Understanding the Business Tender Process: A Step by Step Guide

In the United States alone, $510 billion was spent on business contracts in 2017. For 2018, this number is already over $200 billion. This doesn’t even take into account the opportunities globally.

Government contracts can be a lucrative market for any business able to navigate the tender process effectively. The problem is, the procedure can be tricky if you go into it unprepared.

Luckily, there are some steps you can take to help your business create a well-organized and successful tender for work.

What is the Tender Process?

If you have never submitted one before, you may not know what tenders are, much less how to tender. Simply put, the tender process is how a company bids for government contracts.

This process is open for all companies that meet the qualifications, including small businesses. In fact, U.S. law requires approximately 23% of federal contracts to be awarded to small businesses each year.

What’s Required to Become a Tender Business?

To set up as a tender qualified business, you need to make sure you have all the required documents:

  • A Data Universal Numbering System (DUNS) number.
  • Proper classification codes such as the federal supply and service codes. The needed codes will partially depend on which department you want to submit to.
  • Up-to-date insurance.
  • A completed business plan.
  • Thorough financial records.
  • Efficient and up-to-date protocols clearly defined.

You must make sure these requirements are in place before going through the tender process. Your proposal will not make it past the first stage of the evaluation process otherwise.

The Tender Procedure Step-By-Step

Locating a Tender for Work

The first step in the tender process is to locate an open tender request. There are four types of tender requests, but if you are just starting out your best bet will be with an open tendering.

An open tender is a request with no restrictions. These are open requests for submissions.

Make sure you pick a proposal request that is in line with your business’ values and policies to ensure a better chance of success. The requests will have all the details you need to determine if your company is a good fit.

The request will also lay out exactly what you need to do to qualify for the project. Pay close attention to the criteria provided to ensure you follow the process rules exactly.

Responding to the Request

Once you’ve located a request that fits with your company, you need to create a presentation that will highlight the value your business can add to the project.

This presentation includes addressing any risk factors involved and how your company is able to handle those risks. Other things to include are:

  • An outline of your proposed solution.
  • Clear pricing requirements.
  • A schedule for completion of the project.
  • Qualifications and experience.
  • What sets your proposal apart from the others.

Keep in mind, you want to prove your proposal adds the most value for the money spent.

Evaluation of the Proposal

Once you have submitted your detailed proposal, following all the criteria provided, your proposal will go into the evaluation process. This is not an active part for your business.

The evaluation process can take some time, depending on how many tender proposals were received. Once all the proposals are reviewed, each company will receive a notice to whether they were accepted or rejected.

If you were accepted, congratulations. It’s now time to officially sign the contract and get to work.

If not, you can request a debriefing, outlining why you were not successful. You can use that information to help you with the next tender process.

Need Help Locating or Submitting Tender Proposals?

The tender process can be easily managed if you go into the process with a clear plan of action.

Making sure you understand the process behind the business tender process is a good first step to creating a successful proposal.

If you would like more tips and resources for writing a successful proposal, check out our blog.

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