Differentiating Bids and Tenders from One Another

People are frequently confused concerning the difference between bids and tenders. They are two separate things, in fact; some individuals state that tenders fall under bids as they are essential documents that secure the bids. 

 

Simply speaking, a bid is the presentation of how much a business is willing to charge for the project to be executed and a tender, by contrast, is essentially the document that shows how the project will be executed using the project requirements given by the clients. They perform hand in hand in convincing the clients that a certain company will get the job completed in a way that fits their liking. Essentially, a bid is backed up by a tender document…this is the easiest way of differentiating bids and tenders. Lately, however, people freely switch these words due to the general nature of how bids and tenders are executed.

 

The bid for important projects commonly comes in three forms; an IFB or an Invitation for Bid, an RFP or Request for Proposal and the RFQ or Request for Quote. The IFB is a contract also known as the Sealed Bid, which is a complete bid package made up of all of the standard prerequisites of the contract or project. For this, there’s no more room for negotiation as its elements already are fixed. The RFP, however, is a negotiable contract; there may be adjustments with regards to the certain standards along with the pricing; it is a more adaptable agreement for bidders. Lastly, the RFQ offers bidders a chance to request certain details about the project, like the cost; it’s not a binding document, which naturally signifies that it's also flexible. Every bid package comes with a conventional cost range but this might differ according to how high-profile the project is or where the project will be executed. In the United States, $100,000.00 is the normal range but in other areas, the range might be so much higher or lower.

 

A tender in comparison is either open or closed. An open tender means that any group can get involved as long as they can create a tender document that is compliant to the guidelines of the project. Open tender is often publicised in daily periodicals. For a closed or limited tender, only invited groups get to bid on the contracts or projects. Generally, the invited groups are those which have already proven themselves in the field that the project falls under.