Meaning of Tender & Quotation16/10/2022 1 By indiafreenotes
Tender is nothing but a response to an invitation to offer to provide product or services at quoted prices and specified quality, but subject to specific conditions.
An invitation to tender is floated by the government undertaking, financial institution or a big corporation for different projects, when they want to purchase goods on a large scale, hire services or acquire/construct something but they are not able to deliver it on their own. For this purpose, third party suppliers are invited to bid and submit tenders.
The tender document is sent to prospective suppliers, to solicit information, to select the supplier on the basis of price, delivery terms and availability. The sellers who are interested in the request for proposal can respond to the request, within the deadline specified, by submitting their best offer in sealed covers, with the appropriate authority.
Tender is like a competition for a contract, where various prospective suppliers are requested to submit tenders, containing the price and quality of the material required.
The invitation is published in a vernacular newspaper of the concerned state or country, as it is a mandatory requirement, to maintain transparency in their operations.
The quotation may be understood as a formal document of promise, given by the prospective supplier, to supply the stated goods or services needed by the buyer at the stated price under specific conditions. It comprises of terms of sale, payment and warranty, which includes the price decided to charge for the product or service, date, time and place of delivery, validity period of quotation.
Quotation helps the buyer in knowing the cost of goods or services, before making a purchase. In order to obtain the quotations (i.e. price for the required material), generally, tenders are floated by the government enterprises.
|Supplier bid on goods/services.
|Document of estimated cost for supplying goods/services.
|Find out the best price.
|Offering fixed price.
|Response for request for tender.
|Response to request for quotation.
|Price and quality are the components in Tender.
|Price is the component in quotation.
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