, is a more formal, detailed set of documents, which will include details of your estimated costs, whether you are planning on hiring subcontractors for the job, how you propose to solve the problem being posed, and the time period you’re looking at to complete the project.

What is the difference between a quote and a tender?

Similar to EOI and tender, a request for quote (RFQ) and a tender are also often confused with each other. Although both share several characteristics, a RFQ is usually much less formal than an RFT. Most often, a tender is issued when the value of the project exceeds A$250,000, whereas an RFQ may be issued for projects of much lesser value. Typically, the tender process undergoes much greater scrutiny and there may be several qualifying steps before you succeed in winning a contract, whereas an RFQ may be straightforward and have much less competition. It can be great for smaller or newer businesses to get their foot in the tendering world with a much higher chance of success.

What is procurement?

Procurement is the umbrella term that encompasses all the different steps involved in the tendering process. This process will start from the buyer identifying the need to hire an external contractor to solve a problem they are experiencing, and will end once the contractor has been paid for their work. All the different processes, such as sending out an RFI (request for information), EOI, preparing the tender documents, through to interested candidates submitting their tender proposals and finally to the evaluation and selection all come under procurement.

What is reverse tendering or reverse auction?

In a traditional auction for property, goods or services, buyers would be competing against each other and quoting higher and higher rates until they win said property, goods or services. On the other hand, in a reverse tender or reverse auction, sellers compete against each other to offer their services to a buyer. In contrast to a traditional auction, the sellers will be quoting lower and lower prices they are willing to take in order to get the contract and the seller with the lowest bid will win the contract. In a reverse auction, the onus is on the seller to ensure that they meet the requirements of the tender exactly, or they risk being rejected even if they quote the lowest price. This type of procurement is very often used in government tenders, and is most often conducted online.

When looking for tenders in VIC or elsewhere in Australia, turn to Bidsmith. Not only can we help you with the bid/no bid process, our bid writers have served on evaluation panels, which means we have the unique ability to analyse a tender proposal from both sides of the coin. Whether you need help coming up with the most compelling way to present your answers or are just looking for an expert to go over your prepared proposal, get in touch with us today.