School of Architecture

Meenakshi College of Engineering

Professional Practice and Ethics-2

TENDER
Tender means an invitation to offer for an item/items or work. All Public Sector
purchases/Contracts in India, over a certain value (above `2 Lakhs) has to be publicly
notified through Tender Notices which are advertised through All India Newspapers, Trade
Journals, Departmental Publications and Notice Boards, and on Internet.

Who Floats a Tender?

A buyer which can be either Government or Large Private Company , can float a
Tender as and when they need to buy Goods, hire services or construct something. Generally
tenders are floated by Government as it is a mandatory requirement for them.

Why Tenders?
Tenders are open invitation to buy or sell goods/services/contracts. Those who are
interested in supplying what has been advertised, can respond to a Tender & submit their best
competitive offer. The best competitive offer (Lowest Bidder or L1) is generally selected &
the contract is awarded to L1 Bidder.

Why Tenders are published in Newspapers?

Tenders are published in newspapers for the following reasons;

It is a mandatory requirement for Government Organisation form Transparency point of
view
For wider publicity & ensuring better & higher response from bidders from across the
world
To ensure that everyone gets equal opportunity to participate in a tender & transparency is
maintained
As per CVC (Central Vigilance Commission), now tenders can be also published on
Websites.
The cost of publishing Tender in Newspaper is very high, and hence the same is
recovered from bidders by means of selling them Tender Documents Fee.

Types of Tenders:
Tender can be classified based on the requirement category or Procurement Type.
There are various types of Tenders. However, main Categories of the Tenders are listed
below:

Open Tender:
Open tender is an arrangement where an advertisement in local newspapers or trade
journals invites contractors to apply for tender documents. Open Tender is a transparent
process which ensures that only the contractor with the best price and meeting all the
technical requirements will win the tender.

Limited or Closed Tender / Selective Tender:

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School of Architecture
Meenakshi College of Engineering
Professional Practice and Ethics-2
In Limited Tenders, only pre-qualified or known bidders are allowed to participate. Limited
Tenders are not advertised in newspapers, as a result other bidder generally do not come to
know that such tender is floated. The Lowest Bidder or L1 generally wins the contract.

Single Tender:
Single Tendering means sending the Tender to one particular party. Normally, it is
either for an item where there is only one supplier or for an item where the purchaser has
developed confidence in one supplier only and would just like to verify the current price,
delivery etc. Single Tenders are also sent for items of proprietary nature.

Negotiated Tender:
Under Negotiated Tender method normally one contractor is approached and such
tender mainly used for specialist work such as lift system or airport project at big level, in
such case there are limited number of contractor who do such work in the market. It is based
on one-to-one discussion with contractors to negotiated the terms of contract.

Item Rate Tenders:

In this type of Tenders the contractors are required to quote the rates for each item
mentioned in the price bid. The quantity to be executed is given in the price bid.

Percentage Rate Tenders:

In this type of Tenders a detailed estimate of the quantity of work to be carried out
along with the estimate rates is given in the price bid form. The Bidders are required to quote
the amount in percentage above or below or at Par.

International Competitive Bidding:

A method for procuring goods and services that requires notification to the
international community. Bidders from eligible countries, as defined by the contracting
agency or country, are given an equal opportunity to bid.

Request for Proposal:

In RFP a company is required to submit only the Technical proposal.

Request for Quote:

It is the same as RFP but more specific, and with more details in each part. An RFQ
(Request for Quote) is used when an organization has already decided on a particular type of
product or service, and wishes to see competitive pricing from multiple vendors of that
service.

Request for Information:

A RFI (Request for Information) is issued when an organization wants to gather
information about a specific company or a suppliers products or services in an initial data
gathering phase. Usually with this data, companies can decide if they would like to further
explore purchasing that product or service, and can qualify the produce/service/vendor for
future conversations.

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School of Architecture
Meenakshi College of Engineering
Professional Practice and Ethics-2
Expression of Interest:
Expression of Interest is similar to RFP. EOI stands a business expression indicating an intent
to bid

Single Envelope Bidding:

In such Tender both the Price Proposal and the Technical Proposal are submitted in a
same envelope. The Contract is awarded to the Bidder whose Bid has been determined to be
the lowest evaluated substantially responsive Bid.

Two-Envelope Bidding:
Bidders submit two sealed envelopes simultaneously, one containing the Technical Proposal
and the other the Price Proposal, enclosed together in an outer single envelope. Both
Envelopes are then put in a Big Envelope, is sealed & submitted. First Technical bid is
opened & price bid of only those bidder who are found technically qualified are opened
subsequently at a later date.

Multiple Envelope Bidding:

In such Tender, EMD or Design Drawings is submitted in 1st Envelope, Technical
Bid is Submitted in 2nd Envelope & Price Bid is submitted in 3rd envelope. On the basis of
requirement bid can be submitted in separate envelope. First EMD envelope & pre-
Qualification envelope is opened. Technical envelope of only those bidders who pre-qualify
is opened and at last those who are found technically qualified, their price bid is opened.

Earnest Money Deposit:

To ensure that a Bidder does not submit a Dummy Bid or back out at time of tender
opening, The Client (Government Department or Organisation) collects a small refundable
fee from each bidder and is always in form of a Demand Draft.
EMD is returned when all Bids are opened & tender is awarded. In case Tender is
cancelled, the EMD is returned. Most of the time the EMD is not credited into Government
Bank but is kept with Buyers in as it is form. After Tender opening the same is returned.
Every tender, other than single tender shall be accompanied by Earnest Money Deposit, not
exceeding one percent of the value of the procurement by means of a demand draft or bankers
cheque or pay order. After Bid is opened, if a Bidder refuses to take the contract, than
his EMD is forfeited.

Bank Guarantee or BG - In High Value tenders the EMD can be as high as Crores of Rupees.
In such Tenders Bidders will not want to make a DD of the same and give it to
Government because there will be huge interest loss till the time EMD is not returned. Hence
in all such Tenders instead of EMD, Bank Guarantee is also allowed.

E-Tendering
An internet based process wherein the complete tendering process -
from advertising to receiving and submitting tender-related information online. This enables

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School of Architecture
Meenakshi College of Engineering
Professional Practice and Ethics-2
firms to be more efficient as paper-based transactions are reduced or eliminated, facilitating
for a more speedy exchange of information.

There are ten key elements to a complete E-Tender System including:

1. Bid Advertisement If the project is not by

invitation only it is important to be able to
notify interested bidders that there is an
opportunity to bid on.
2. Invitation to bid For when there are
bidders who are to be proactively advised of
the opportunity.
3. Prequalification For some projects the
bidders must demonstrate their competence
and ability to complete the work prior to being
invited to submit a bid.
4. Document Distribution Distributing the
drawings, specifications and any
supplementary information is an essential
element of the process. When properly
integrated into the system there is no
possibility of missing or incomplete
information being used in the formulation of a bid submission.
5. Addenda Notification and Distribution All bidders must be quickly notified of any
new addenda and be provided quick and easy access to the information to avoid delays or
errors in the submission of bids.
6. Creation of the Bid Form The system must provide the ability to securely create the bid
form including all the varied elements that make up a construction bid at a minimum
including; base bid, separate prices, alternate prices, unit prices, cash allowances, stipulated
sums, tax clauses, bond requirements, time to completion, labour units and other required
schedules.
7. Submission of Bid Security The bid bond when specified is an integral and essential
element of a complete bid submission and must be able to be included as part of the bid
package.
8. Submission of the Bid The ability for bidders to follow their normal practices when
preparing the complete submission is essential. It must be a fully secure environment that
offers the ability to; apply for and receive a bid bond, allow others in the bidding company to
work on the submission if required, withdraw the bid prior to closing time if required and of
course enter all required elements of the bid call.
9. Bid Tabulation Once the bid closing time had been reached the recipient must be able to
easily compare and evaluate the information using a tabulated set of bid responses.
10. An Audit Trail A complete and accurate log of all the activities required to complete
this process is essential to assist in avoiding and resolving issues of non-compliance or claims
arising from missing or incomplete information.
These 10 elements when enabled within a secure and reliable IT infrastructure combine to
form a complete bidding system that provides every participant in the process the tools and

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School of Architecture
Meenakshi College of Engineering
Professional Practice and Ethics-2
information they need to successfully complete the aspect of the bidding process that they are
responsible for.

Typical Advertisement

Benefits to E-Tender:
Bidders benefit from a fair and open tendering process.
Competition is enhanced, which can lead to more competitive prices for contracts.
Save time and money for suppliers and buyers.
Facilitates prompt completion of contracts.
Enhances security and confidentiality.
Provides an efficient and cost-effective advertising medium for public authorities.
The required documentation can be made readily available.
Enhances transparency and fairness.
Administrative and transaction costs are reduced.
Instant secure access to the full tender document set is only available to those users
issued with a digital certificate
This will eliminate the printing, binding and courier costs associated with the
traditional paper based response process
Regular reminders of important deadlines in the tender award process and changes or
amendments as they occur

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