Bidding & Tendering Process
What is the Bidding Process?
Bidding (also known by the tender process) allows you to choose the best service provider or supplier by comparing offers against specified criteria.
Sometimes product owners, clients, and project teams will need to outsource services or buy goods to meet project deliverables. This is when it can be crucial to the success of a project by choosing an organization or subcontractor.
Before a contract is awarded, the bidding process allows for a thorough evaluation of a partner’s capabilities. This process is crucial for companies who want to work in the public sector. It is also common in other industries, such as construction, gaming development, and advertising.
The Bidding Process
Step 1: Request for Proposals
To initiate the bidding process, product owners and project teams must first issue a request to proposal (RFP), or an invitation to bid (ITB). The package contains details about the project and is prepared by a tender manager.
So that bidders are clear about what is required, the package must clearly communicate the goals, priorities and objectives of the project. This should include deadlines and expectations, specifications, supporting documentation, and the list or requirements that bidders must submit.
It is important to do your research when evaluating bidders. It is common to ask the bidding company about its profile, project portfolio, and personnel resumes.
The invitation to bid is open to all or only to those who have been invited.
Step 2: Preparation of Bids by Interested Parties
After the RFP has been issued, interested parties can begin to evaluate the proposal. Bid managers are the project managers who prepare the bid.
The bid manager communicates regularly with the project team to confirm the availability of the resources they are about to commit. He also liases with the company that issued RFP for clarifications.
If the bidding party are general contractors, this process may involve facilitating another bidding session.
Once all details have been compiled and organized, the bid may be sent to the requesting organisation.
Step 3: Evaluation and Selection of Bids
After receiving the bids, tender managers evaluate them and determine their requirements.
Contrary to popular belief, the lowest bid does not always win. MEAT criteria (most economically beneficial tender) is the most popular way to choose the best vendor or service provider. MEAT criteria include more than just cost. They also consider quality, accessibility and innovation.
Selection can be done in two steps. Applicants are shortlisted before final tenders are made.
During this stage, communication between buyers and bidders should be possible. For more information, the tendering organization may request interviews or presentations.
Step 4: Contract negotiation and awarding
Negotiation and selection are the final stages of bidding.
Once the vendor or service provider has been selected, the tendering agency will inform them about the final approved price and any additional requests.
At this stage, the management and administrative departments can get involved. To cement the agreement, all parties must agree on the legal terms, payment terms, deliverables schedules, and other important details.
Project Managers in the Bidding Process
Although bid and tender are the same thing, tender manager is different from bidding manager to distinguish the role of a project manager in the bidding process.
Tender managers are project managers that represent an organization in search of a vendor or service provider. They gather information, assess requirements, and generate RFPs. They also provide important information to bidders. Tender managers assist bidders once they have submitted their bids.