Procurement Process: Understanding Types of Tenders!

 Tender means an invitation to offer for an item/items or work. All Public Sector purchases/Contracts in India, over a certain value has to be publicly notified throughTender Notices which are advertised through All India Newspapers, Trade Journals, Departmental Publications and Notice Boards, and on Internet.
Types of Tenders:

Tender can be classified based on the requirement category or Procurement Type. There are various types of Tenders. However, main Categories of the Tenders are listed below:
Open Tender:
Open tender is an arrangement where an advertisement in local newspapers or trade journals invites contractors to apply for tender documents. Open Tender is a transparent process which ensures that only the contractor with the best price and meeting all the technical requirements will win the tender.

Limited or Closed Tender /Selective Tender:
In Limited Tenders, only pre-qualified or known bidders are allowed to participate. Limited Tenders are not advertised in newspapers, as a result other bidder generally do not come to know that such tender is floated.The Lowest Bidder or L1 generally wins the contract.

Single Tender:
Single Tendering means sending the Tender to one particular party. Normally, it is either for an item where there is only one supplier or for an item where the purchaser has developed confidence in one supplier only and would just like to verify the current price, delivery etc. Single Tenders are also sent for items of proprietary nature.

Negotiated Tender:
Under Negotiated Tender method normally one contractor is approached and such tender mainly used for specialist work such as lift system or airport project at big level, in such case there are limited number of contractor who do such work in the market. It is based on one-to-one discussion with contractors to negotiated the terms of contract.

Item Rate Tenders:
In this type of Tenders the contractors are required to quote the rates for each item mentioned in the price bid. The quantity to be executed is given in the price bid.

Percentage Rate Tenders:
In this type of Tenders a detailed estimate of the quantity of work to be carried out along with the estimate rates is given in the price bid form. The Bidders are required to quote the amount in percentage above or below or at Par.

A method for procuring goods and services that requires notification to the international community. Bidders from eligible countries, as defined by the contracting agency or country, are given an equal opportunity to bid.

NCB or National Competitive Bidding:
In such tender type only Local or Indian companies can participate. International companies are not allowed to participate.

RFP or Request for Proposal:
In RFP a company is required to submit only the Technical proposal.

It is the same as RFP but more specific, and with more details in each part. An RFQ (Request for Quote) is used when an organization has already decided on a particular type of product or service, and wishes to see competitive pricing from multiple vendors of that service.

A RFI (Request for Information) is issued when an organization wants to gather information about a specific company or a supplier’s products or services in an initial data gathering phase. Usually with this data, companies can decide if they would like to further explore purchasing that product or service, and can qualify the produce/service/vendor for future conversations.

Expression of Interest is similar to RFP. EOI stands a business expression indicating an intent to bid

Single Envelope Bidding:
In such Tender both the Price Proposal and the Technical Proposal are submitted in a same envelope. The Contract is awarded to the Bidder whose Bid has been determined to be the lowest evaluated substantially responsive Bid.

Two-Envelope Bidding:
Bidders submit two sealed envelopes simultaneously, one containing the Technical Proposal and the other the Price Proposal, enclosed together in an outer single envelope. Both Envelopes are then put in a Big Envelope, is sealed & submitted. First Technical bid is opened & price bid of only those bidder who are found technically qualified are opened subsequently at a later date.

Multiple Envelope Bidding :
in such Tender, EMD is submitted in 1st Envelope, Technical Bid is Submitted in 2nd Envelope & Price Bid is submitted in 3rd envelope. On the basis of requirement bid can be submitted in separate envelope. First EMD envelope & pre-Qualification envelope is opened. Technical envelope of only those bidders who pre-qualify is opened and at last those who are found technically qualified, their price bid is opened.
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