Understanding the language used in procurement is half the battle, especially for those who are new to bidding. Many professionals use “tender” and “bid” interchangeably. And whilst there is some crossover between the two, they refer to slightly different parts of the procurement process.
The easiest way to think of tender vs bid is as follows: a “tender” is an invitation to engage in the procurement process. A bid, on the other hand, is the response that your organisation submits. We have provided a more detailed insight below, outlining the key differences between the two.
What Is a Tender?
A tender is when an organisation, as the buyer, opens an invitation for potential suppliers to bid for a contact. In the UK, they are often referred to as “Invitation to Tender (ITT)”. In America and Asia, you can expect to see “Request for Proposal (RFP)”. Both ITT and RFP are the same.
Sometimes, there is a preliminary stage referred to as a Pre-Qualification Questionnaire (PQQ) or Supplier Questionnaire (SQ). This is typical of larger contracts, where the buyer wishes to ensure that bidders without the required credentials don’t waste their time.
What Is a Bid?
The bid, therefore, is your response to the above. Sometimes it is referred to as your proposal. You should ensure you are compliant with the tender and focus your response on the specific opportunity. Usually, you will also submit pricing and may be asked to agree contract terms.
Your bid is an opportunity to demonstrate your suitability for the contract and express alignment with the buyer’s values. The best bids focus on the benefits to the buyer and the communities they serve. If you can demonstrate expertise and convince the procurement team of your value, plus support all claims with evidence, you are far on your way to submitting a winning bid.
Why Do Firms Release Tenders?
The reasons vary. A common example is that the buyer is coming to the end of a contract with a current supplier. They go to market to ensure they are getting the best possible deal. Another example is that it could be a large expenditure for the buyer, and they want to ensure value for money.
Why Bid?
Winning bids gives you access to large opportunities supported with contacted terms for security. It can be a gateway to large parts of the market and provide certainty of revenue streams for years to come.
Contact Us
Though submitting bids is a fantastic opportunity to enable sustained growth, it is a difficult process that requires allocation of resources, meticulous planning and experience. We appreciate that not every organisation can handle this internally, which is where we step in.
Whether you’re a fast-growing SME with limited internal capacity or a family-run business, with no prior experience in procurement, looking to win contract work, we can help you. We have tailorable support packages and a portfolio of consistent wins for clients across a wide range of industries.
Contact us today to arrange a kick-off call.