The terms fly around your ears in Bid Management Country. In this article, we explain to you the difference between:
What is a bid?
A bid is a company or organization’s request to supply parties to write a proposal. This request is always in writing; the process and what is needed is in 1 or more documents.
A Bid is a collective term, also known as a Tender. In Dutch often called an “aanbesteding”. There are many forms, such as a tender (from the government) and a Request for X from the business community.
What’s a tender?
Tender is the English word for the Dutch word “aanbesteding”. In the Netherlands, a tender is a government procurement procedure regulated by law. The goal is to encourage as many suppliers as possible to prevent the government from merely purchasing from a few friendly companies. In doing so, they naturally want the best price and quality. The ratio of these varies from tender to tender. There are several ways to do this. Would you like to learn more about this?
What is a tender?
The government has different types of procurement. First is the difference between open and non-public (private) tender. The name itself says it all. In the first case, any provider may bid. In the second case, a selection is made for a minimum of 5 providers who are allowed to bid. The tender will be published at that time.
The government does not consistently issue a “real” tender (public tender) right away. It also regularly publishes a market consultation. This is a precursor to the actual procurement. Thus, the project group gathers information from the market. They still have questions about what is available and approximately what it costs.
Request for X
Where the government uses tenders to procure, commercial companies call it a “Request for.” Here you see three main forms:
- Request for Information
- Request for Quotation
- Request for Proposal
Request for Information
A name Request for Information does not leave much to the imagination. A company wants to buy something but does not yet have enough information to make a detailed request for a proposal. They often do not want to receive comprehensive information at this stage because it takes a lot of time to review it. So they are asking a large group of suppliers to provide them with information. Therefore, this is certainly not yet a request for a quote, even if one does ask for a cost indication.
Think of this as a request for a customized brochure.
Request for Quotation
The purpose of a Request for Quotation is also obvious. One wants a quotation. Therefore, the size of the document to be submitted is relatively tiny. A few pages of price information and terms and conditions. Often accompanied by a letter for the offer, and that’s about it.
This form, by the way, is by no means found in all markets. You see RfQs in markets where the products and services are homogeneous. One is looking for the best terms because the product and quality measurement are already apparent by then. If you get an RFQ for a service or product that is very complex, then you should scratch behind your ears. It seems then that your customer does not know what he is purchasing very well. Participating in such a solicitation poses risks. We don’t need to explain that to you. Still, it can be an excellent way to start looking at your services differently and score an ideal client.
Request for Proposal
A Request for Proposal is the most common form. The client then prepared a comprehensive document in which all facets of his request were explained and concretized as much as possible. Answering is usually a big chunk of work. Why that is, you can read here:
In-depth text: Why does Bid Management take so much time?
You can adequately compare an RFP to a tender. They come in both public and non-public forms. Some companies publish their RFPs on their websites to get as many providers to participate as possible. Nevertheless, it is more common that there is already a short list of companies that are sent the RfP. If all goes well, you are already aware of that.
Read more about that in the pre-bid phase in this article: The process of a bid response
This is a small list of all types of bids and RfX. It is all kinds of forms where a customer asks the market to come up with an offer. The great advantage is that the customer believes that a market participant can help him further. However, often the customer has already done the research and is constantly thinking in a certain way when it comes to the solution.
However, answering bids correctly is a specialty. You come face-to-face with your competitors. So the key is to rise above the rest and thus become the “winner.”
Want to know more about bids and how to win them? Below each links to articles: