E-Tendering — Everything You Should Know

E-tendering is used by many companies as it helps them to find the best suppliers for upcoming purchases at the right price. But, how is e-tender done by professionals?

In this article, we will talk about e-tendering and how it works. We will check the benefits you can gain and its disadvantages so you can decide if it suits your business. 

After you read this article, you will have an idea about e-tendering. Thus, it will allow you to assess if it will be good to use one in your business. Additionally, you will know why many organizations utilize e-tenders.

What is E-Tendering?

E-tendering or electronic tendering is the process of using e-procurement platforms to automate solicitation bid tenders and assess suppliers. 

E-tendering may be complicated but it simply refers to the process of managing tenders digitally. Before the internet and other technological advancements, all processes in procurement are done manually. 

It involves creating and sending requests for tenders to selected suppliers and the evaluation of the received information. Thus, leading to a short list of suppliers. 

E-tendering often happens during the selection process. However, it can affect the specification and contracting phase. 

E-tendering is an essential part of the e-procurement process as it facilitates the way of sourcing suppliers efficiently. 

The e-tender examples include the following:

  • Government contracting
  • Universities or other organizations
  • B2B business transactions with suppliers or vendors
Editor's note:

Hi there! My name is Marijn Overvest, I'm the founder of Procurement Tactics.
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How does it Work?

Of course, before you start the e-tenders, you first need to have an e-tendering system where you can start your tender. 

It works through an internet-based, online, or mobile software platform that may include a portal. This portal is where an organization may issue an invitation to tender (ITT) to potential suppliers who respond to the purchase request. 

E-tendering lets bidders submit the required information in response to the request for proposal by the deadline. It also lets the parties generate and exchange documents with e-signatures and messaging, and evaluates bidding suppliers for procurement opportunities. 

Finalized e-tenders are legally binding if the organization selects a supplier. Even though submitted tenders propose final terms, the e-procurement process can include the negotiating terms and bidding auctions before vendor selection. 

Employees who have the authorization of the organization can view the documents which are not separated from the other documents. 

The policy of the organization should specify that information viewed during the e-tendering process should not be disclosed to anyone until the contract is awarded. 

Why is it Important? 

E-tendering is an essential part of e-procurement that streamlines its processes. Due to this, many organizations cannot deny how it helps them so much. 

It is important because organizations can choose qualified vendors and competitive bids on their advantages. Additionally, it is a paperless transaction with well-organized steps to complete and includes an online centralized document repository for procurement. 

The Centralized electronic document repository that includes document requirements, digital tender documents, purchase orders, and contracts works well for contract and project management. 

Also, for significant contracts, the e-tendering process ensures that purchase requirements are well-documented and competitive bids are found through a public solicitation with wider participation by potential suppliers. 

Steps in E-Tendering

The e-tendering process has a few steps. The first step in this process is to prepare a detailed outline of what exactly the organization is looking for. The organization must clearly lay out its required goods and services to avoid misunderstandings and for them to meet your expectations.

Once the organization is sure of its requirements, it is time now to connect and relay them to the pool of suppliers. When it comes to the e-tendering process, it is done through an online portal. 

The third step in the e-tendering process is that the supplier will respond to the request for proposal that the organization posted. The suppliers will submit a bid if they think that they can meet the contractual guidelines and requirements. 

Once an agreement is reached, then the organization will award the contract to its selected supplier or vendor

Advantages and Disadvantages of E-Tendering

Advantages
It takes a break from traditional paperwork. It frees from a tendering process that requires publishing a tender notice in the newspaper. Thus, organizations can have higher cost savings.
It offers a quick and transparent collaboration with suppliers resulting in visibility of every activity in the procurement process.
With e-tender, everyone answers the same questions and usually within a set word limit. This makes it easier for the evaluator to reach an objective decision.
E-tendering is all digital which helps increase efficiency.
It empowers organizations to manage and access information through the portal.
Disadvantages
The limitation of the words makes it challenging for suppliers to express things or work around the defined criteria
There are no supporting documents attached which leave limited room for innovation
Of course, every online platform will sometimes go slow and unresponsive which is also the case for e-tenders.
It leaves more competition for suppliers.
The cost of new e-procurement system training for employees may be a bit pricey.

Frequently Asked Questions

1. What is E-tendering?

Electronic tender is the process of sending and receiving bids using procurement platforms online from a pool of suppliers. 

2. Why is it important?

It is important because organizations can choose qualified vendors and competitive bids on their advantages.

3. Do I need it?

E-tendering can help you choose qualified vendors to contract. It is essential to have, especially if you have an online procurement process to streamline it more. 

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