What is Tender? Classification of Tenders.

by Tutorial Tips Civil · 04/11/2020

What is a Tender?

A tender is an offer in writing for executing certain specified work or supplying specified materials subject to certain terms and conditions like rates, time limit, specification, etc.

Depending upon the type of contract, the tender may be lump-sum tender, item-rate tender, cost – plus tender, labor tender, demolition tender, etc. The tenders may be invited either by private owners or by a public notice or by negotiations. The tender may either be open tender or selective tender. The open tender is for all reputed contractors, firms, PSU’s and thus the tenders for the project are received on a competitive basis. In the case of selective tender, the architect after consultation with his client invites a limited number of contractors for filling up the tender of the project.

Classification of Tenders:

The tenders can be grouped into the following three categories :

Open or Public Tender
Selected or Limited Tender
Negotiated Tender

Open or Public Tender :

In this type of tender, any contractor can enter into competition and all formalities of giving an opportunity to compete are to be fulfilled. It is compulsory for public works and because of competition, it may result in low cost. But there are chances of a dispute as mistakes found out at a later stage are difficult to be adjusted.

Selected or Limited Tender:

For this type of tender, the architect after consultation with his client invites a limited number of contractors for filling up the tender of the project. It results in competition on a small scale. But it proves to be useful for specialized and skilled works. It also leads to early successful completion of the project.

Negotiated Tender:

This is advanced from selective tender and the contract is given by negotiations with one or at the most two contractors. As such, there is no competition in this type of tender and hence it may be costly. But when the work is to be completed in target time without sacrificing the quality, the negotiated tender may prove to be the only alternative.