Tendering can be a very complicated and time-consuming activity, and some may have no idea where to start, particularly if they have never previously submitted a bid.
Government procurement, also known as public procurement, is a complex sector involving multiple legal frameworks, regulations, and procedures, all of which are frequently extremely bureaucratic and complicated.
However, thousands of organizations working within this sector do secure lucrative contracts, which means that everyone has a chance of success.
Knowing the differences between the types of tendering processes is essential for a successful bidding strategy, and this article describes these so you are better prepared to put together a winning bid.
The normal approach to granting contracts involves competitive tendering, which encompasses a variety of public procurement procedures.
Open procedure: A government tender opportunity open to all
An open procedure is the most popular since any interested applicant can submit a full tender.
Restricted procedure: A selective tendering process
As the name suggests, only pre-selected individuals/companies can submit a bid for this type of government tender, although anyone can request to take part in a restricted procedure.
Competitive dialogue
The government or other contracting authority may use this approach to find a way of meeting a particular need it has identified.
This is a flexible procurement procedure that is mostly employed for complex projects when the exact requirements or solutions cannot initially be fully defined.
The contracting authority and the shortlisted bidders engage in a systematic dialogue to arrive at and then refine a solution that best fits the project's requirements.
One example of this would be the development of a complex administrative and digital test and examination follow-up system announced by an educational authority.
Competitive procedure with negotiation (CPN)
A competitive procedure with negotiation (CPN) is a flexible public procurement method used when the contract requirements are too complex to define initially or when negotiation is needed to achieve the best value.
While open to all applicants, only prequalified candidates are invited to submit initial tenders. The authority may then choose to award the contract based on the initial offers or enter into negotiations to refine the terms.
Commonly used in sectors such as defense, energy, water, and transport, CPN provides a balance between competition and flexibility.
Unlike competitive dialogue, it allows a contract to be awarded without negotiation if the initial proposal fully meets its stipulations. It is particularly suited for strategic, high-value, or innovative projects.
Negotiated procedure
This is a flexible procurement method that allows direct negotiation between an authority and one or more suppliers. The are two forms of this:
1. Negotiated procedure with prior call for competition, which:
- Has a broad negotiation scope
- Encourages incremental or radical innovation
2. Negotiated procedure without prior call for competition, which is rare and strictly limited by law. The negotiated procedure can be used to procure innovation primarily in cases such as:
- R&D contracts
- Following a design contest
- Exceptional circumstances.
Innovation partnership: Public procurement for research-driven contract opportunities
In public tendering, an innovation partnership involves public entities working with private sector partners to create and then implement novel solutions that are not currently available on the market.
The approach can be broken down into three stages:
- Choosing partners based on their capacity to deliver an innovative solution
- Conducting research and development to arrive at a solution
- Acquiring and implementing the solution
Design contest
A design contest is a competitive process used by contracting authorities to find the best design concept through fair competition.
This procedure is most common in sectors such as architecture or urban planning and can either lead to a contract being awarded to the winner or simply a reward for the participants, which may include prizes or payments.
If the contest could lead to a contract for the winner, then the value of that must be taken into account when deciding if the contest must follow certain regulations, such as EU procurement rules.
Framework agreement
A framework agreement is a prearranged contract that includes specific information about the conditions for future contracts (call-offs) over a predetermined period of time between one or more procuring entities and one or more contractors or suppliers.
This streamlined strategy enables buyers to obtain goods and services without going through long, individual tender procedures for each purchase.
It outlines the general terms, such as pricing and specifications, for future orders but does not guarantee an exact volume of work.
Direct award
A direct award occurs when a government contract is awarded to a particular supplier without there being a competitive bidding procedure.
This approach avoids traditional tendering procedures, and the contracting authority selects the supplier directly.
Direct awards are allowed in certain situations specified in a country’s procurement regulations.
Dynamic purchasing system (DPS)
A DPS is an electronic procurement system that public sector buyers use to purchase goods, services, and works.
In contrast to traditional frameworks, a DPS creates a dynamic and open marketplace by enabling suppliers to take part at any time, provided they meet the selection criteria.
If you are interested in competing for and winning government tenders, register on the Tenderwell platform to find opportunities that suit your organization, and never miss an opportunity or an important update within the sector.
Tenderwell – your platform for government tenders
Tenderwell is a global tender aggregation and tracking service designed to help businesses to find, monitor, and win public procurement opportunities.
The platform boasts 25+ million worldwide tenders, including forecast, open, closed, and awarded bids.
Sources range from government publications to international, regional, and commercial contracts, available from nearly 200 countries.
Tenderwell is a powerful tool that helps you to search for and monitor tender opportunities around the world, using smarter filtering, forecasting, and update alerts.
Registration on the Tenderwell platform is an easy, three-step process.
Final word
If your organization is looking to engage in public procurement, it is vital that you are aware of and completely understand the different types of public tendering procedures.
Each procedure, whether it is the widely used open procedure, the more selective restricted procedure, or specialized options like innovation partnerships and design contests, serves a purpose based on the nature of the project and the level of competition or innovation required.
Knowing how each process works can open up new opportunities and make navigating public sector contracts easier and more strategic.