What is a tender? Australian tendering explained

The short definition

A tender is a written offer submitted in response to a buyer's formal request, promising to supply defined goods or services at a stated price under stated conditions. The buyer publishes the request, sets a closing time, lists the criteria that will be scored, and receives every response through a controlled portal so no bidder can see another bidder's answers.

Two things make a tender different from ordinary selling. First, the process is closed and even handed. You cannot phone the decision maker and talk them around after lodgement. Second, the decision is a score, not an opinion. A panel reads your document against a published rubric and writes numbers in a spreadsheet. Everything else follows from those two facts.

Tender, EOI, RFQ, RFP, RFT: what the labels mean

Australian buyers use a family of terms for the same broad idea, and the label tells you how much detail is expected and what is being tested.

• EOI, expression of interest. A shortlisting step. The buyer wants to know who is capable and interested before committing to a full process. Answers are usually short and focused on capability, capacity and relevant experience.
• RFQ, request for quote. Lower value, clearly defined work. Fewer criteria, faster turnaround, and price carries most of the weight. Councils use these heavily for maintenance and small works.
• RFP, request for proposal. The buyer knows the problem but not the solution. Method, approach and innovation carry serious weight, and the response is closer to a consulting proposal than a price schedule.
• RFT, request for tender. Fully specified scope, formal conditions of tendering, mandatory returnables, and a defined evaluation matrix. This is the classic tender most contractors mean when they use the word.
• Panel or prequalification arrangement. A standing list of approved suppliers. You tender once to get on, then compete in smaller work order processes for several years.

What is inside a tender document

Tender packs look intimidating because they combine three separate documents in one download. Separate them before you write a word.

• Conditions of tendering. The rules. Closing time, lodgement method, clarification process, what makes a response non-conforming, and the buyer's rights.
• Scope or specification. The work. What must be delivered, to what standard, where and when.
• Returnable schedules. The forms. Pricing tables, referee details, insurance certificates, licences, statements of compliance, key personnel, and safety and quality documentation.

The evaluation criteria and their weightings usually sit in the conditions of tendering. Read that section first, before the scope. It tells you where the marks are, and the marks decide where your effort goes.

How a tender is actually scored

An evaluation panel is typically three to five people: a procurement lead who owns the process, a technical officer who understands the work, and often a finance or contract specialist. Each scores independently, then the panel moderates to agreed marks and writes a recommendation for the delegate who approves the award.

A common weighting on a mid sized Australian public works tender looks something like this:

• Price, 30 to 40 percent
• Relevant experience and past performance, 20 to 25 percent
• Methodology and program, 15 to 25 percent
• Capacity, key personnel and resourcing, 10 to 15 percent
• Work health and safety, quality and environmental systems, 5 to 15 percent
• Local content, social procurement or Indigenous participation, 5 to 15 percent

Read that list again. On a typical tender, well over half the available marks are not price. This is the single most useful thing a new bidder can learn, because it means the cheapest number does not win, and discounting to buy work usually costs margin without buying score.

Why most first tenders lose

Having lodged more than a thousand submissions, the losing patterns are boringly consistent, and none of them are about the quality of the business.

• Non-conformance. A missing returnable, an unsigned form, an expired insurance certificate, or a late lodgement. Panels are often obliged to set these aside before scoring begins.
• Answering the wrong question. Writing about the company rather than the criterion. If the criterion asks how you will manage traffic on a live site, the panel cannot award marks for your history.
• Claims without evidence. "Extensive experience" scores nothing. Three named comparable projects with values, dates, client contacts and outcomes scores well.
• Generic method statements. A boilerplate methodology with the client's name swapped in is obvious from the first paragraph and marks in the bottom band.
• Ignoring the word limits and structure. Answer in the order the criteria are listed, use the buyer's headings, and stay inside the limits so the panel can find each answer quickly.

Where Australian tenders are published

Federal opportunities are advertised on AusTender. States run their own portals, including Buying for Victoria, NSW eTendering, QTenders, Tenders WA, SA Tenders and TendersACT. Local government either uses a state portal or a platform such as VendorPanel. Primes and tier one contractors run their own supplier portals for subcontract packages. Register on the portals that match your work, set category alerts, and check them weekly rather than waiting for someone to invite you.

Your first tender, step by step

• Register on the relevant portal and download the full pack, including addenda.
• Read the conditions of tendering and build a returnables checklist with owners and due dates.
• Make a genuine go or no go decision. A tender you cannot resource or deliver is a cost, not an opportunity.
• Ask clarification questions early, in writing, through the portal. Late questions often go unanswered.
• Draft each criterion answer against its marking guide, with evidence attached to every claim.
• Price the scope, not the hope, and check the pricing schedule format matches exactly.
• Do a compliance review a full day before close, then lodge early. Portals fail at 2pm on closing day.
• Request a debrief whether you win or lose. It is the cheapest tender training available.

When it is worth getting help

Tendering is a skill, and like any skill the first attempts cost more than they return. If the contract is significant, the deadline is tight, or the pack runs to hundreds of pages of returnables, an experienced bid team pays for itself by turning your capability into something a panel can score. If you want to learn the craft yourself, start with how council tenders are scored and how to write a capability statement.