If you’re new to the world of tenders (or were just curious about the meaning of some common ‘tender’ terms) this is the tender definitions blog for you!
What is a ‘tender’?
Tender has a few meanings of course (it can mean ‘sensitive’ for instance), but in a commercial context ‘tender’ means preparing and submitting a formal offer or bid to provide goods or services for a price to an organisation.
A fun fact which fits well with the definition of tender for our purposes – dictionaries put the origin of the word ‘tender’ from the Old French ‘tendre’, meaning ‘to offer’, which in turn derives from the Latin ‘tendere’, meaning to ‘hold forth, extend’.
See more on the use of Latin terms in tenders below – yep, it’s a ‘thing’.
What is an eTender?
Simply put it is procurement using the internet or a tender managed and submitted online (with the ‘e’ standing for ‘electronic’).
What is an ‘RFT’ or ‘RFP’?
A Request for Tender (RFT) or Request for Proposal (RFP) is a formal, structured process for generating and assessing competing offers from different potential suppliers or contractors looking to obtain an award of business activity in works, supply, or service contracts. Usually, these competitive RF’x’ selection processes are designed and managed by an organisation’s procurement team.
This is also sometimes expressed as an ‘Approach to Market’ (ATM) or known as a ‘Call for tenders’ or a ‘Call for bids’.
What is ‘tendering’?
‘Tendering’ as a verb means the activity around preparing and submitting a tender response.
Other terms floating around for the actual process of preparing a submission (‘tendering’) include: capture planning, bidding, pursuits (popular in accounting), pitching (popular in architecture, graphic design and advertising) and of course ‘selling’.
It should not be forgotten tenders are ‘selling’ or ‘sales’ documents.
What is a ‘tenderer’?
A ‘tenderer’ (or bidder or vendor) is the organisation responding to a Request for Tender (that is – you – you and your company are the ‘tenderer’).
What is a ‘tendering organisation’?
Usually ‘tendering organisation’ means the client or customer, or ‘buyer’ requesting tenders.
What does it mean if a tender is ‘open’ or ‘closed’?
‘Open’ or public tenders
Open tenders are generally publicly advertised (though not always widely) through government websites, paid tender alert subscription services, in media or trade journals, this type of procurement invites any interested person or party to submit a tender.
Open tenders are most likely to be issued by government or other public sector entities that are required to seek competitive proposals.
‘Closed’ or invitation only or limited tenders
As the name suggests, closed tenders involve only selected bidders. Those invited to tender have been pre-qualified in some way – perhaps by successfully making it through round one of an Expression of Interest (EOI), or by being invited based on an existing relationship or sometimes by reputation.
Closed tenders are most likely to be found in the private sector though government occasionally run ‘closed’ tenders, in Australia these are often called a ‘limited tender’.
What are some of the other or different names for tenders?
Some of the other or different names for tenders, bids and proposals commonly found in the B2B and B2G services context include:
- Request for Proposal (RFP)
- Application for Inclusion (AFI)
- Request for Registration of Interest (ROI)
- Request for Quote or Request for Quotation (RFQ)
- Request for Information (RFI)
- Application for Pre-qualification (AFP)
- Services Survey for the supply of services (SSSS)
- Request for Application (RFA)
- Invitation to Participate (ITP)
- Request for Offer (RFO)
- Invitation to Offer (ITO)
- Expression of Interest (EoI)
- Unsolicited Proposal (UP).
While each of these processes has a slightly different structure, emphasis and purpose essentially these could all be considered a ‘tender’.
For an overview of different ‘tender types’, download JMA’s free resource – Tender, bid & proposal types: a quick guide for services businesses.
What’s the difference between a ‘tender’ and ‘proposal’?
See above – the terms ‘tender’ and ‘proposal’ are usually interchangeable and may depend on a particular industry or organisation’s language as to what they ultimately call the set of documents used to facilitate a procurement exercise.
As a rule of thumb, a ‘tender’ tends to be more formal and issued by big institutional buyers (e.g. government); whereas a ‘proposal’ is often less formal, with fewer ‘requirements’ and tends to be more common in the private sector.
A ‘proposal’ might also be something your business sends to a prospective client as a proactive business development activity (separate to any procurement cycle) where you devise a structure for the document and what to include as part of your solution and offer. This is sometimes called an ‘unsolicited’ or informal proposal.
What is a ‘tender bid’?
It’s tautology. It’s like saying ‘ATM machine’. Just use one or the other – no need to say both.
What is a ‘panel tender’?
A ‘panel tender’ is use of a single tender (or other competitive selection process) to efficiently establish a group or ‘panel’ of suppliers usually for ongoing or repeat needs. This is as distinct from a Request for Tender seeking to appoint a single provider to implement a ‘one-off’ project such as custom software or detailed engineering design for a single piece of infrastructure.
Think of a ‘panel’ as an approved list of suppliers that organisations can ‘shop’ from as organisational needs arise for goods/products (such as stationery) or services (such as routine legal or accounting advice).
What are all the different parts of a Request for Tender?
While often overwhelming at first glance, just remember while each RFT will have slightly different components, generally speaking typical tender requests will comprise at least four major ‘parts’.
Your RFT might be named and structured into these four parts:
PART A – Terms & Conditions – generally these will be standard T&Cs to that organisation. Often will include information and clauses such as ‘confidentiality’, ‘validity period of tender’, and other guidelines or ‘rules’ for this particular tender process. Often a ‘timetable’ will be supplied covering steps with indicative dates for the procurement process, e.g. cut-off date for clarification questions, due date of the tender, evaluation period, shortlisting or negotiation timing and eventual notification and award of successful contract(s).
PART B – Background, overview, scope of requirements – this this part of the RFT usually provides an overview of the organisation requesting tenders, brief context to their reasons for calling for tenders, the type and amount of work on offer and other important must haves as part of a ‘scope’ or ‘statement of requirements’. Often they will share high level data of current or historical ‘spend’ and if a panel tender how many incumbents are currently on their panel and for which areas.
PART C – Draft (or proposed) Contract, Agreement or Deed – usually bidders will be provided with the tendering organisation’s proposed ‘contract’. With larger organisations you are generally expected to sign up on ‘their paper’, rather than your own business’ standard T&Cs, agreement or contract. You can usually seek to clarify or vary any onerous or other ‘deal breaker’ T & Cs in your response.
PART D – Tender ‘response forms’ or ‘returnable schedules’– this is where you actually provide responses or answers to the tender criteria or questions. Often for formal tenders that are very ‘form-based’ you will be restricted either through word or character counts (‘…in 150 words or less describe…’) or page limits (‘…in no more than 1 page outline your…’).
Depending on the organisation calling for RFTs the naming and focus of each constituent part will vary somewhat, but the above example is a fairly ‘classic’ structure for a Request for Tender.
What are some of the other parts or requirements of tenders?
In addition, most Requests for Tender will also comprise some additional documents and requests for information.
Some additional documents are provided as guidance or for tenderers’ information and reference; other additional parts will need to completed by you and included as part of your tender submission.
Additional Request for Tender documents can include:
- Pricing responses – often requested in an Excel spreadsheet format.
- Policy statements – often provided ‘for tenderers’ information e.g. a copy of the tendering organisation’s anti-corruption policy or environmental management approach.
- Further evidence – often required in the form of supporting attachments to be included as part of your tender (e.g. proof of your business’ financial viability, evidence of your company’s policies, or copies of your insurance certificates of currency are all fairly common requirements).
What is a tender addendum or addenda?
An addendum (singular) or addenda (plural) is a Latin term, and literally means ‘a thing to be added’.
During a tender process it is not uncommon for something to have been overlooked by an organisation in rush to release the original RFT or for criteria or questions to be further clarified in order to assist bidders with their responses.
For example, the tendering organisation might identify an error or omission and reissue some or all of the documents, or issue an additional requirement that they had not originally considered necessary when the RFT was first released.
What should we call our supporting tender attachments (and just why are there so many Latin terms used in RFTs)?
I suspect the use of Latin terms is prevalent in tender requests due to the fact most RFTs are run past lawyers prior to their release (and the legal word still uses lots of Latin especially in contract law!).
Also, as tenders were traditionally submitted as hard copy paper documents you also have an overlay of historical printing and publishing terms for ‘attachments’ such as Appendix and Annexure creeping in.
Criteria (plural) and criterion (singular) is another classic bit of Latin-ish tender terminology – also known as the tender’s ‘questions’ or ‘requirements’!
Apart from the tender ‘addendum’ which supplies new information, other common names for different parts of RFT documents you might see include:
- Appendix (singular) or Appendices (plural)
- Annex or Annexure
In the tender world these terms tend to be used interchangeably to simply mean ‘extra’ or ‘supporting’ material included as part of your tender response.
A tender tip is to name your extra or supporting material differently to what the original RFT uses. For example, if the RFT has additional information in an ‘Appendix’ to distinguish your additional material use another name such as ‘Supplement’.
This makes it easy for evaluators to find your ‘evidence’ and super obvious that is part of your response, rather than mixed in or lost and overlooked as though it is part of the original RFT.
What is an ‘alternative’ tender?
Sometimes RFTs will offer an option to provide an ‘alternative tender’ or ‘non-compliant’ responses as part of their tender process. This is where you can offer a different solution that varies the strict requirements within the RFT. It may be as simple as an offering an additional ‘pricing model’.
Generally, the RFT will require you to complete and lodge a fully ‘compliant’ tender response with any ‘alternative’ tender presented as a clearly separate part of your submission.
See JMA’s blog: Alternative tenders – show clients what they really want.
How can I find tender opportunities for my business?
For ‘open’ tenders the easiest place to start is with different tiers of governments ‘tender portals’ or ‘e-tender’ websites where you can sign up to receive notifications of newly released RFTs, research current awarded contracts and in some cases view advance notices of ‘planned procurement’ across different categories and for different departments and agencies.
In Australia the various government etender websites include the:
Australian Government’s procurement and etender website is Austender
New South Wales Government’s etender website is Supplier.Hub
Victorian Government’s etender website is Buying for Victoria
Queensland Government’s etender website is QTenders
South Australian Government’s etender website is SA tenders and contracts
Western Australian Government’s etender website is Tenders WA
Northern Territory Government’s etender website is Quotations and Tenders Online
Australian Capital Territory Government’s etender website is Tenders ACT .
Local government in Australia tends to buy some products and services as a ‘group’ through their State or Territory’s Local Government arm or association. Some of the State and Territory local government procurement groups include in:
Queensland Local Buy
New South Wales Local Government Procurement
Victoria The Municipal Association of Victoria.
Otherwise consider registering and subscribing for tender notifications with individual local councils that you are interested in working with and potentially tendering to.
And for New Zealand Government (both National and local) the key procurement and tender website is GETS or the New Zealand Government Electronic Tenders Service.
There are also a few paid tender subscription services that aggregate all government tender opportunities and sometimes private sector tender opportunities and will send you notifications of new RFTs or planned procurements.
For ‘closed’ tenders see our blog on playing the long game – this is more about raising your business’ reputation, profile and market standing so you might be lucky enough to be ‘invited’ to tender, or more fruitfully being ‘networked’ in with the right contacts at the right organisations through deliberate and focussed marketing and business development activity.
How to win a tender?
Great question! Short answer is don’t feel shy about talking to us, we’d love to help you win your next tender, bid or proposal; and in the meantime check out JMA’s free tender resources and tender blogs.
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Remember, nothing is so complex that it cannot be explained simply Albert Einstein was spot-on when he said “nothing is so complex that it cannot be explained simply”. Tenders, bids, proposals, and informal pitches for business are not times to show how clever and capable you are by using legalese (I’m looking at you lawyers), […]