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What is a Tender Proposal?

By Carol Francois
Updated May 16, 2024
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The term tender proposal is used in the procurement field to describe the response from potential suppliers to a request for proposal (RFP). There are three aspects to every tender proposal: company overview, response to specifications, and pricing. Tender proposals are legally binding responses in a procurement process. There is a great deal of business law surrounding contracts, RFPs, tender proposals, and conditions of acceptance. Take the time to ensure that your response is accurate and presents a solution that can be completed profitable.

The format of a tender proposal varies widely by industry, but all have the same basic requirements. The most important part of any tender response is the deadlines. All RFPs have a due date and time clearly specified on the document. Any responses received after this date cannot be accepted or included in the review process. Contract law is very clear on this issue, and many firms have been taken to court over awarding contracts to firms who submitted their tender proposal after the deadline. The judges invariably decide in favor of the plaintiff who submitted the tender proposal on time, and may award damages in addition to legal costs.

The first section of every tender proposal is an overview of the company responding to the RFP. Typically, the firm should include background in the industry, highlighting successful projects of similar size or larger, to indicate an ability to meet the company’s requirements. If the company is listed on the stock market, this should be included in the background section, along with links to press releases, company website, and a list of executive officers.

The response section will receive the most attention from the client. As a result, it should be focused on meeting the requirements point for point. Many firms use the structure of the RFP to format their response, correlating each section to make comparison easier for the client. Additional supporting documentation that is required in the response should be listed as appendix documents and properly indexed. Many firms include the presentation of the response as a marked item in the evaluation matrix, making the effort well worth it for the responding firm.

Pricing is typically a separate section of the tender proposal. If there are multiple pricing options provided, the response should clearly indicate the primary value, along with the pricing for the different alternate solutions. Many purchase contracts include a recurring charge, such as licensing or annual maintenance. This value should be provided in this section, with a clear indication of length of term.

Any restriction surrounding acceptance of the tender proposal must be included in the response. This includes time lines to accept the offer, scheduling for beginning of the work, flexibility of resources, and other issues. Payment terms are typically indicated in the response as well, so that the negotiation process can begin.

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Discussion Comments
By anon340588 — On Jul 04, 2013

I worked from the assumption there was a standard response layout, until realizing that everyone in effect has a different format/index, which requires individual tailoring each time. If dealing with multiple tenders (sometimes) like I do (oil and gas), you may find it beneficial to have a word document detailing, for example, tools/people/product overviews which are easy to keep updated, and also select from to respond to tender, making the self-tailored response more streamlined in approach. --Jake, Scotland

By Potterspop — On Apr 22, 2011

Some people like to use tender proposal software, which is fine if you are inexperienced and have no idea how to tender. Generally though I think it's better to approach this like you would a job application.

Just like a resume, each should be tailored to the company in question. If you don't stand out then the person looking it over may flip straight to the bottom line. I know this because I was once responsible for choosing from those submitting construction tender proposals!

By Acracadabra — On Apr 20, 2011

My boss just asked me to help him write a tender proposal so this information is really useful. Thanks for making it so easy to understand.

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