Tender Procurement Process Explained

This guide to the tender procurement process draws together many previous posts in order to provide a useful tool for tendering. Hopefully it will help you to be more successful with your tender bids!

The Stages of the Tender Procurement Process

The chart below shows the various steps that form a typical tendering process for a large contract – smaller value contracts may well be simpler. Organisations within the public sector often run slightly different processes too.

Tender Procurement Process Flowchart

Form Procurement Team

The procurement team will typically involve procurement; the budget holder and others involved in managing the contract; possibly representatives from health and safety, human resources, quality management etc.

TIP: The higher the value of the contract, the bigger the procurement team – often involving senior management. Also the tendering process becomes more drawn out. The same applies to high-profile purchases.

For example a very high-value contract, or one that involves contracting out for the first time, will often involve a large team (including directors) and have a full tender process (as shown in the chart). Conversely, smaller contracts may have a much simpler tender procurement process. This is seen in the public sector where high-value contracts must be advertised as EU / OJEU tenders whereas smaller jobs might be let via a mini-tender.

Develop Tender & Evaluation Criteria

The procurement team then agree what the tender will involve eg:

  • Specification or general requirement
  • Supplier requirements and mandatory requirements (eg ISO standards)
  • Questions
  • Tender rules or instructions
  • Evaluation criteria (how it will be scored eg 60% quality / 40% price)
  • Contract (eg one-off, term or framework)
  • The tender procurement process (eg PQQ or not)

Pre Qualification Questionnaire (PQQ)

This is an initial selection process to help sift potential suppliers for suitability. It is used to create a long-list of companies to be invited to tender. This stage of the tender process might be by invitation or open to everyone (eg OJEU tenders).

The qualification stage might take the form of an approved supplier list, an initial screening interview or a formal PQQ (questionnaire to assess against minimum requirements). Some tenders incorporate aspects of the PQQ within the tender therefore eliminating this stage.

Issue Tender

The invitation to tender (ITT) will be issued to the long-list of selected potential suppliers. This might involve a set of questions to be answered along with a pricing matrix. Alternatively it could be less formal – simply asking the bidder to submit a formal proposal and a price.

Public sector and corporates tend to use formal ITTs – especially for higher-value tenders. NB e-tenders are becoming increasingly popular.

Tender Briefing Meeting

It is not uncommon for the tender procurement panel to hold supplier briefing meetings (pre-tender meetings). Their intention is to help clarify the tender and answer any questions.

Initial Evaluation

The tender panel mark each bid against their agreed evaluation matrix. This results in a league table of the highest and lowest bidders’ scores.

Supplier Short-list

The evaluation is then used to select a short-list of potential suppliers. The amount of bidders in a short-list will depend on the nature of the contract eg a framework agreement will require a number of suppliers to be awarded a contract whereas another tender might only have one winner.

Presentations, Interviews & Visits

Short-listed bidders are sometimes subject to further evaluation by means of a tender short-list presentation or a question and answer session. This might be extended to a visit to supplier’s premises and possibly meeting some of their customers.

Again, the tender panel will assess this against their pre-determined evaluation criteria.

Selection

Whatever the tender procurement process, the tender panel will arrive at its final scores and will use those to select the best performers and award contract(s).

Negotiations

The limit of tender negotiations depend on the nature of  each individual tender procurement process – a formal tender may not offer any scope for negotiation whilst others will allow small negotiations. This can include some aspects of price (eg additional items), contract wording and specification (eg items that don’t affect the overall service). It is unlikely that there will be opportunity for any major negotiation – especially not on the overall price.

TIP: Be sure that you know what is negotiable before finalising your tender submission by asking Tender Clarification Questions otherwise you could find yourself in a sticky situation!

Contract Award

Once everything in the tender procurement process is finalised, contract(s) are awarded.

High-value EU tenders have a minimum 10 day standstill period (Alcatel). This is to allow unsuccessful bidders to challenge the tender procurement process should they feel it was flawed. Contracts will not be issued until this has been completed.

Unsuccessful bidders should have a chance to get feedback on tenders. This helps companies to help gain a better understanding on how to improve in future.

You may also find these useful in understanding the tender procurement process:

This overview of the tender procurement process has attempted to draw together many previous posts to provide a useful tool for tenderers. But it is by no means fully comprehensive. Please do add your ideas and comments below to help improve this and make it an even more useful resource.

9 thoughts on “Tender Procurement Process Explained”

  1. Tony,

    Excellent and valuable as usual. This really helps to clarify the process and help organisations to understand the sequence and time involved. Of course, as you said, for smaller bids this process may be slightly different. I particularly liked the point about negotiations as some organisations may believe that there is no possibility for this. What I would additionally add is the reminder that this process is time consuming and there shouldn’t be a reliance on winning the contract, because after much effort you can still be unsuccessful.

  2. Thanks for the feedback and thoughts Morton – you make a very good point about time and success or lack of it.
    I should have added a link to Qualifying Tenders to Increase Hit Rates

  3. Thanks to Tony Zemaitis. This has given me a clear knowledge of tendering process as a procurement student of Jomo Kenyatta University of Agriculture and Technology-Kenya

  4. This is great advice for anyone starting out in the buying and bidding industry! I’ve found out lots of valuable information on Procurious, it’s been so valuable to my career on procurement.

  5. felicity nzilani mbai

    thanks alot its quite informative,,am so new in the industry and am realy gaining courage through this information .have never done any tender but i will try sooner than later

  6. What if you want to leave your position and therefore not continue providing the service?

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