Inviting proposals for big governmental projects and sending bids for these tenders is one of the on-going practices in many developed countries, for example, in the case of Canada tenders. But with bidding, it is also the case that a tender proposal is not enough and ultimately at the end, your strong proposal must be supplemented with your strong negotiation skills.
A request for proposals (RFP) may be released for a variety of contracts, including the provision of equipment, the principal construction agreement (which may include contractor design), demolition, enabling work, etc. The term “tendering” often relates to building projects rather than hiring consultants, which is referred to as “appointing.”
Following the submission of bids, talks between two favoured bidders may continue before the winning offer is chosen. They provide an opportunity to settle or explain any issues relating to the planned works’ quality and price, as well as the contract’s terms and schedule. The client and consultant team’s opportunity to bargain with tenderers while they are still under the pressure of competition is now and for all time. Selected bidders will submit their tender in response to an invitation to submission, which will contain their pricing for providing the products or services as well as suggestions for how the client’s criteria will be achieved, if any such requests have been made.
BENEFITS OF TENDER NEGOTIATION
- Since the contractor is not aiming to win the offer based only on the lowest tender, their expenses and prices are more transparent.
- The choice of the client’s chosen contractor is flexible.
- Early supplier participation may be possible.
- The removal of the tendering procedure results in time and money savings.
- Negative aspects of contract negotiations:
- The lack of competitive bidding may increase expenses.
In an open competition, a contract is approved through a tendering procedure in which the lowest-priced (or best-value) bid is frequently chosen. The idea of bargaining often gives the customer more latitude to choose a contractor on criteria other than the lowest quote. Negotiated contracts are typically reached between a contractor and customer who have previously worked together and who have a solid working relationship.
A cost-plus contract or cost-reimbursable contract is frequently used for negotiated bids since the design papers are frequently incomplete at the negotiating stage. This enables the contractor to be reimbursed for expenses incurred during construction, such as labour, tools, and supplies, as well as profit and overhead costs for the project’s administration.
Therefore, the next time you place bids for tenders, if it aligns with your business, keep it open for negotiations. You may take help of public portals like BidAssist in search for tenders based on the keywords, categories and going through the tender documents for further details.