7 tips on the tender process steps & how do tenders work in India (2024)

Tenders are an opportunity to get work contracts from the government and other private organisations to build your business. There are some key tender process steps that as a bidder you must follow if you want to increase your chances at winning. The tendering process in India total is usually carried out online, is quick and follows specific steps to keep the process fair and transparent.

But first, what are tenders? A tender is an invitation for businesses to bid for a project for a government department, PSU, or private company. You can register on the Central Public Procurement Portal and/or register on the GeM portal, to find the latest government tenders for your business. But if you want to apply for tenders, it is recommended to understand and follow the tender rules and regulations in India.

Let us look at how do tenders work with an example.

Tender process steps with example

If a particular government department (e.g., the Indian Railways publishing railway tenders) needs a specific product (e.g., 700 brake vans), listed below are some of the stages of tendering process and how the tender process will work:

• The requirement will be posted on the relevant government portal (e.g., IREPS or Indian Railways tenders portal) in a specific tender notice format online and/or offline (e.g., via newspapers)
• The entire details of the tender will be included, with specific details on timelines, payments, qualifications, tender eligibility, list of documents required etc. to invite all eligible businesses to bid for the project
• Any corrigendum made will also be published
• Once the tender application date closes, a fair and transparent tender evaluation process of all bid proposals on technical, financial, and other grounds will commence
• The status of results will be announced and the contract will be awarded to the most suitable bidder (usually the one that offers the most value for money and meets all the specified requirements)

If you are an MSME looking to apply for tenders, know that, while this is a huge opportunity to build revenue, there are many challenges in the tendering process. Learning about the tendering process, finding the relevant tenders, going through the invitation, etc., are just a few tender process steps that must be studied carefully before applying for tenders.

Now that you understand what is tender in business, and how the tender process works, let’s take a more detailed look at the individual steps.

How tender process works in India?

How do tenders work? In the previous section, we explained the tendering process through a small example. However, tendering involves two distinct parties – the buyer and seller. While the tender notice is published by the buyer, the tendering process commences when sellers apply for tenders, and the buyer can evaluate the proposals and tender price quotes to identify the best fit for the project.

Applications for government tenders have now become primarily completely online. Since tenders are invited by both government and private sector entities there are different methods of application.

Tender process flow – Buyer side

• Government tenders are usually published on the CPPP or GeM (Government e-Marketplace) platform and you stand a chance to win eTenders on GeM portal if you apply correctly. These are the most widely used channel for public procurement in India. You will have to register on the GeM portal and login to apply for tenders. Note: There are other government authorities that publish their tender requirements on separate portals. For instance, Karnataka eProcurement portal, Local Self Government portal Kerala, eProc Andhra Pradesh, Pune Municipal Corporation tender portal, etc.
• Once the tenders are announced, there is a time allotted for bidders to bid. During this time (i.e., before the closing date), bidders can send queries for clarification to the contact details provided in the tender. Also, if there are any updates/changes made, the tender is republished as ‘Corrigendum’.
• Once the tender bids are submitted, the evaluation process begins. In general, there are two categories of evaluation – technical and financial. Technical evaluation checks for bidder eligibility, that they meet the required qualification for the project. This may refer to having the right certifications, technical qualifications, plan, plant capacity for production, demonstrated work experience in a related project (usually requested for construction tenders, civil works tenders, railway tenders) etc. Usually, one needs to clear the technical evaluation to be considered for the financial evaluation.
• The BOQs and financial bids are opened usually after the technical round. Here the assessment is on whether or not the bidder has the required financial capabilities to meet the project requirements.
• The tender is awarded based on overall capabilities. Usually, once the results of tender are announced, the winner gets some time to accept/reject the project.

Tender process work flow – Bidder or Seller side

• The tender business for the bidder, begins when they have identified the right tender opportunity. Note – If you are a general bidder, you will have to go for open tenders (not limited or negotiated tenders).
• On the CPPP and related portals, a bidder can view tender details and download documents without registering. However, they will have to login to apply for relevant e-tenders.
• Once a tender announced, ideally the bidder should view the basic tender information and download the PDF document to check eligibility. Note, eligibility criteria for government tender contracts differs. For instance, if the contract requires the bidder to have completed 3 similar projects in the last 5 years, or have a minimum turnover in the last 3 years, it’s necessary to meet those criteria or be instantly disqualified. Ensure that the basic tender rules and regulations in India are followed to increase your chances of winning the contract.
• Next, the bidder can start preparing the tender proposal document. This is a long drawn process as every detail must be meticulously outlined. In some cases, businesses avail tender bid consulting services to get support for writing compliant tender proposals. It is also recommended that the common list of tender documents, such as financial statements, work experience and reference documents, certificates and drawings, etc. are collated and saved in a particular folder to save time and get access quickly.
• Once the proposal is written, the documents must be uploaded digitally as a single file, in the requested format. This is also when the requested tender fees and EMD fees are to be paid and the receipts are usually submitted online. Note: In most cases, micro and small businesses are exempted from paying EMD, though the required MSME certificate has to be submitted. Also, not all tender proposals require fees and EMD. Do check these details before submitting.
• The final step involves clicking the ‘Freeze Bid’ option to submit your proposal after proofreading and reviewing the application.

7 things to know about how the tender process works in India

1. Know about the e-Tendering process

e-Tendering process is when the entire tendering process is done online. e-Tendering was designed to eliminate errors committed in the traditional methods of bidding. e-Procurement software has further simplified the tendering process.

Note: If you aim to apply to multiple tenders, consider getting software for eTender management to streamline and automate the process and keep all documents in one place.

2. Difference between RFI, RFQ, RFT and RFP

Request for Information (RFI), Request for Tender (RFT), Request for Proposal (RFP) and Request for Quote (RFQ) are must-know terms before applying for online tenders.

3. Difference between public and private sector tenders

Public sector tenders are tender invitations from government departments and public sector units (PSUs). Public sector bids have strict guidelines, laws and regulations where bids are evaluated according to weighted selection criteria. This is because these tenders and their details are public knowledge. Pricing, safety, local supplier participation and sustainable purchasing policies are some of the determinant factors for winning public sector tenders. (Also learn about the general principles of online tendering)

Private sector tenders on the other hand are confidential data of companies and don’t need to be divulged to the public. Therefore, private sector entities are more liberal in their bidding evaluations. They often look for more innovative solutions that can give them a high rate of return at affordable prices.

4. Analysing tender request

In the tender business, reading the RFT carefully is the most important of all tender process steps. Make a checklist of all the requirements quoted in the tender and prepare a tender response checklist to ensure you haven’t missed any documents or details. Here is an ideal questionnaire you can use to create a checklist:

5. Preparing tender proposal

Preparing the tender document is another one of the important stages of the tendering process. A well-planned proposal can make you the winning bidder. The company that issued the tender request is looking for a competitive offer for the supply of their products/services.

6. Get regular updates on relevant tenders for more opportunities

If you are interested in setting an industry track record, you should participate in more tenders and complete them successfully within the given timeline. A successful track record is also a determinant when it comes to companies/government departments choosing you for their project.

Signing up for GeM is the easiest way to keep track of the latest government tenders. For private tenders, it will be better to sign up for the services of an e-Tendering portal. These portals bring all the relevant tenders for you in one place giving you easy access.

For instance, you can explore the latest and most relevant government e-tenders with Tenders on Tata nexarc. A subscription will allow you to view relevant tender details, download documents, get email alerts and more. You can even get expert assistance on writing tender proposals and increase your chances of winning.

7. Thoroughly read the terms and conditions of a tender

An RFT will have terms and conditions to be an eligible participant in a tender. For example, to participate in a government e-tendering process in India you will need to sign up to GeM portal and possess a digital signature certificate.

Terms and conditions will mention important information like the scope of work, commencement and completion details, required tender documents, taxes and charges of the project, etc. Ensure that you read and follow the tender rules and regulations in India.

Tips on preparing winning tender bids

So, now that you know how do tenders work and the key tender process steps, the crucial step to remember is that you need to analyse the tender requirement and prepare a befitting response that convinces the buyer to award the tender contract. Here are a few tips to win tenders:

• Scan the tender requirements carefully
• Check the evaluation criteria to better understand the requirements
• Prepare a well-structured and concise tender response for easy reading
• Research the tender requirements and see if you can come up with an innovative solution in line with current market trends.
• Analyse the competing bidders and try to prepare a better bid than them.

If you are an MSME looking to participate in the tender process, it would be wise to start on small projects first. Small projects will give you an idea of how tender process works in India. This will help you build your expertise for the subsequent projects. Starting with small projects and later taking on the big ones once you are ready will contribute tremendously to your industry track record.