What is a tender process?


Quick Answer

According to Winning Government Business, the tender process includes invites placed by institutions requesting certain goods or services and responses by suppliers to business bids. Institutions make invites for tenders by advertising them and the minimum requirements to win the tender. The process is competitive and open to many suppliers.

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Full Answer

The official U.K. Government website explains that once the requesting-institution receives the bids, a shortlist of potential suppliers is prepared. Interviews with short-listed suppliers are conducted to gauge their financial ability, market reputation and credit rating. The institution’s tendering committee selects a supplier offering them the best value for money to sign a supply contract. In both the United Kingdom and United States, applicants who fail to secure a tender from a public institutions can get feedback as to why the application, or bid, failed.

According to Lawyers.com, before signing a contract a supplier needs to understand the terms and conditions, to avoid future legal tussles. The contract outlines obligations of the supplier and institution to each other, such as the delivery period, quality and payment terms. Once a supplier agrees with contract terms and signs it, the institution’s purchasing manager, writes the supplier a letter of acceptance and issues a purchase order. Payments terms are made as per the terms in the contract. If the supplier delays in delivering the goods and services, or if the quality is substandard, an institution can cancel the contract.

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