Tips for Writing a Tender Proposal
A tender is a formal written proposal for completing a specific job as is requested by another company that is receiving the proposal. Basically, a company that needs services or goods supplied to them sends out a request for tender (or RFT) and interested companies place their bid, or tender, in order to get the job.
Writing a tender can be a lengthy and tedious process. All the relevant issues must be covered in order as they appear on the RFT. The tender must be written in a clear and organized fashion that also reflects a company’s professionalism.
But why go through the trouble of writing a tender? Why not just have a simple understanding of the job specifics?
The answer is because that is a good way to lead to a misunderstanding. A tender is like a contract in that it lays out in writing exactly what a company or business will do to complete the job. Also, when it comes to financial matters, the company that issued the RFT will want to compare prices from all the different bids. However you write a tender proposal, it must contain three main documents; the quotation, terms and conditions, and a letter of agreement.
The first document is a written quotation on the job specifics. It outlines the job background and requirements, sets limits of services, and shows the price for the services offered. Most clients are going to want an exact amount of how much the offered services are going to cost. Sometimes this just isn’t possible so an estimate must be given. As long as the client understands that it is only an estimate and the price may fluctuate a bit, then everything is good.
Before you write out a quotation, do a little research into the job so you can make your bid as accurate as possible. If needed, ask some questions of the client. For instance, make sure of the specific products or services needed. Check to be sure who will be handling these products or services on the client’s end. Once you get all of the information, you can add it to your quotation.
Although tender quotations can vary depending on the job, most will include the following:
- Basis of the Tender – These are the general rules about what will be documented. This is to set up clearly exactly what is expected and what you will be working with. If it turns out that conditions change and it is more work involved than was documented, then that will be basis for asking for additional payment.
- Background to the Work – This section gives a highly detailed overview of the product or service and what it is used for. This helps the client easily understand exactly what you are offering so that there are no misunderstandings later.
- Product or Services – You should give a very specific and itemized list of the products or services that are being offered for the bid. Include the price for each service with all costs totaled at the end. As mentioned earlier, if you can’t be specific, try to give a close estimate to the actual cost. Sometimes you might need to give the client a set of options. For example, if the client orders more than X amount of a product, they might receive a discount. By giving the client a few options on pricing, it makes your tender seem more flexible and competitive.
- Provisions of Materials – This basically outlines who supplies what. Sometimes the client offers to supply certain materials or services so it needs to be clearly stated in the document.
- Time Allowed for Delivery of Product or Services – This is the time period on how long it will take you to complete the job. This can be very hard to calculate for large jobs so most bidders will give a close estimate.
- Errors and Responsibilities – People occasionally make mistakes on if you are submitting a tender on a large project, chances are that there will be an oversight somewhere. By stating who is responsible for what errors, it will dispel any future disputes. A final checklist should be completed by the client to ensure satisfaction in the delivery of products or services.
- Validity Period of Tender – This gives a time period that the quotation is good for. Prices for materials can change over a short amount of time and if a client waits beyond the validity period, then a new quotation may have to be given.
Terms and Conditions
The second piece of documentation that every tender needs is terms and conditions. Most tender writers include a standard terms and conditions that apply to all jobs. Most terms and conditions will state the rules of the job and the standards expected from you, the bidder. Terms and conditions can cover approval of delivery of products or services, access to client information, and what constitutes additional charges.
A big advantage to including a terms and conditions document into a tender is that the information is not confidential, it can be handed out freely to other job requests, and it outlines the general framework for how you and your company operate to complete a job.
Letter of Agreement
The third piece of documentation for a tender proposal is a letter of agreement. The letter can be very general or very specific, depending on the job. A letter of agreement will state when the job will start, give a target date for the completion of each product or service, and payment terms. Most tenders state that payment must be made within 30 days upon completion of a part of or whole of a job.
Other Issues to Writing a Tender Proposal
Besides the three main pieces of documentation, a tender proposal should contain a few important things about you and your company.
- Executive Summary – This summary explains why the client should pick you over the competition. It is your chance to sell yourself and convice the client that your company is the best for the job.
- Company Profile and Background – You should always explain a bit about your company, who they are, and what products or services they are into.
- List of Resumes and Qualifications – Just like applying for any other job, you should always include a resume on other completed jobs and responsibilities during those jobs.
- Safety Plan – This is important if you will be using heavy machinery, chemicals, or anything else that could be hazardous or harmful. Clients like to know what your contingencies are if there is an accident and what you are prepared to do to prevent one.
Finally, make sure everything is correctly filled out. Mistakes may cost you the job. Send two signed copies to the client along with an SASE and if you get the job, have the client sign both copies and return one to you.