Public procurement: the bidding process

There are a number of procurement methods from which procurers may choose from, variously called: invitation to tender (ITT), invitation to bid(ITB), request for tender (RFT), request for bids (RFB), request for proposals (RFP), request for quotation (RFQ), or request for information (RFI). Essentially, all these terms describe an invitation to prospective suppliers of goods or services to submit a bid. In other words, an invitation to tender is an invitation to make an offer. Clear tender requirements make it easier for companies to understand what is expected of them and may encourage additional bidders.

Once a company has decided to submit a bid in the tendering process, it may be required to complete a pre-qualification questionnaire (PQQ). The tender document will detail the information that is required.

An alternative to the traditional procurement process is so-called e-procurement. As the name implies, e-procurement is the ability to conduct a procurement using e-mail and internet-based technology making the process simpler and much more effective. Naturally, e-procurement embraces a number of familiar e-commerce aspects and includes the term e-tendering. E-tendering is the electronic advertising of tenders and entails the tender document being supplied and submitted electronically.

A common problem that all governments must contend with in the public procurement process is bid rigging. This occurs when bidders conspire such that one party will be awarded the contract. This can occur in various ways. Some of the conspirators can agree not to submit bids, or to submit bids that are intended to be unsuccessful. Parties may also agree to a bid rotation where the bidders take turns being the designated successful bidder. Bid rigging almost always results in economic harm to the agency which is seeking the bids, and to the public, who ultimately bear the costs as taxpayers or consumers.

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