Tender and Bid

Tender and Bid are common terms you come across when dealing with procurement of services in the construction industry. Usually, the two terms are used interchangeably, although their meanings vary.

What is the Difference Between Tender and Bid?

Both tender and bid are standard terms you will encounter in the tendering process. Mainly, organizations use a tendering process to obtain the most qualified contractor to perform specific work.

Clients often need specific construction projects to be undertaken, and they make formal offers to the public for qualified businesses to bid. The tender process varies based on the nature of the construction project to be undertaken. Some clients require firms to express interest and undergo a pre-qualification exercise before they are invited to bid.

Businesses with the required qualifications prepare and submit their bids hoping they will win the project.

After receiving the bids, the client evaluates the submitted tender documents and picks the most qualified business to do the project. The companies offering competitive prices and having a proven track record of delivering quality work are likely to get awarded the contract. 

But, what is the difference between the two terms – tender and bid?

A tender is a document issued by an organization to procure construction services. The client formulated the tender, stipulating what services the organization requires. The contractors responded to the tender by submitting a proposal known as a bid.

Bid refers to the process in which a business expresses interest in a project by providing the required information. The company can bid for new or repeat business.

Usually, the bid is prepared and presented by the contractor or supplier in response to a tender invitation. The contractor provides crucial information, including the cost for the project and a list of the contractor’s equipment to perform the work, workers’ qualifications, and answers to whether the contractor meets the required contract conditions.

The organization receiving the bids evaluates the documents against the set criteria.

What is Bidding in Tender?

The client or a public body invites contractors to bid or express interest in performing a construction project through a written proposal. Bidding is the process of writing a proposal and making your offer to execute the project.

Often, organizations need specific construction projects to be undertaken, and they make formal offers to the public for qualified businesses to bid. The tender process varies based on the nature of the construction project to be undertaken. Some clients require firms to express interest and undergo a pre-qualification exercise before they are invited to bid.

Businesses with the required qualifications prepare and submit their bids hoping they will win the project.

After receiving the bids, the client evaluates the submitted tender documents and picks the most qualified business to do the project. The companies offering competitive prices and having a proven track record of delivering quality work are likely to get awarded the contract.

What are the benefits of bidding? Bidding ensures that construction projects are less risky for the contractor and more predictable for the owner. Once the contractor is awarded the project after bidding, the parties – contractor and a client sign a contract agreement. The two parties will ensure the project is implemented correctly within the agreed contract terms, including the size, scope, and cost. 

What is Tender and Bid Writing?

Bid is a standardized document submitted online or in printed form. To write a bid, the team requires preparedness, good planning, and proper time management.

The bids need to be written professionally and submitted within the specified timeframe. Businesses with well-written proposals have higher chances of getting more jobs and growing.

Importantly, in bidding, there is no specific formula for writing a perfect bid. Tenders for different projects are different, and no two contractors can submit exactly similar proposals.

However, to write a perfect bid, one should learn and provide enough relevant information about the company’s ability to perform the project. You can apply known strategies to make your offer convincing. 

For instance, assume you are evaluating the bids and imagine how a reasonable offer should look like. Provide all the necessary information and answer all the questions to make your proposal outstanding to the evaluation team for consideration. 

Also, you should carefully study the tender evaluation criteria. This should guide you in knowing which information you need to provide.

Lastly, bid writing requires specialized skills. The bid should always be compelling, clear, and competitive. Notably, not many businesses have in-house bid writing professionals. Such companies can approach tendering consultancy services to advise and write the bids for them and ensure they don’t miss out on good opportunities.