Chapter 3 What is tendering?

Tendering is a process principals use to seek competitive offers for the supply of work, services or goods from potential contractors (for example, builders, suppliers, consultants).

Tendering allows principals (purchasers) to:

  • control the contract terms and the other documents that potential contractors (tenderers) are to allow for;
  • regulate the conduct of everyone participating in the process; and
  • get offers (tenders) that look similar to make it easier to assess which is best.

A request for a quotation or an invitation to negotiate are not tendering processes because they may end up using contracts that have not been prepared or controlled by the principal.

Governments like to use tendering processes for procuring contractors, consultants and suppliers because they promote competition and help to achieve best value for money, in a fair, consistent and transparent manner (probity).

Tendering processes are increasingly being carried out using the internet (e-tendering) with tenders lodged electronically rather than by lodging hard copy tenders in a tender box or delivering them to a street address.