What is A Tender?

what is a tender in south Africa

What is a tender is a question that must be answered by any person that wants to get started in the tender business. A tender is an offer or invitation to bid for a specific project which is sent out to potential suppliers by an organ of state or a company requesting the potential suppliers to provide certain information which is then used to evaluate who the preferred supplier would be for the particular project. The organ of state or company would generally rely on applicable procurement policies in selecting the most suitable supplier to whom to award the tender

In answering the question of What is a tender in South Africa or in any country across the globle, It is important that the term Tender and Tendering are not confused. Tendering is the process by which an organ of state or a company who is in need of goods or services invites suppliers to submit a proposal or bid to provide these goods or services. While a tender is a request, tendering refers to the process. 

Types of Tenders in South Africa

To further put clarity on the question of What is a tender, it is important that we are able to differentiate the different types of tenders in South Africa or globally which every person would come across. There are 3 different types of tenders in South Africa that are worth taking note of within our context namely:

I. Open Tenders

Open Tenders are tenders that are open to everyone that wishes to apply. It is the most competitive type of tender. Government tenders are generally classified as open tenders.

The intention of this tender type is to promote transparency, fair play and competition in the procurement process.
In an open tender, the organization issuing the tender publishes a notice or advertisement inviting all interested parties to submit bids. The notice will outline the project or procurement opportunity requirements, including the goods or services required, the delivery schedule, and any other relevant information. The notice will also provide information on how to obtain the tender documentation and the deadline for submitting bids.

To participate in an open tender, suppliers or service providers must meet the criteria specified in the tender documentation. This may include having the necessary experience, qualifications, and financial resources to undertake the project or supply the goods or services required. Suppliers or service providers may also be required to provide references and submit a bid bond or tender security.

Once the deadline for submission of bids has passed, the organization issuing the tender will evaluate the proposals received. This may involve a technical evaluation of the bids, offers, or proposals to ensure that they meet the required specifications and a financial evaluation to ensure that the bids are reasonable and represent good value for money. The evaluation process may also include site visits and interviews with the bidders.

After the evaluation process is complete, the organization issuing the tender will award the contract to the successful bidder. Contractors or suppliers must follow appropriate legal channels if there are any disputes or challenges to the awarding of the contract.

It is worth noting that open tenders can also be time-consuming and costly for suppliers and service providers, who may need to invest significant resources in preparing their bids.

II. Closed Tenders:

Closed tenders are those that only selected or pre-qualified service providers are invited to bid or respond to. Private company tenders would generally be classified as closed tenders. Government tenders can only be closed tenders if it is in the public interest from both an economic and security point of view.

The purpose of a closed tender is to be a more targeted and selected procedure than an open tender because it is not available to all interested parties.

In a closed tender, the organization issuing the tender will typically publish a pre-qualification notice or advertisement, inviting interested suppliers or service providers to submit an application to be pre-qualified for the project or procurement opportunity. The application process typically requires suppliers or service providers to provide detailed information on their experience, qualifications, financial resources, and other relevant factors.

Once the pre-qualification process is complete, the organization issuing the tender will invite a select group of pre-qualified suppliers or service providers to submit a bid. This group may include a shortlist of suppliers or service providers who meet specific criteria, such as having the necessary experience, qualifications, and financial resources to undertake the project or supply the goods or services required.

The bid process in a closed tender is similar to that of an open tender, with suppliers or service providers required to submit detailed bids that meet the requirements of the tender documentation. The organization issuing the tender will evaluate the bids received and award the contract to the successful bidder.

Closed tenders are for complex projects or procurement opportunities requiring a more targeted and selective approach. In addition, closed tenders apply to situations where the organization issuing the tender requires a high level of expertise or experience from suppliers or service providers.

Closed tenders intend to provide a more focused and efficient procurement process, reducing the number of bids that need to be evaluated and increasing the likelihood of selecting the best supplier or service provider for the project or procurement opportunity. However, closed tenders can also be seen as less transparent and competitive than open tenders, as they limit the number of suppliers or service providers participating in the procurement process.

III. Unsolicited Bid:

An unsolicited bid is an offer made by a service provider to provide a good or service which the government or private sector is not actively seeking for. For an unsolicited bid to be considered, it needs to demonstrate genuine innovation and/ or the use of proprietary technology, must offer value for money and the service provider needs to be the sole supplier or has exclusive rights.

further to answering the question of what is a tender in South Africa, a distinction needs to be drawn between government tenders and private tenders. Government and Private or company tenders draw a lot of similarities in terms of how to complete and submit them but do differ slightly in terms of access or documentation or registration requirements.

This definition was extracted from the South Africa  tender document titled : The Tender Guidebook.  To further your knowedledge on the above topic as well as others within the tender ecosystem and in putting the final nail in answering the question of What is a tender in South Africa or any country in the globle, we highly recommend you purchase Guidebook

Want to learn how to tender? CLICK HERE

Who issues tenders in South Africa?

In improving our knowledge of What is a tender in South Africa, let’s get clarity on who issues tenders in South Africa.

Tenders in South Africa are issued by various organizations, both in the public and private sectors. Laws & regulations, such as the Municipal Finance Management Act (MFMA) & the Public Finance Management Act (PFMA) govern the issuing of tenders in South Africa.

Public sector organizations that issue tenders include government departments, agencies, municipalities, and other local authorities. These organizations are responsible for procuring goods and services on behalf of the public. Therefore, they must follow strict guidelines to ensure transparency and fairness in procurement.

Public sector tenders involve a wide range of goods and services, including construction projects, IT systems, office equipment, and professional services such as legal or consulting services. These tenders may be advertised in newspapers or online, and interested parties submit bids according to the specifications outlined in the tender documentation.

Private sector organizations also issue tenders for various goods and services, but the process may differ from that of the public sector. Private companies are not subject to the same regulatory framework as public organizations, and the issuing of tenders may be less formal. However, private companies are still required to follow ethical and legal guidelines to ensure that the procurement process is fair and transparent.

Whether public or private sector organizations issue tenders, the procurement process must be fair, transparent, and in line with all relevant laws and regulations. This ensures that one selects the best supplier or service provider for the project or procurement opportunity.

 

Difference between  government and private tenders in South Africa

Further to answering the question of what is a tender in South Africa, a distinction needs to be drawn between government tenders and private tenders. Government and Private or company tenders draw a lot of similarities in terms of how to complete and submit them but do differ slightly in terms of access or documentation or registration requirements. In South Africa, one key difference is that you don’t need to be registered in the Central Supplier Database if you are applying for private tenders but this is mandatory for government tenders.

This definition was extracted from the South Africa  tender document titled : The Tender Guidebook.  To further your knowedledge on the above topic as well as others within the tender ecosystem and in putting the final nail in answering the question of What is a tender in South Africa or any country in the globle, we highly recommend you purchase Guidebook

Want to learn how to tender? CLICK HERE

Have you checked out The Tender Guidebook For South Africa ? CLICK HERE. This Guidebook contains a masterclass guide on every topic and terminology in tenders with examples of completed tender documents. Learn how to tender and how to win tenders.

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