The activities associated with preparing, inviting, receiving, reviewing and selecting bids or proposals from suppliers and outsourcing partners. This may include understanding the product or service to purchase, developing the tendering conditions and advertising the tender.
General prerequisites to tendering include:
- Sufficient sellers in the market
- Value of purchase justifies expense for seller and buyer
- Clear product definition or standardization
- Sufficient purchasing lead time to support tendering
Tendering works best in a buyers market after above prerequisites are met.
Selection of a supplier is generally based on multiple criteria, of which price is one. Other objectives include: Product specifications, delivery terms and conditions, delivery performance, risk.
Products or services that lack the clear product definition or standardization prerequisite generally apply the Two-Stage Tendering process, where requests for specifications are filtered through Tendering and Pricing, Terms & Conditions are addressed through Negotiation.
Alternative names include: Bidding, RFP, RFQ.
|PTC||Pricing, Terms & Conditions||PTC|
|RFP||Request for Proposal||RFP|
|RFQ||Request for Quote||RFQ|
Note: Common inputs and outputs are listed in alphabetical order. Other inputs and outputs may be required to support varying use cases.