Call for tenders – How to search for pro­cure­ment bids

Requests for tenders by public service entities and gov­ern­ment de­part­ments like the De­part­ment of Defense, De­part­ment of Energy or NASA are highly sought after. That’s because public service contracts are usually for a longer duration and are viewed as pres­ti­gious in many in­dus­tries. In 2016, the US gov­ern­ment spent around $416 billion on such contracts. To ensure that all companies have a fair chance to secure a service contract, au­thor­i­ties must make a call for bids. In­ter­est­ed or­ga­ni­za­tions can then apply for a tender by a set deadline. Public au­thor­i­ties procure services according to the proposals received that best match their re­quire­ments and available funds.

The US is part of the World Trade Or­ga­ni­za­tion’s Agreement on Gov­ern­ment Pro­cure­ment (GPA).

A call for tenders is the process whereby a gov­ern­ment or private or­ga­ni­za­tion invites service con­trac­tors and suppliers to make an offer to execute a proposed project. This could include the supply of parts (e.g. in aerospace sectors) or the provision of services (e.g. marketing ini­tia­tives for an education de­part­ment). Pro­cure­ment notices are not only used by gov­ern­ment or public sector au­thor­i­ties but are also fre­quent­ly employed by private companies and in­di­vid­u­als. However, contrary to private companies, public sector entities are legally required to tender, and pro­cure­ment is heavily regulated.

Tendering for state-funded projects must be ac­ces­si­ble to all companies. Calls for tenders are therefore usually published in spe­cial­ist journals or online in dedicated portals. Au­thor­i­ties or companies may first release a request for proposals that allow service providers to discuss the methods and tools they would use to fulfill a contract. Pricing can also be discussed at this point. A tender is the procedure of bidding on the proposed project once the spec­i­fi­ca­tions and price ranges are es­tab­lished.

In many countries, gov­ern­ment de­part­ments who receive tax or federal funding are legally required to publicly tender service projects. That’s because leg­is­la­tion states that public money should be used as ef­fi­cient­ly and eco­nom­i­cal­ly as possible. Strict pro­cure­ment pro­ce­dures also serve to minimize cor­rup­tion and nepotism when awarding public contracts.

In­creas­ing­ly, private companies are using tenders to obtain the most eco­nom­i­cal offer for their projects. This allows them to minimize costs and increase their prof­itabil­i­ty.

Contrary to public clients, com­mer­cial or­ga­ni­za­tions aren’t required to adhere to strict pro­cure­ment reg­u­la­tions set out in the Code of Federal Reg­u­la­tions. The Federal Ac­qui­si­tion Reg­u­la­tion is the main document outlining gov­ern­ment pro­cure­ment leg­is­la­tion.

There are four types of pro­cure­ment pro­ce­dures in the tendering process:

• Open tender: The majority of public tenders are procured via open pro­ce­dures. This means that anyone can bid on a contract to supply services or goods in line with the con­trac­tu­al re­quire­ments. Open tenders are used where there are no special cir­cum­stances or re­quire­ments. The number of bids received is not re­strict­ed in an open tender. It provides the best op­por­tu­ni­ty for new companies and start-ups to secure gov­ern­ment work.
• Re­strict­ed or selective tender: In a re­strict­ed procedure, a shortlist of suppliers is created. This may include a pre-qual­i­fi­ca­tion survey to determine suitable con­trac­tors. Selected companies are then invited to tender. De­part­ments and companies use selective tendering to reduce the ad­min­is­tra­tive costs that a large number of bids could burden them with, and to ensure that con­trac­tors match their re­quire­ments. Highly complex or secretive projects often involve re­strict­ed pro­ce­dures.
• Ne­go­ti­at­ed tender: This type of pro­cure­ment procedure is mostly used within the en­gi­neer­ing and con­struc­tion industry. A ne­go­ti­at­ed tender occurs once a company has selected one or two suppliers and ne­go­ti­ates with them on certain aspects of a contract. This may involve fee ne­go­ti­a­tions or could concern specific con­trac­tu­al oblig­a­tions.
• Com­pet­i­tive dialog tender: Sometimes, a client may specify the desired outcome of a contract, but remain unsure as to how to reach their goal. For example, a public authority may require new software, but not know how to implement it. That’s where a com­pet­i­tive dialog can be useful. A hybrid of a re­strict­ed and ne­go­ti­at­ed tender, the first stage of a com­pet­i­tive dialog enables companies to discuss and negotiate in­di­vid­ual aspects of a project. During the second stage, an in­vi­ta­tion for tenders is extended.

The US and the European Union are both par­tic­i­pants in the WTO GPA which means that US companies can bid on European contracts and vice versa. However, certain re­stric­tions apply. For example, US companies cannot bid on EU contracts within the water or urban transport sector, airport services or ship­build­ing sector.

Na­tion­al­ly, the Federal Ac­qui­si­tion Reg­u­la­tion sets out threshold values for federal contracts. All federal pro­cure­ments above $25,000 must be made public. Upper threshold values are $180,000 for goods and services contracts and up to $6.932 million for con­struc­tion projects.

There are no minimum time frames for gov­ern­ment pro­cure­ment, but US agencies must allow enough time for bids to be made.

Thanks to the Internet, searching for tender op­por­tu­ni­ties is now rel­a­tive­ly easier. Multiple websites regularly publish calls for bids. Among them, Glob­al­Tenders.com provides a list of contracts available for tender sorted by country. Federal pro­cure­ment notices for the US are also published on Beta.sam.gov. Con­trac­tors and in­ter­est­ed parties can specify the type of contract, length, service clas­si­fi­ca­tion and location they are in­ter­est­ed in.

There are also spe­cial­ist portals such as Cw­c­ten­ders.com which lists contracts for in­fra­struc­ture civil works and con­struc­tion projects. Similarly, Ittenders.com focuses on in­for­ma­tion tech­nol­o­gy contract pro­cure­ment.

Pro­cure­ment notices in the EU are published via Tenders Elec­tron­ic Daily (TED).

If a company is in­ter­est­ed in bidding for a tender, they can request the pro­cure­ment doc­u­men­ta­tion via the relevant authority or directly from the client. The details received should include in­for­ma­tion on the technical expertise and skills required. They should also provide an in­di­ca­tion of the ex­pec­ta­tions from the client and spec­i­fi­ca­tion of services required. Usually, bids will include in­for­ma­tion on the ap­pli­ca­tion procedure and deadlines.

In general, the following re­quire­ments apply to all par­tic­i­pants taking part in a pro­cure­ment procedure:

• They must have the necessary spe­cial­ist knowledge or skillset and may be required to submit proof in the form of previous work contracts or reg­is­tra­tion cer­tifi­cates.
• The company must prove its op­er­a­tional or per­for­mance potential by sup­ple­ment­ing a list of personnel and financial resources.
• A company must show that it is re­spon­si­ble and reliable by sub­mit­ting cer­tifi­cates of conduct and proof of timely tax payments.

Tenders may call for ad­di­tion­al re­quire­ments depending on the project or services required.

Where a company meets all re­quire­ments and is in­ter­est­ed in securing the project contract, it needs to send off all completed and error-free doc­u­men­ta­tion to the con­tract­ing authority or client. Once the deadline has passed, au­thor­i­ties will assess all ap­pli­ca­tions.

When writing a tender, it’s important to focus on what the client wants and how your company may fulfill their brief most ef­fec­tive­ly. Some of the important points to cover when writing a tender are:

• Skills. How does your company meet the needs of the client? Propose solutions to the stated problems by focusing on your spe­cial­ist skillset and ex­pe­ri­ence.
• Qual­i­fi­ca­tions. If a client has requested qual­i­fi­ca­tion doc­u­men­ta­tion, make sure to include this in­for­ma­tion.
• Value. Discuss proposed fees and how your company provides value for money. It’s not nec­es­sar­i­ly the lowest bid that wins a contract. Often, con­trac­tors are chosen depending on what they can bring to the table.
• Resources. Demon­strate that you have the necessary resources to finish the project. This includes staff, fa­cil­i­ties and tools/machinery. You can emphasize the strengths of your team and elaborate on why they are the most suitable for the project.

The following stages demon­strate the procedure for an open tender (i.e. a public in­vi­ta­tion for tender). These steps apply to most tenders with the exception of re­strict­ed pro­ce­dures and where no public in­vi­ta­tion to tender is issued.

1. First, a public sector authority or com­mer­cial company iden­ti­fies a need and outlines the specific ob­jec­tives to realize a goal. These can be sum­ma­rized in a service de­scrip­tion.
2. Then, it creates the tender documents which detail the services expected. Special qual­i­fi­ca­tions or skills required to meet the demands of the project as well as legal and con­trac­tu­al con­di­tions are detailed.
3. The award procedure is based on expected per­for­mance, applicant re­quire­ments and cost cal­cu­la­tions. In the majority of cases, calls for tender are open. Other types of pro­cure­ment pro­ce­dures are only made where necessary.
4. The call for tenders is published online or in special print media. Tenders must include contact in­for­ma­tion so in­ter­est­ed parties can request more in­for­ma­tion or download the specifics.
5. In­ter­est­ed ap­pli­cants submit their completed offer and all necessary doc­u­men­ta­tion such as cer­tifi­cates, ref­er­ences, fee cal­cu­la­tions, service de­scrip­tions, and other ex­pla­na­tions.
6. The awarding body securely stores the ap­pli­ca­tions until the deadline has passed. Ap­pli­ca­tions are only viewed once the deadline has been reached.
7. Tenders are subject to a formal review upon opening. Documents con­tain­ing formal errors are au­to­mat­i­cal­ly excluded.
8. Ap­pro­pri­ate offers are evaluated. Clients will pay attention to a company’s qual­i­fi­ca­tions and ex­pe­ri­ence. Proposed costs are assessed against com­pet­i­tive offers.
9. Where an offer is deemed suitable and eco­nom­i­cal, the awarding authority decides which company to award the contract to. In rare cir­cum­stances, for example, where none of the tenderers are deemed eligible to fulfill a contract, the call can be canceled.
10. Un­suc­cess­ful bidders are usually debriefed. According to US reg­u­la­tions, they are entitled to a brief ex­pla­na­tion for why they did not win a bid.

Click here for important legal dis­claimers.