Tender terminology in India – Terms every bidder must know of

If you are new to the world of government eProcurement and eTenders, then you may find yourself baffled at the different tender terminology and terms used in bidding.

In India, the government floats different types of tenders for eligible bidders to apply. It’s advisable to understand the key bidding terms so that you are informed and can bid accordingly. This article is a short glossary of tender terminologies used in India. Keep it handy as a quick reference before you start the eTendering process.

In the next section, we will look at some of the most commonly used bid and tender terminologies in eProcurement India.

A glossary of bid and tender terminology in India

In India, government eProcurement takes place through the Central Public Procurement portal (CPPP). Government departments, PSUs, and ministries float numerous tenders every year inviting application from eligible suppliers to bid for tenders. The process is carried out online, with all relevant information publicly accessible to encourage greater participation.

• Central Public Procurement portal (CPPP)

The CPPP eProcurement system acts as a single point for all government ministries and departments to publish their procurement needs. All eProcurement tenders published are available on the platform. Any person can browse the platform and view tender notices. However, to apply for a tender, a person must register and login to the CPPP. The platform also shares information on tender status, corrigendum, and results of tenders (bid awards).

• Government eMarketplace (GeM)

More recently, the government also launched the Government eMarketplace (GeM) portal as a one-stop portal for government departments to procure common goods and services. Sellers can list their products/services, get access to government departments and even get direct purchase orders on GeM. The portal also facilitates other functions like e-bidding and reverse e-auction.

GeM has been merged with the CPPP to create a Unified Procurement System.

Tender terms related to tender notices

In this section, we look at some of the common terms used in online and offline tendering, related to tender notices.

• Tender/eTender

A tender is an invitation to bid for a project. Government departments (and even private sector companies) have various requirements of goods and services and announce tenders inviting eligible suppliers/vendors to submit a proposal for the project. The process usually ends with evaluating the various tender submissions and awarding the contract to the most suitable bidder.

eTender or electronic tender is an online process. That is, the entire tendering process, from tender announcement, to bid submission, evaluation and award, is conducted online. It’s a paperless process that keeps the eTendering process fair, transparent, and agile.

• ePublishing

ePublishing system is the portal that allows government departments to electronically publish their tender requests, contract award announcements, corrigendum online.

• Request for Information (RFI)

This is one of the earliest stages of the tendering process, where the procurement team requests suppliers for information on their products, goods and services. The RFI document may contain a brief on the requirements, but the goal is to seek information only.

This refers to a request to suppliers to bid for the requested goods and services. RFT documents are details and contain end-to-end information on the tender requirements.

RFTs or the tender requirements document in PDF format can be viewed and downloaded from the CPPP.

• Request for Quote (RFQ)

An RFQ is a quest for a price or quotation for the products and services. It usually contains details on product quantity, cost, additional expenses, taxes etc.

In general, a BOQ or Bill of Quantity with cost details is required to be filled in and submitted along with the tender application documents.

• Request for Proposal (RFP)

RFPs are floated to qualified suppliers to propose solutions for a specific project idea or problem.

There is difference between RFI, RFT, RFQ, and RFP and as a potential bidder it’s advisable to understand the difference to evaluate if it’s a relevant opportunity for your business or not.

Bid terminology by type of tenders

When considering the list of all eTender terms, it is important to understand the different types of public tenders that the government floats.

• Open tenders

Most government tender notices are open tenders as it allows maximum participation of bidders. The meaning of open tenders refers to tender announcements that all eligible organisations can participate it. The tender request comes with complete specifications and an opening and closing date. It is the most competitive form of tendering but also fair as it provides equal opportunity for all bidders (including emerging businesses and start-ups).

• Closed tenders

Also known as limited tenders this is a type of tender where the buyer invites applications from selected suppliers only, who have a proven success record in the line of work or industry. (E.g., Closed tender invitation for high-end civil engineering projects or civil work tenders).

• Negotiated tenders

A buyer may opt for floating a negotiated tender when the scope of the project is unique and requires a specialisation. In negotiated tender the invitation is extended to a single company only, followed by negotiation on costs, terms and conditions.

Terms on tender fees and payments

There are certain tender process terminologies related to financials, fees and payments. We take a look at the most commonly used ones in this section.

• Tender fees

When tenders are announced, buyers often include a tender fee. This fee acts as a tender processing fee that the buyer charges for carrying out the multiple processes involved in tender evaluation. The tender notice clearly states the tender fee amount, mode of payment, and how to submit the receipt of payment. In general, tender fees are non-refundable unless the tender is cancelled, or it is stated otherwise.

• Earnest Money Deposit (EMD)

EMD is similar to a bid security money, often charged by the buyer organisation to ensure that only serious bidders committed and qualified for the project bids for it. It is usually refunded to those who do not win the contract. MSMEs in general are exempted from paying EMD when participating in government tendering (relevant MSME certification has to be provided).

• Quotation

Put simply, quotation refer to the final price a bidder quotes in the bid proposal for executing the project. There’s a pre-defined way to quote a price in tenders that bidders must adhere by. The quotation is the actual value of the project the bidder is asking for and not an estimate. As such, it cannot change at a later date.

General terminology used in eTendering process in India

There are several other bidding terms used during the tendering process. We take a look at some of the commonly used terms to help you in your tendering journey.

• Opening and Closing dates

Every tender comes with an opening and a closing date to ensure that bids are submitted on time. Since the entire bidding process is carried out digitally, bidders cannot submit bids after the closing dates. The critical dates are clearly mentioned in the tender notice. Always keep a note on – Bid submission start date, Bid opening date, Bid submission end date, to ensure that you don’t miss out on any suitable opportunity.

• Tender document

The tender notice is available in a document format often known as the tender document. Users can download tender document pdf and view the tender details. It contains all information, specifications, fee details, bidder’s eligibility requirements and more. The tender notice document will also list the documents a bidder must submit when applying for the tender. (Note: This should not be confused with the documents to be submitted during tender application)

• Bid document

There is often debate on the meaning of a bid document and how bid and tender documents are different. In certain cases, the RFP document is often referred to as the bid document. In general however, the bid document refers to the bid proposals that bidders submit.

• Corrigendum

A corrigendum is a notice to update or modify some of the requirements mentioned in the tender e.g., quantity, products, technical specifications, etc. The buyer organisation can update the requirements of the tender through a corrigendum notice before the due date and closing time.

• L1/L2/L3 bidders

During the financial bid evaluation process, the bid with the lowest commercials is tagged as L1. The bid with the next lowest as L2, and the next as L3 and so on. It’s a common misconception that L1 bidders win the tender contract. In reality, tender proposals are evaluated on technical and financial aspects, and the contract is awarded to the bidder offering the most value-for-money.

• Tender response/proposal document

This refers to the document uploaded by the supplier/bidder for providing the requested products and services, according to the requirements as mentioned in the tender notice.

• Tender status

This refers to the knowing the status of your tender application. If you have applied for a particular tender, you can access the tender status section on the CPP portal to learn about the progress of the tender. This ensures that you are up-to-date and the process is transparent.

• Bid Awards

Bid Awards refer to the results of the tender. Once the buyer organisation finalises a contract and the winner is announced, the results must be available on the CPP portal for visibility.

• Digital Signature Certificate (DSC)

A DSC is an electronic key that verifies and validates the identity of a person. A Class III DSC is required for e-Tendering. It is issued by Certifying Authority (CAs) and can also be used for GST, IT filing, PF etc. It can be used as a digital signature hence removing the need for manual signing. As a bidder, you will need to register your DSC to start bidding.

Tender terms A to Z

In the section above, we have tried to highlight the main tender terminology, terms and concepts used in Indian tenders. Though there are other terms used often, the ones discussed above will help you to get started with eTendering.

With thousands of eTenders published every month, it can get difficult for business owners to identify and bid for the right tenders. At Tenders from Tata nexarc, we offer a unique solution to the problem. You can find relevant tenders, get SMS and email alerts, and never miss a relevant tender opportunity!