How to prepare and evaluate tenders
Tender evaluation
Once tenders have been submitted, they are then evaluated. This process involves checking the supplier bids against criteria and assessment set out in the request for tender, this will help the organisations to identify which potential supplier is offering the best value for money. It’s also important for the process to be followed in the same way, to ensure every tender is treated fairly. The evaluation process involves a team who have the necessary skills, for example a financial expert, technical expert, purchasing expert and even a legal expert.
The below gives you an indication of the areas of consideration when reviewing tender submissions:
Financial assessment
- All costs are covered in the price offered
- Currency conversions are correct at the time
- Alternative costings for alternative supply methods are identified
- Costs compare with, or are lower than, estimate costs
- Any extra costs are identified
- Discounts are offered where appropriate
- Retentions are identified
- Terms of payment are included
- Costs of spares are included in the offer
Technical assessment
This should be carried out by the technical members of your team.
- Any alternatives offered must be assessed individually
- Check with the tender that the production capacity claimed is available
- Physical inspection of the production site if necessary
- Check that any quotes for spares are compatible with the main bid
- Consider whole life costs, including de-commissioning, removal, or disposal
Capacity assessment
This assessment is closely linked to the technical assessment. It’s to check that all aspects of the tender's capability to perform is in line with the contract.
- Deeper inspection of financial viability to ensure they can purchase raw materials
- Check if the supplier is likely to seek financial assistance up front. If so, it will be necessary to negotiate very precisely the terms and conditions at the time of establishing any contract.
- The organisation is expected to put money up front for initial provision of materials
Tender evaluation best practices
There are several best practices that should be adhered to throughout the tender evaluation process. Take a look below at some of things to consider:
- Each tender must be treated in the same way. For example, if there is a submission deadline, then it’s important that tenders cannot be given extra time compared to others.
- All tenders must be opened and processed at the same time, so avoid opening a submission before the deadline.
- Make sure that all tenderers are happy with the process and that they have no issues or queries. Any clarification or questions sought during the process must be recorded.
- A clear and documented audit trail is provided from start to finish
- All decisions and reasons should be documented and signed
- Record of changes to specifications or terms and conditions which are major changes, must always be notified to tenders, with equal opportunity to amend their bids
- It is good practise to offer feedback to unsuccessful tenderers.
CIPS Contract Management Cycle
Our Contract Management Cycle is used to create a smooth end-to-end process, ensuring optimum scoping, planning, managing, and reviewing are taken place at the right time.
Find out more about the Contract Management Cycle
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Supplier evaluation guide
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