What is a tender and how will it benefit your business?

Do you want an answer to the question ‘what is a tender’? Are you searching for opportunities to grow your business, but don’t know where to start?

This blog tells you everything you need to know about tendering… and how it can grow your business!

What is a tender?

So, first things first, what is a tender?

A tender is a written document that is sent out to potential suppliers. A buyer will release an invitation to tender (ITT) when they are looking to outsource a solution to a supplier. This document asks for information from prospective suppliers to enable the buyer to choose a company for the contract.

An ITT forms the basis of the tendering process. Find out more about an ITT below!

Understanding tender documents  

• PQQ/SQ 

If you’re looking for answers to ‘what is a tender’, you need to learn about PQQs or SQs.

PQQ stands for pre-qualification questionnaire and SQ stands for selection questionnaire. Basically, a PQQ/SQ is used by buyers to filter through potential suppliers. The buyer will ask a series of questions and only suitable suppliers are progressed to the next stage.

Although the questions can differ with each tender, you can expect to find the following information covered in a PQQ/SQ:

• The status of your organisation
• Your finances
• How you manage quality
• Your environmental, social and health and safety policies
• Case studies and testimonials.

However, it’s important to note that PQQs/SQs aren’t always used in tendering – only with closed tenders. Some buyers will release an ITT without filtering through prospective suppliers. This is called an open tender.

• ITT

After passing the PQQ/SQ, prospective suppliers are invited to tender. Understanding an ITT is crucial to answering the question, ‘what is a tender’!

At this stage, prospective suppliers are provided with the following information:

• A cover/ITT letter
• The scope of the contract
• Submission terms
• The buyer’s profile
• Award criteria
• The project specification
• Separate appendices.

How will tendering for work benefit your business?

If you’re searching for answers to ‘what is a tender’, you’re probably curious about how tendering will benefit your business. After all, you need to know that it’s worth your time, effort and resources.

Tendering for work can help your company in many ways, including:

• Securing a pipeline of work

 When successful, bidding for contracts will ensure that your company secures a pipeline of work for the future. This is especially important for businesses that have struggled to find work as a result of the Covid-19 pandemic.

• Guaranteed pay (in the public sector)

Suppliers bidding for public sector contracts will benefit from guaranteed pay upon winning a contract. This is because public organisations are bound by certain contractual agreements.

It’s important to remember that this doesn’t apply to the private sector. So, that’s something to keep in mind when bidding for private sector contracts!

• The government is awarding SMEs

Many SMEs are cautious about tendering for work because they don’t believe they can compete with bigger businesses. However, this isn’t the case!

The UK government aim to spend at least £1 in every £3 on SMEs. This is great news for SMEs – they are actively seeking to award you with contracts!

• Develop experience 

If you’re searching ‘what is a tender’, chances are you don’t have much experience with the tendering process.

It can be daunting when you first get started. However, we recommend that you build your experience with framework agreements or dynamic purchasing systems (DPS). These are great contracts for first-time tenderers – and the experience will help you bid for larger contracts in the future!

What is involved in the tendering process?                     

So, now you know the answer to ‘what is a tender’. What else do you need to know about tendering?

Here’s a guide of things to help you navigate the tendering process:

1. Develop a checklist

When tendering for work, it’s important that you only bid for contracts that are suitable for your business. So, how do you decide whether or not to bid for a project?

You need to look at your experience and assess whether it’s relevant to the contract. Before you make your decision, create a checklist with 5-10 questions to ask yourself when you find a suitable tender.

2. Find the tender

The next step in the tendering process: find a suitable tender for your business. Finding the right opportunity takes time, effort and resources, and it’s crucial that you don’t commit to unrealistic opportunities.

Ask yourself the following questions to assess your suitability for the tender:

• Does my business meet or exceed the skills and experience required for the contract?
• Does the contract fit in with my business strategy?
• Can my business afford to tender for work?
• Will this contract help my business grow?

3. Review against your checklist

Assess your suitability for the tender with your checklist. Ask yourself the questions from step 1. If you don’t score 80% or above, don’t proceed with that tender.

4. Break down the tender document

If you’re still getting to grips with understanding ‘what is a tender’, then tender documents can be overwhelming.

Breaking the document down will make it easier to manage and ensure you answer every part of the buyer’s questions.

5. Make a plan

To create a successful tender response, you need to actually plan what you’re going to write. When you write without a plan, you could miss key information, and this could cost you the contract.

It’s also helpful to plan for any issues or delays that could impact the tender writing process. If you have a detailed plan, you’ll be prepared to deal with these problems and get back on schedule.

6. Gather your evidence

 When tendering for work, you need to provide the buyer with relevant case studies. You’ll usually be required to provide three case studies that demonstrate your experience with similar contracts. This is to show the buyer that your company is capable of delivering the contract – on time and in budget.

7. Write your first draft

Now you know the answer to ‘what is a tender’, you’ll understand how crucial this step is to the process. It’s time to write your first draft.

The first draft of your tender response is important. However, you should keep in mind that your first draft is likely to change as the tendering process progresses.

8. Review your response

Mark your response against the scoring criteria and make sure that you’re meeting the buyer’s specifications. You might have forgotten something when you produced your first draft – and that’s okay! This is your chance to make any amendments or add additional information.

9. Proofread

 Once you’re happy with the content of your tender response, check it for spelling mistakes and grammatical errors. We suggest asking someone else to proofread your response. It’s hard to spot mistakes in your own work when you’ve read it so many times before.

10. Submit your response

Now it’s time to submit your response. Make sure you have plenty of time to submit. If you don’t leave yourself enough time and the buyer’s portal crashes, you’ll miss out on the tendering opportunity.

Anything else we can help with?

If you have any more questions like ‘what is a tender’, then Tender VLE will have the answers for you.

Join the UK’s first-ever virtual learning environment to offer a range of free tender-related videos. Whether you have years of tendering experience or are starting out from scratch, Tender VLE will have something for you.

Think there’s something missing? If you can’t find the video you’re looking for, then tell us more about the content you’d like to see!

See something you like? Contact our team for a quick chat and start your Tender VLE journey today.