Legal aspect of the tender

Authored by - JIA

The legal aspect of the tender

Introduction

Tendering is a process in which goods and services are procured through a structured process of inviting bids from suppliers. This complex process must undergo some legal requirements, which require understanding several legal aspects. Non-compliance with these legal aspects can lead to legal disputes and damage the person's reputation.

These legal aspects are important for both buyers and suppliers. Buyers must adhere to procurement regulations, while suppliers must fulfil requirements for specified tender documents.

What is Tender or tendering?

A tender is basically a written offer from suppliers or contractors to undertake specific work or provide materials within a set timeframe. This tender document is also called a request for tender or RFT, which outlines the quantity or services required, the specific work requirements, the completion timeline, the contract conditions and other relevant plans or drawings. These RFTs are generally advertised in newspapers for various types of work, such as construction, engineering, or specialised work. Those who are interested in the tender can submit their bids in response, and the most favourable bid will be selected and awarded the tender.

The organization or individual who invites to submit the proposal is the buyer, and the one who responds to the request is called the supplier.

A request for tender or tender document alone can not be used as a letter of acceptance because it does not legally commit the contractor to complete the work. Instead, both sign a formal contract based on the terms outlined in RFT, which legally binds the contractor to fulfil the work. This particular contract contains the conditions and requirements stated in the RFT.

The most common types of tenders

The following are the most common types of tenders:

• Open Tendering-?This involves publicly advertising the invitation to tender, such as through a newspaper, with all the conditions clearly outlined. Those interested suppliers are invited to submit their bids, and the contract is awarded based on the criteria specified by the organisation.
• Selective Tendering In this, only a select number of suppliers are invited, who are selected from the suppliers or businesses they have previously worked with.
• Multi-stage Tendering—In this, an organisation conducts several stages to select a supplier for a specific project according to the contract's requirements. This method is usually used when there are many respondents so that organisations can narrow down the options progressively.
• Invited Tendering—In this type of tendering, the organisation directly invites specific suppliers to submit a bid. It is usually done in?emergencies or where a project requires specialised expertise.

Steps involved in the tendering process.

The tender process is often outsourced rather than directly done by the project owner. The tendering process typically involves the following steps:

• Pre-qualification- This initial phase involves identifying the business need, evaluating the market capability, defining the scope of work, and developing a framework for evaluating tenders.
• Registration of interest—Before the formal tender is issued, the main contractors are invited to submit an expression of interest. This step is a preliminary measure before sending out a formal tender.
• Invitation of Tender—A formal invitation is sent to contractors, allowing them to demonstrate their ability to meet project requirements such as timelines, budget, and scope.
• Pre-tender meetings—After the invitation to tender is issued, a pre-tender meeting is held, which includes a briefing session, a site visit, and an opportunity for potential bidders to ask questions, clarify the details, etc.
• Review of tenders—Evaluating tenders allows the project owner to assess how well the bidders meet the project's requirements, their financial stability, and their proposed prices. This helps in selecting the preferred bidder and in negotiating further.
• Awarding the contract- After reviewing and negotiating the tenders, the contract is awarded to the selected company.

E-tendering

E-tendering, or electronic tendering , is the digitalization of the tendering process, which is managed through specialised software. This process aims to speed up and streamline it, ensuring fairness and efficiency for both buyers and suppliers, as the manual process can be lengthy and costly.

Steps Involved in Filing an E-Tender:

• Advertisement of the tender- The government authorities advertise the tender on e-tendering platforms where all the relevant details, such as eligibility criteria and other necessary conditions, are mentioned. One must check the eligibility criteria and prepare all the necessary documents required in the tendering.
• Digital Signature Certificate (DSC): To participate in the tendering, the bidders must obtain a Class-III Digital Signature Certificate (DSC) from a licenced certifying agency. This certificate is essential for submitting the bids electronically.
• Registration: The bidders must register on the e-tendering platform of the issuing governmental agency or organisation. This involves creating user IDs and passwords to access and submit the tender documents online.
• Document Upload and Bid Registration: A number of documents have to be submitted, which are specified in the Request for Tender (RFT), to register your bid online. You must ensure all necessary documents are correctly uploaded to complete your submission.
• Payment: Most e-tendering platforms have payment getaways for processing fees. Complete the online payment as required and ensure your bid submission is finalized before the deadline.
• Bid Results: The results are published online on the organization’s portal once the bidding process is closed. Check the portal to view your bid's outcome.