Tendering is not a new concept in India. For years, businesses have discovered new opportunities with government tendering. However, many still ask what is tender? How is e-tendering different from traditional paper-based tender process? What is tender in business? What are the advantages of e-tenders? With government tendering moving to the CPPP and GeM portal, today it’s a transparent, agile, and efficient process and has encouraged many small scale industries especially MSMEs to participate in government e-tendering process. We understand here the meaning of tenders, its benefits, application process, types and more.

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But first, let us start by looking at what is a tender?

What is tender?

Let’s understand the definition and meaning of a tender – what is a tender?

A tender is a formal, structured invitation from any government department/organisation/ministry or private company to suppliers to bid for the supply of goods and services.

In a tender invitation (in the form of an RFP or tender notice), the buyer (i.e., the government organisation) outlines their requirements and requests proposals from eligible and interested suppliers to bid or provide information or solutions at the most competitive prices.

In India, today government tendering is usually carried out online through the Central Public Procurement Portal (CPPP) and GeM portal (Government e Marketplace) and independent state tender portals.

With the e-tendering process, the government aims to bring transparency and fairness to procurement for the government. It also enables MSMEs to participate through fair competition, promotes equal opportunities, and supports economic growth by creating a level ground for eligible bidders to participate and build their credibility.

What is the full meaning of tender?

The term tender is used in several contexts. When it comes to business, tender meaning refers to government or private sector tender opportunities, where the government/private sector company as a buyer publishes an invitation to eligible suppliers for the procurement of goods and services.

The supplier (seller) can bid for the tender invitation by submitting online the tender application with details of their goods/services and quotation (i.e., a competitive price bid).) for evaluation and ultimately being awarded with the contract for the tender.

On a scheduled day, all tender applications are opened and evaluated in a fair, transparent manner in accordance with the procedure established.

Government vs Private sector tenders

In India, tenders are a popular form of procurement for the government and large businesses. This allows them to seek bids from genuine suppliers and keep procurement a transparent and fair process. Government tendering is usually carried out online (e-tendering) through the official state and central government procurement portals, which further enables the tendering process to be agile, transparent, and fair.

To understand what is tender, with reference to government and private sector tenders, let’s take a look at the list below highlighting the main differences between them.

What are the different types of tenders and what they mean?

We understand tender meaning and how government and private sectors publish tenders for e-procurement. We’ll now take a look at the types of tenders and understand it’s business applications.

There are four types of tenders that you should know about:

#1 – Open tenders

The most commonly used type of tenders, open tenders are open for all eligible bidders to bid. As a regular bidder, always check the ‘Tender type’ in the tender notice for open tenders.

Open tenders increase competition as more bidders are eligible. However it also keeps the process fair and gives opportunities to all business to participate in the e-tendering process. Government civil works tenders, engineering tenders, construction tenders are usually floated as open tenders to encourage regional and local participation as well.

#2 – Closed tenders

Also known as selective or limited tendering, closed tender invites are sent to a selected supplier/vendor group. These vendors have a proven track record and are required to share bid proposals based on the specific requirements. Though competition is less, it’s within a specific group with niche skills and competence, making it often difficult to quote a competitive quotation.

#3 – Negotiated tenders

In negotiated tenders, the buyer authority invites proposals from a single entity only. This is often used when the tender is an extension of an existing contract and the vendor/supplier has a specific expertise required to carry out the job. Since the invite is to a single entity, the terms and conditions are negotiated directly.

#4 – Single and two staged tenders

A single-stage tender is one in which once the vendor submits a quotation, it cannot be changed. A two-staged tender is a more collaborative approach where in the first stage the scope and work requirements are finalised, and in the next stage, pricing and financial details are fixed.

Pro tip: When going through a tender notice / tender advertisement, check for ‘Open Tenders’ that are open to the public for bidding.

Tender vs Bid vs Quotation vs Contract – Meaning and Differences

Of the several terminologies used in tendering, bid, quotation, contract and tender are some of the most commonly used. These terms specific terms and have different meaning and usage. In the next section, we take a look at the meaning of quotation, bid and contract, how these terms are used and how they are different from a tender.

Meaning and basic difference – Tender vs Bid vs Quotation vs Contract

What is tender in business?

Tender in business refers to the entire process of e-tendering. This usually begins with the tender inviting authority formally announcing a tender, inviting bidders to bid for the contract and supply of goods and services. Eligible bidders (i.e., those meeting specific qualifications and requirements) can then submit their bids and compete fairly for the contract. The tender award is finally awarded to the most suitable bidder offering the most value-for-money bid.

What is an example of tender?

Government tenders are published usually on the CPPP or GeM portal – now a unified portal: //eprocure.gov.in/eprocure/app

An example of a tender would be an invitation from any ‘organisation’ – E.g., BSNL, Coffee Board, Department of Posts, Food Corporation of India, etc. for a specific category, namely – Goods, Services, Works, to be submitted by eligible bidders withing a specific date – Closing date.

Tender examples:

Source: //eprocure.gov.in/eprocure/app?page=FrontEndTendersByOrganisation&service=page

To view more details on the tenders or refer to more sample tender invitations visit the official CPP page.

Why is tendering good for business? Benefits and Advantages of e-tendering?

Government tendering has several advantages, especially for small businesses. Let’s take a look at some of the common benefits of e-tendering for SMEs:

1. New business opportunities (equal, fair, transparent):

The government e-Procurement system is designed to keep the process fair, transparent and open to all eligible bidders. Large businesses, SMEs and startups can participate in tendering if they match the requirements. Also, to encourage higher participation from MSMEs, there are additional benefits provided, such as exemption from paying EMD (for micro and small businesses).

This naturally keep competition healthy with all parties being able to compete in the bidding process for new opportunities.

(Also read: Can start-ups participate in government tenders).

2. Revenue generation and stability

Government contracts are binding on all parties. This means that payment terms provided in the contract will have to be followed by the buyer. Winning a government tender therefore ensures that there will be steady and timely revenue generation without fear of default.

Moreover, since government projects can be for short and long term, this can be additionally beneficial for SMEs as they can stabilise their income for the long as short term based on the duration and nature of the contract.

3. Building trust and business credibility

Securing a government project and delivering it on time can build credibility for your business. Considering that government departments are very particular on the quality and standards of the project, delivering a government contract serves as a testament to reliability for your business. This in turn can help you to secure future contracts both from the government and private sectors.

4. Finding new customers and markets

If you are trying tendering for the first time or if you have won a tender for the first time, then you are adding a new customer/client to your brand. This may also come with the opportunity to do business in a new region. Moreover, since tender invites are floated by governments across the country, it also gives you the opportunity to expand your market reach.

However, don’t forget to keep applying for tenders in your state and region and leverage the benefit of being a local bidder.

(Also read: All about lsgkerala government tender portal registration, and eligibility and application for PMC online tenders).

Working on government tenders can be challenging. And this is where small businesses can gain the experience, knowledge and expertise required to work on larger projects in the future.

How to find and apply for government tenders?

Understanding tender meaning and what is tender is the first stage of your e-tendering journey. You will next have to find relevant tender opportunities, prepare a tender response strategy, and submit your tender proposal as per the guidelines.

Where to find government tenders?

There are different public and private tender websites where you can find government tenders for business.

Central government portals:

• Visit, register and login to Central Public Procurement Portal and find tenders by organisation, location, and classification
• Register on the GeM portal and use the GeM tender search option to find tenders that match your business needs

Note: CPPP and GeM is now unified and can be viewed as ‘Government e Marketplace – Central Public procurement Portal’ i.e., eProcurement for Central Government at – //eprocure.gov.in/eprocure/app

State government and department portals:

• Visit the individual portals of central/state government departments and organisations, e.g., tender portal for ECL (Eastern Coalfields Limited), DVC e-tenders portal details, ONGC tender portal, LIC tender portal
• Explore tender opportunities by state through the state tender portals, e.g., register on Karnataka tender portal, find tenders on Chhattisgarh tender portal, view latest tenders on AP e-Procurement portal, etc.

Trusted tender websites:

How to apply for tenders online?

From the definition of tender we know that it involves a bidding process that requires bidders to apply for a tender. Here’s a quick look at the tender process and general guidelines in India:

• Login and download the tender notice document from the GeM-CPPP portal
• Read through the tender requirements to evaluate eligibility
• Prepare the tender response, attach the list of tender documents, fees and tender forms requested
• Quote a price quote for the tender
• Review the tender response and submit online as per the format and within the specified timelines for the application to be accepted
• Check the tender status online (updated during the evaluation process) and the tender results for the final awardee
• Follow the steps as guided if you have won the tender

What does really tender mean? Importance for business

We under what is a tender and the tender bid application process. We also understand that tendering requires a strategic approach. But what does tendering really mean for a business?

• A tender is a formal invitation from a buyer to eligible sellers/suppliers/bidders to quote a price or bid for specific goods and services
• In tendering, the buyer or tender inviting authority has a specific procurement requirement and hence lists its specifications in the tender notice (Also read: Format of a tender notice)
• It follows a fair, transparent and efficient process where eligible bidders can apply for the tender within the specified due dates, check the tender status during evaluation and the final results of the tender awarded

As such, a tender in business means a new opportunity. It means that as a bidder one can track their progress in the tender application without having to worry about the status of their application. Bidders can also learn specific details about the final winner to compare their tender bids and prepare better for their next tender application. In several cases, if a tender application is reject, the tender authority might send a tender rejection reason which would further help the bidder to prepare for their next tender application.

In brief, the importance of e-tendering is manifold. In a formal, structured manner it is empowering many micro, small and medium businesses to compete fairly with larger businesses, stay competitive and be self-reliant.

Tips for effective e-tendering

Listed below are some quick tips to help you with tendering:

• Keep to the timelines (i.e., submit your tender proposal before the closing date) to ensure that your application is accepted and not impacted by technical glitches or any other
• Be familiar with the tender terminologies to comprehend the meaning of every item detail listed in the tender notice document
• Seek professional help (i.e., bid consulting) to write competent tender proposals
• Register your business on trusted tender portals (e.g., Tata nexarc) to get timely tender updates for your business

*This article is for information only. To view tender notices or more details, please visit the official GeM-CPPP pages.