Wednesday, June 22, 2011

Successful Bidding and Tendering

Apparently both, bidding & tendering appear to be synonymous, but a bid is fundamentally an offer to buy something in a contest, whereas a tender is an offer to supply specified goods or services at a said rate. For a successful bidding & tendering, the most critical parameter is the assurance given by the bidder or tender, of being capable to buy or supply in conformance with the said terms.

What is the difference between a bid & a tender?

How the bids & tenders are evaluated?

Bidding is normally less formal & more transparent, in comparison with tendering. Tenders are usually on huge scale whereas bids may be as small as an offer to write an editorial for dollars or as huge in magnitude as an offer to buy an original painting of Picasso for multi million dollars.

An LPTA (Lowest Priced Technically acceptable) bid is normally evaluated against its being valid at the opening time, being the lowest in cost & conforming to the specifications. In order for a tender to be successful, it is evaluated by supporting tools like RFA (Request for Proposal) Evaluation Matrix, which is a kind of decision matrix.

What is a Decision Matrix?

What determines the success of bidding or tendering?

Decision matrices are supporting tools to facilitate decision makers in concluding whether bidding or tendering is prosperous. A purpose made matrix; known as COWS method, involves Criteria setting, Options identification, weighing the criteria & scoring the criteria.

The highest bid offered by a bidder, or the lowest offer given by a tenderer, determines the success of bidding or tendering usually though is not a rule. Authorities therefore declare at the time of inviting sealed tenders, that they reserve the right of rejection without assigning any reason.

Logic behind this strategy is said, to have option to think about the fulfillment of the implied needs which might have escaped being specified at the time of opening a bid or floating a tender. Practically, however it can do more harm than lovely & tenders of mega projects become means of open & huge scale corruption.

Convincing credibility is the key to success

Irrespective of the bidding or tendering, the key to success is to persuade about ones credibility by providing sufficient & valid, objective proof. A construction company, for example, in order for being successful, may persuade through showing the projects completed by it, or the size of it is capital in market. Similarly a writer for example, may persuade through his or her clear, concise, grammatically correct, coherent & a significant writing to be successful. Both, the successful bidding & tendering, in nutshell, depend on the degree of declared & assessed capability & credibility.

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