Tenders are an opportunity to get work contracts from the government and other private organisations to build your business. A tender is an invitation for businesses to bid for a project for a government department, PSU, or private company. The tendering process in India is usually elaborate and follows specific steps to keep the process fair and transparent.
For example, if a particular government department (e.g., the Indian Railways) needs a specific product (e.g., 700 brake vans), listed below are some of the stages of tendering process and how the tender process will work:
- Post the requirement, i.e., tender notice, in the newspaper or online portal (usually e-Procurement portal and/or GeM portal)
- Invite all eligible businesses to bid for the project
- Receive all bids with tender documents and tender fees from interested companies in the specified format
- Evaluate all bid proposals (on technical, financial, and other grounds)
- Award the government contract to the most suitable bidder (usually the one with the lowest price bid meeting all the specified requirements)
If you are an MSME looking to apply for tenders, know that, while this is a huge opportunity to build revenue, there are many challenges in the tendering process. Learning about the tendering process, finding the relevant tenders, going through the invitation, etc., are just a few tender process steps that must be studied carefully before applying for tenders.
How tender process works in India?
Applications for tenders have now become completely online. Since tenders are invited by both government and private sector entities there are different methods of application.
Government tenders are usually published on the GeM (Government e-Marketplace) platform and you stand a chance to win eTenders on GeM portal if you apply correctly. This is the most widely used channel for public procurement in India. You will have to sign up to the GeM portal to know about active tenders. Once you login to GeM portal and select the relevant tender you can apply for the tender by filling the form and submitting the documents specified. This is one of the most common platforms for bidding for emerging businesses and MSMEs.
Private tenders are usually issued by large companies. While there is no central portal where private sector entities publish their tender requirements, there are e-Tendering portals that find and publish private sector tenders on their websites. These portals will feature a wide variety of private and government sector tenders.
7 things to know about how the tender process works in India
1. Know about the e-Tendering process
e-Tendering process is when the entire tendering process is done online. Most tenders are now published and applied for online and therefore are termed as e-Tenders or online tenders.
e-Tendering was designed to eliminate errors committed in the traditional methods of bidding. e-Procurement software has further simplified the tendering process. To get access to online tenders, it is best to sign up on GeM marketplace for government tenders and e-Tendering portals for finding private tenders.
Note: if you aim to apply to multiple tenders, consider getting software for eTender management to streamline and automate the process and keep all documents in one place.
2. Difference between RFI, RFQ, RFT and RFP
Request for Information (RFI), Request for Tender (RFT), Request for Proposal (RFP) and Request for Quote (RFQ) are must-know terms before applying for tenders. It is often confusing to understand the difference between these terms. Although these are all related to tender requests, they all have a distinct meaning. Here are the definitions of these terms:
| RFT | This is released by institutions to invite bids from suppliers |
| RFQ | This is a request to determine how vendors will meet requirements specified and at what cost |
| RFI | When the company has set the terms of the contract but needs some additional information from vendors to make a detailed plan then an RFI is published |
| RFP | This is a document released by a company requesting a proposal when an idea is in place, but it needs an action plan to execute the idea |
3. Difference between public and private sector tenders
Public sector tenders are tender invitations from government departments and public sector units (PSUs). GeM is the main channel to access public sector tenders. The platform has an easy system for furnishing tender applications along with supporting documents. Additionally, the government has an annual goal of procurement from MSMEs, which gives small businesses the upper hand while bidding for government tenders.
Public sector bids have strict guidelines, laws and regulations where bids are evaluated according to weighted selection criteria. This is because these tenders and their details are public knowledge. Pricing, safety, local supplier participation and sustainable purchasing policies are some of the determinant factors for winning public sector tenders.
Private sector tenders on the other hand are confidential data of companies and don’t need to be divulged to the public. Therefore, private sector entities are more liberal in their bidding evaluations. They often look for more innovative solutions that can give them a high rate of return at affordable prices.
4. Analysing tender request
Reading the RFT carefully is the most important of all tender process steps. Make a checklist of all the requirements quoted in the tender. Study the checklist thoroughly and see whether you have the resources to fulfil all the requirements mentioned in the document. Here is an ideal questionnaire you can use to create a checklist:
| 1. | What goods/services is the buyer seeking to purchase? |
| 2. | What are the key requirements stated in the RFT? |
| 3. | What are the eligibility criteria? |
| 4. | What is the deadline for completing the project? |
| 5. | What is the estimated cost of the project? |
| 6. | Are there enough resources to bid for the tender? |
| 7. | What is the profit to be gained from completing the tender? |
| 8. | What are the evaluation criteria as per the RFT? |
Also, check for important details like due dates (i.e., tender closing date), tender fees and special requirements, etc. When government tenders are published, interested bidders will have to pay a nominal tender fee if the RFT specifies it. There is also Earnest Money Deposit that is charged to make sure that only serious bidders are participating in the tender. While the tender fee is non-refundable, EMD is refunded. Registered MSMEs are exempt from the payment of tender fees as well as EMD.
5. Preparing tender proposal
Preparing the tender document is another one of the important stages of the tendering process. A well-planned proposal can make you the winning bidder.
The company that issued the tender request is looking for a competitive offer for the supply of their products/services. Once you have analysed the RFT, keep all the specified forms to be filled and the documents requested. You must fill in all the forms provided and answer all the questions mentioned in the RFT. The questions must be answered briefly and clearly to meet every requirement described in their tender request. A professional and convincing tender proposal is key to winning a tender.
6. Get regular updates on relevant tenders for more opportunities
If you are interested in setting an industry track record, you should participate in more tenders and complete them successfully within the given timeline. A successful track record is also a determinant when it comes to companies/government departments choosing you for their project.
Signing up for GeM is the easiest way to keep track of the latest government tenders. For private tenders, it will be better to sign up for the services of an e-Tendering portal. These portals bring all the relevant tenders for you in one place giving you easy access.
Alternatively, you can register your business on a business growth platform like Tata nexarc and take a subscription to receive alerts and announcement on the latest tenders in India.
7. Thoroughly read the terms and conditions of a tender
An RFT will have terms and conditions to be an eligible participant in a tender. For example, to participate in a government e-tendering process in India you will need to sign up to GeM portal and possess a digital signature certificate.
Terms and conditions will mention important information like the scope of work, commencement and completion details, required tender documents, taxes and charges of the project, etc.
Tips on winning tenders
The crucial step in winning a tender is analysing the tender request and preparing a befitting response that convinces the buyer to award the tender contract. Here are a few tips to win tenders:
- Scan the tender requirements carefully
- Check the evaluation criteria to better understand the requirements
- Prepare a well-structured and concise tender response for easy reading
- Research the tender requirements and see if you can come up with an innovative solution in line with current market trends.
- Analyse the competing bidders and try to prepare a better bid than them.
If you are an MSME looking to participate in the tender process, it would be wise to start on small projects first. Small projects will give you an idea of how tender process works in India. This will help you build your expertise for the subsequent projects. Starting with small projects and later taking on the big ones once you are ready will contribute tremendously to your industry track record.
