Tender
A tender is the default method for awarding public construction contracts. Public procurement rules require that, as a general principle, public funds be spent through open competitive tendering, so the government secures the best conditions of price, quality, financing and timing. Procurement law governs the procedure: the contracting authority publishes the call for tenders and the bidding documents on the official procurement portal, releases the design and the bill of quantities, holds a clarification meeting, receives the proposals and evaluates them before issuing the award.
The process splits each proposal into two parts: the technical proposal (compliance with the design, construction schedule, personnel, equipment and experience) and the financial proposal (the unit prices and the total amount). Only proposals that pass the technical evaluation move on to the financial one. The award can be resolved through two evaluation mechanisms: the lowest-price (or "binary") method, where the cheapest responsive bid wins, or the points-and-weighting method, which scores both technical quality and price. The result is announced in a formal award decision and leads to the signing of the contract.
Procurement law typically provides for three types of procedure according to the degree of competition: open public tender (the general rule), restricted invitation to a limited number of bidders, and direct award. The latter two are narrowly defined exceptions, based on contract value, urgency or other statutory grounds, that must be justified and documented. An open public tender, in turn, can be domestic or international depending on who is allowed to participate.
In industry jargon, "tender" and "bid competition" are often used interchangeably, although strictly speaking the competition is the comparative stage of evaluating proposals within the tender. For the contractor, tendering well requires a solid budget backed by unit price analysis, meeting every requirement in the bidding documents (legal paperwork, bonds, technical and financial capacity) and making sure the proposal is responsive: a formal error or omission can disqualify it even if the price is competitive.
Example
A public agency puts a bridge out to tender with a base budget of 50 million. Six firms register; four submit a proposal. Three pass the technical evaluation and their amounts are 52.1M, 49.8M and 48.5M. Under lowest-price evaluation, the contract is awarded to the 48.5M bid as the lowest responsive proposal; the others are declared non-winning and the technically non-responsive one is disqualified.
Frequently asked questions
What is the difference between a tender and a direct award?
A tender is an open, competitive procedure in which several contractors submit proposals and the best one wins, whereas a direct award contracts a single supplier without competition. A direct award is a narrow exception, limited by contract value or a justified statutory ground, while open public tendering is the general rule required for public spending.
What are the stages of a public works tender?
Publication of the call for tenders and the bidding documents on the official procurement portal, a clarification meeting, submission and opening of proposals (technical and financial), evaluation of the proposals, the award decision and the signing of the contract. Afterwards come the delivery of bonds and the advance payment, if any, and the start of the work.
What documents does a contractor need to take part in a tender?
The technical proposal (design, construction schedule, personnel, equipment and experience) and the financial one (unit price analysis and budget), plus the legal and financial paperwork: articles of incorporation, powers of attorney, tax and social security filings, proof of financial capacity and the guarantees or bonds required by the bidding documents. Any missing requirement can disqualify the proposal.