If you’ve ever looked into tender, bid and proposal opportunities, you might have been a little confused by all the different terms. Words such as bid, tender, proposal, offer, expression of interest, approach to market and request for information are all commonly used. But what do they all mean?
Here’s our quick guide:
Expressions of Interest (EOIs) are used by government, large and listed companies to test the market, often to identify options for delivery of a future service or project. EOIs ask a series of questions about your company’s skills, experience and an outline of how you would deliver the project or service. The main difference between an EOI and a formal request for tender or bid is that pricing is rarely asked for.
Requests for Information (ROI)
An ROI is similar to an expression of interest. Government, large and listed companies are seeking to understand what’s available in the market. Just like an EOI, an ROI asks questions about your company’s skills, experience and how you would deliver the project or service being sought.
Companies shortlisted following an EOI or ROI are later invited to respond to a formal Request for Tender or Request for Proposal.
Requests for Tender (RFT)
RFTS are issued by a company or government when it wants organisations to submit their credentials to deliver a project, service or product. Companies responding to a request for tender are ‘tenderers’.
A request for tender comprises a series of documents including a prescriptive scope of works, draft contract and response schedules. Tenderers must complete and submit the response schedules – this is their tender.
The response schedules will ask about the tenderer’s experience, people, how it will deliver the scope of works, plus pricing, insurances, policies and technology, among other things.
Bids or Offers
Bids or Offers are when a company is approached by another asking it to ‘bid’ or ‘make an offer’ to provide a service or product. Bids or Offers can be informal or formal. Formal ones comprise a Request for Offer (or Bid) document, which the responding company (the ‘Bidder’ or the ‘Offerer’) has to complete and return.
Equally, a Request for a Bid or a Request for Offer can be more relaxed, such as a letter attached to an email, asking the recipient to provide its bid or offer to provide its service or product. In these cases, there is no formal response template to be completed.
Proposals
Just like bids and offers, proposals can be one of two types:
- Requests for Proposals (RFP). These are exactly like tenders. Acompany or government issues a Request for Proposal for a project, service or product that it needs. Companies responding to a formal Request for Proposal are ‘respondents’. Just like RFTs, Requests for Proposals can be very prescriptive about how the service, product or project needs to be delivered. At other times, though, even a formal RFT will ask for a ‘proposal’ – that is, ideas about how the product, service or project can be delivered.
- Informal proposals are when a company invites a potential or existing supplier to provide a proposal to supply a new or additional product, service or project. There is no formal Request for Proposal and so the potential supplier can decide what to include in its proposal. This type of proposal needs to be a client-focused selling document. It must be tailored precisely to the prospective customer’s needs, best discussed at a prior meeting.
Whilst there’s a range of terminology used, most terms relating to tendering and bidding are used interchangeably. So, next time you hear someone talking about a bid, they most likely mean a tender or proposal opportunity.
