It’s not specifically same as tender, that is a response to a request to tender, submitted by the prospective supplier. The quotation is an offer with a set price that cannot be altered once the client accepts it. On the other hand, a tender is a reply to an invitation to a tender that is used to determine the highest value for money among prospective providers. The tender document is issued to prospective suppliers to gather information and pick a supplier based on pricing, delivery terms, and availability. Within the given timeframe, interested sellers may reply to the request for proposals by sending their best offers in sealed covers under proper authorization.
However, the acceptance of a quotation is often subject to certain conditions or negotiations, allowing both parties to finalize the terms before entering into a contract. Factors like project size, complexity, timeline, and legal requirements should guide the decision. Larger, more complex projects generally require tenders, while smaller, simpler transactions may use quotations.
Mastering the art of tendering with Bidhive: Your comprehensive bid management solution
Many organisations also use a e-Tender management system to manage tender applications. Though these are more effective for publishing tenders, many use it to keep all their tender and quotation details in one place. When government departments or large private companies invite suppliers to bid, they issue an Invitation to Tender (ITT) or a Request for Tender (RFT). Quotations typically involve limited competition, as the buyer directly approaches a few selected suppliers.
How do I choose the right procurement method for my needs?
Bids are typically competitive and suppliers compete on price and other factors to win the contract. On the other hand, a tender is a formal invitation from a buyer to suppliers to submit their proposals for a project or contract. Tenders are usually more structured and detailed than bids, and suppliers are evaluated based on a set of criteria outlined in the tender document.
- It contains the terms of sale, payment, and warranty, including the price agreed to charge for the goods or service, the day, time, and location of delivery, and the validity period of the quotation.
- These tools also streamline comparisons, ensure better record-keeping, and improve transparency, saving time and effort for both parties.
- The final selection is made based on a combination of price, quality, technical capabilities, and other relevant factors.
- It is not an estimate but the actual cost of the project that the bidder/supplier is quoting for the tender.
- It is essential for both buyers and suppliers to understand and follow the legal framework that governs the bid and tender process to avoid any potential issues or disputes.
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Their role may be one of a manager, or they may be hands-on and perform the proposal writing function as well. With a dedicated tender platform, companies can improve their tender bidding accuracy and response times. Since the quotation is included in the tender and includes the pricing of the item to be delivered, the scope of the tender is broader than that of the tender. It contains the terms of sale, payment, and warranty, including the price agreed to charge for the goods or service, the day, time, and location of delivery, and the validity period of the quotation. Benefits include speed, simplicity, and ease of comparison between different suppliers.
Expanded Explanation of Differences:
Key Differences Between Quotation and Tender The quotation is a fixed price offer,that once accepted by the client, can’t be modified or changed. On the opposite extreme, the tender is a response to the invite to tender,that is employed to find out the simplest price for cash, from the prospective suppliers. A quotation is a response to Request for Quotation (RFQ), whereas tender is used in response to Request for Tender (RFT).
RFIs do not result in binding commitments and are usually followed by an RFP, RFQ or RFT. In this post, we’ll delve deeper into each bid type, explaining its definition, purpose, scope, application, and benefits to help you navigate the procurement process effectively. Technology and a proactive approach to relationship management are critical to optimising procurement and tendering in the fast-paced business environment of 2025. Tendering is most often used for high-value or complex projects where competition ensures quality and cost efficiency. It promotes transparency and fair competition, essential for high-stakes projects.
Request for Expression of Interest (RFEI)
Some of the documents that are frequently asked during this process are Company Profile, Company PAN card, Udyam Registration Certificate, CA audited turnover, etc. Sometimes, bidders may also require businesses to pay tender fees and/or Earnest Money Deposit (EMD) while submitting the response. Now that we understand the meaning of tenders, let us take a look at the meaning of quotations. In the past, tender notifications were usually published on various leading national and regional-language newspapers, and leading public portals. However, with time the process of government tendering has shifted online and today the government publishes its tenders on its e-procurement system – the Central Public Procurement Portal (CPPP). There are portals for state specific tenders as well, such as (e.g. Mahatenders eProcurement, eProcurement for Karnataka etc.).
In this blog, we’ve explored the fundamental differences and similarities between tenders and quotations, two essential methods in procurement. We discussed how tenders are typically used for large-scale, complex projects and involve a detailed, formal process, while quotations are more suitable for smaller purchases and simpler transactions. In 2025, the nuances between tenders and procurement are more significant than ever for businesses aiming to streamline operations and achieve sustainable growth. While tenders focus on competitive bidding to secure specific contracts, procurement encompasses the broader scope of acquiring goods and services necessary for business operations. Understanding the unique roles and strategies behind these processes can be a game-changer for companies navigating modern markets.
- With a 96% success rate across the bids we supported last year, our results speak to the quality and consistency of our collaborative approach.
- Quotations are simpler and more suitable for smaller purchases, while tenders are more complex and used for larger contracts.
- Bids are typically open to any qualified supplier who meets the buyer’s requirements and can submit a proposal.
- It often involves a formal invitation to tender, followed by the submission of sealed bids that are opened and evaluated by the buyer.
- Understanding the difference between tenders and quotations is essential for any business looking to streamline its procurement process and build transparent, effective partnerships.
Understanding these attributes can help buyers and suppliers navigate the bid and tender process more effectively and achieve successful outcomes. Tendering is an approach to a formal, competitive procurement opportunity to gain significant new or repeat business. This is undertaken ‘at arms’ length’ to provide a level playing field for all bidders.
The only major element of the quotation is the price which explains the cost of the contract, submitted by the supplier…. • Tender is the formal process of asking suppliers to bid on the products and services required by a company. • Quotation is the response of the bidders where they quote their price for the goods and services. • Quotation also refers to the estimate that people ask from professionals for jobs that they require done.
The distinction between tenders and quotations extends beyond the surface level of formality. Tenders often involve pre-qualification processes to ensure bidders meet specific criteria, while quotations typically do not. The evaluation of tenders considers factors beyond price, such as technical expertise, experience, and proposed methodology.
Quotations, however, may be fixed or estimated, making them more flexible but also less predictable if project conditions change. Yes, if a project becomes more complex or its scope expands, a business may shift from a quotation process to a tender to ensure a more detailed evaluation and competitive bidding. A quotation is more suitable when difference between tender and quotation you need a quick price estimate for smaller, one-time purchases or services that don’t require a formal bidding process. The tender document is sent to prospective suppliers, to solicit information, to select the supplier on the basis of price, delivery terms and availability.
Chhattisgarh unveils tenders for 4 new medical colleges & healthcare projects. Current SCM provides a unified platform for procurement and materials management, offering comprehensive support for the planning, purchasing, and management of materials & services. With material and document tracking integrated into the Order and an Expediting dashboard within each Order, Current SCM provides a unique platform for Buyers and Expeditors. The RFI is a preliminary information-gathering tool used by organizations to gather details about goods, services, and/or potential vendors. RFIs are typically used when organizations need more information or insights to inform their procurement strategy. They help organizations assess the market, identify potential vendors, and understand the capabilities and offerings of vendors.
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