A tender is, in essence, a type of transaction model used by large organizations, government bodies, companies and NGOs in order to find contractors for particular projects or procurements. Basically, it is a bidding process utilized by both public and private organizations. A quotation, also often known as a quote is a document that a supplier will submit to a potential client that lists the proposed prices for the supplier’s goods or services based on certain conditions stipulated by the client. The quotation and tender processes are both used to obtain written offers from suppliers for the supply of goods and services. The quotation process is normally used for relatively low value and low risk purchases. For higher value purchases, which require greater accountability, the more formal tendering process should be adopted. Both processes are described in more detail below.
In seeking written quotations, the supplier should be asked to submit details of price, time required for delivery, trade or early payment discounts, any other costs associated with delivery and carriage and, where appropriate, the cost of maintenance. Suppliers should be given a reasonable period to respond to enquiries.
The tender process, however, is more formal than that required for quotations and a standard ‘Invitation to Tender’ comprising of a Tender Submission Form, a Specification Form, a Schedule of Services and Prices, a Specification and Compliance Form and other documents. These are issued to suppliers to complete and return by an agreed closing date.
Tips to Win Your Next Tender
- Follow Tender Instructions: Tenders include response forms which set strict word limits, and ask questions geared towards seeking ideal responders. Make sure you read any prompts and instructions before you set pen to paper.
- Form Professional Relationships and Network: A strong indicator of success is the extent of your existing relationship with the client’s organization. Attend industry events, network on LinkedIn, and use your professional relationships.
- Address The Selection Criteria: Each company have their own set of selection criteria; your job is to read between the lines. Think about how questions are worded, and anticipate what kind of answer the client hopes to see. Also try to be succinct and direct in your responses to the criteria. Readers will become frustrated with responses that are convoluted or poorly address their needs.
- Sign All Components Requiring Signature: There are many elements in a bid in need of signature, one of the most common tender mistakes is failing to sign sections, or signing bids incorrectly. Some companies have strict instructions for signatures, including initialing adjustments, supplying signatures from witnesses, or signing across entire pages of documentation. Check everything is signed correctly before submitting your tender.
- Pitch A Competitive Price: Is the price right? If you are unsure whether your quotations are too high or too low, it’s time to invest in construction estimating software. Various factors must be considered when writing up a budget – company research, market intelligence, competitor insights, as well as your own internal financial constraints. Software for builders makes it easier to consider numerous factors, so that when it comes to justification, you are prepared.
- Assess Your Point of Differentiation: Research what sets you apart from your competitors; this is what stands out the most when tender documentation is being compared. Point of differentiation is all about distinguishing how your services positively differ to those of your competitors.
- It’s Not All in The Tender: Your bid begins the moment you reach out to your prospective client, so make every email and call count. Build value and rapport from the very first exchange and ask questions that can assist you in writing a better tender. Sometimes a client may simply like you or trust you, and will give you a chance.
Tips for Writing a Compelling Quotation
- Identify your business risks: Consider your ability to manage the job. If you are concerned about the feasibility of the job, consider the impact of a worst case scenario and propose including a clause in the quote that protects both parties from any undesirable outcomes
- Quote in writing: Written quotes avoid confusion. Like written quotes, verbal quotes are legally binding but they can be prone to communication errors and misunderstandings.
- Add value: Remember, customers tend to get at least 3 quotes for expensive products or services. Think about how you can distinguish yourself by creating a unique selling proposition.
- Identify your business risks: Consider your ability to manage the job. If you are concerned about the feasibility of the job, consider the impact of a worst case scenario and propose including a clause in the quote that protects both parties from any undesirable outcomes.
- Look professional: Always make your quotes look professional by-
- using your company letterhead
- opening your quote with a greeting and thanking your customer for the opportunity to quote
- setting out a clear and logical structure
- carefully checking your spelling and punctuation.