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Tenders, a means for fair competition

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The word tender means an offer, usually in writing, to execute work or supply goods or services at a stated price and under stated conditions.

Public institutions put-out to tender or invite to a tender in respect of execution of works, or supply of goods and services.

Dictionary of Purchasing and Supply defines tender and tendering as offers from tenderers without collusion, usually sealed envelopes, delivered by a time and date specified in the invitation to tender, for supply of goods and services.

Such tenders are opened only at the time and date specified by a tender panel of qualified persons who record the necessary details.

The request or the invitation is usually the document used to invite tenders.

The invitation is normally written because of the complexities and the legal nature of the process.
So far, the explanation resembles an easy process, but in reality, the process of tendering is complex.

Today’s competitive demands require the procurement process to be accomplished in a capable, ethical and professional manner.

It is also against the fact procurement grey areas lie in the tender preparation and post award activities where man-made complexities are inherent.

A tender document has three distinct lists of requirements. Mandatory requirements are supplier qualification specifications considered first. The technical specifications of goods or services are the second part.

The last part consists of commercial aspects. For the tender process to be accomplished professionally, the three distinct requirements must be specific, measurable, attainable, realistic, and time bound.

Mandatory requirements include the process one should follow to purchase, present and submit the tender document.

The mandatory requirements weed out chancers, unregistered and fly-by-night companies in tendering process.

The information requested include company registration documents, tax registration and clearance for local companies, any requirements for trade or industry registration as in the case of specialist services such as security, construction, etc.

Tender validity period and bid security are also defined in this section.

What is important to note is a buying entity may not disqualify a tenderer on the grounds of requirements not stated as mandatory in the document.

The method of receipt of tenders, the closing date and time form part of the mandatory requirements.

The use of words such as must, should and may — would need to be carefully considered. Requirements must be fair, attainable and promoting meaningful competition.

Technical specifications need to be neutral. The use of brand names must be limited to exceptions in tendering.

A specification is a statement of attributes of a product, process or service. A product may be defined by the performance or conformance to requirements.

A conformance specification tells the tenderer the minimum expectations of the product. Alternatives and variations may account to counter offers that can be rejected in tendering.

A functional specification details the characteristics of a product with regard to its intended capabilities.

Buying organisations try to avoid counterfeits by using brand names and the practice is not consistent with the principles of fair competition.

The only way round this problem is tightening the mandatory specifications to eliminate suppliers of counterfeits.

The commercial aspect of tenders is considered last after the mandatory and technical requirements.

Some tender documents are designed combining all the three requirements as a single process.

The risk is that objectivity is easily lost when mandatory, technical and commercial issues are evaluated at the same time. The tender evaluation process follows criteria laid down in the tender document.

It is advisable to seek technical expertise in designing tenders when such skill is not available within your organisation.

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