Tendering

The following information is designed to give an overview of the Tendering procedure. This includes the preparation before the tendering process is started, what the tender thresholds are, and how to handle receipt of tenders, along with all other relevant information.

The definitions of "quotations" and "tenders" vary from institution to institution. The interpretation used for the purposes of this guide is that "quotation" is the relatively straightforward exercise of seeking price and delivery details for goods or services which are easily specified. A "tender" is the more formal and detailed exercise of obtaining sealed bids for goods or services where the value is high, or the specification is detailed or complex, or where special terms and conditions apply.

What Tender Thresholds Are

Below are the MINIMUM number of written or verbal quotes required, or the level at which full tendering procedures are necessary. Whenever possible these must be adhered to.

Other important thresholds:

ALL: Orders placed that are not based on the least expensive quote require to have a written justification held on file.

When it is claimed there is only one supplier available for a product or service, this must be based on clear evidence (not the supplier's opinion) and authorisation sought from the Head of Procurement for all purchases over £25K.

How To Tender

This section provides guidance on managing a tendering exercise and includes examples of standard tender papers. These documents are available for downloading from within these pages and must be modified (particularly the contact details) for use in any project. The simple form of contract included as an example is more appropriate for the purchase of goods than services. As service contracts can take many forms it is often preferable to write a bespoke contract to fit an individual requirement.

Purchasing and Procurement Services retain model contracts which may be used for the procurement of services such as hiring a consultant. Contracts for goods or services estimated to be worth £25,000 and above must be subjected to a formal tendering exercise.

Always use the Procurement department to manage a tender exercise if you have not used a formal procedure before, or have limited experience. We provide a free resource, will assist you to improve your skills if you wish to operate more independently, or will handle the complete administration up to letting of contract if required. Please remember that the team best equipped to obtain value for money within any market is one combining both technical knowledge and commercial skills.

The aims of a formal tendering exercise are to subject the proposed supply to a competitive bidding process in order to obtain best value for the University, and ensure that procedures used in the expenditure of public funds are sufficiently fair, impartial and robust to stand up to the closest scrutiny of outside parties (such as funding bodies or auditors) or legal challenges.

With these objectives in mind it is important that we operate within a set of tendering rules. As well as the formal instructions which are issued for potential suppliers to follow, it is important for our practices to comply with principles of good commercial procedure. The following are offered as guidelines:

Preparation

• Plan the process.Agree what the significant dates will be and who will be involved at each stage. You should invite a senior member of staff from outwith your department to witness the opening of tenders.
• Establish a means of recording the tendering process from start to finish. It is recommended that departments maintain a register of all tendering exercises. An example of a tender recording form can be found here.
• Allow sufficient time and resource to manage the process. Some complex tender exercises can take 40 to 60 hours of work to complete and it is not possible to cut corners.
• Properly explore the market. In most situations it is best to ensure that all possible suppliers are given an opportunity to bid. Decide whether it is necessary to invite applications, advertise the contract notice locally, nationally, in specialist publications or in the European Journal.
• Decide on an "open" or "restricted" process.Is it necessary to invite firms to qualify to tender (restricted) or will you issue tender papers to anyone who applies for them?
• Keep a record of all of the suppliers who have applied to tender or who have been invited to tender.

Tendering

• Using the examples provided in this section as the basis, prepare and issue the tender documents.
• Allow adequate time for the suppliers to respond properly.This will obviously vary with the complexity of the specification, but a minimum of three weeks is recommended.
• Once you have issued a formal notice of anything – including deadlines for receipt of tenders – you have an obligation to ensure that it is rigidly adhered to by all parties.
• Treat all potential suppliers equally.
• Control the channels of communication.Some firms will try to gain advantage over others by discussing the tender with you or your colleagues in order to gauge areas of particular interest, or even just to establish contact to talk in general about the tender. Give clear instructions to tenderers on who their contacts are. Keep communications formal.
• If valid questions are received from one firm before the tenders have closed, circulate the questions and your detailed responses to all of those in receipt of invitations to tender in the form of a "pre-tender circular".

Tender Receipt

• You will have fixed a time for receipt of tenders.Immediately after tenders have closed perform a document check so that any papers received in the mailroom, at reception or by the departmental secretary are received for consideration. Ensure all tenders are securely locked away until the opening ceremony. Late tenders should be opened, recorded, marked appropriately then returned to tenderer.
• When opening the tenders invite a senior member of staff (preferably from another department) to witness the process. Record details of the tenders received.
• The tenders submitted should not be used as the starting point for a round of negotiations. You must not use one supplier's bid as a bench-mark in discussions with other suppliers. It is permissible to seek clarification.
• Post-tender negotiation should be limited. In particular, in the event of a contract advertised under the terms of the Public Supply / Service Regulations, it is important that the selection of a contractor is made before discussing detailed terms.
• It is not just professional courtesy to brief unsuccessful suppliersof the outcome of the tender exercise: it is actually a requirement under the Public Supply / Services Regulations (where these apply) that you do so, and that you detail the criteria used in your selection in a notice to the Official Journal of the European Union.
• Always record the selection process leading to the award and include the criteria used. This is a formal record which may be used in the event of a challenge from an aggrieved supplier or may be required to complete a Contract Award Notice to be published in the Official Journal of the European Union.

Examples of Tender Documents

If you have little or no experience of managing a formal tendering exercise please do not use these documents without contacting Gary McKinnon for advice or assistance.

Invitation to Tender

A letter such as this with details of enclosures should be sent to potential suppliers. This letter may be used if there are a limited number of suppliers which the University has dealt with before. If there has been no pre-qualification process, or the suppliers are not known to the University, a Supplier Appraisal form should be sent with the tender papers (and accordingly be added to the list of attachments).

Tender Acknowledgement Form

This is used to assist tendering firms to acknowledge receipt of the papers and indicate whether they intend to offer. The simplest way of doing this is to send out a "fax back" page as provided above.

Instructions to Tenderers

This page is to be sent to ensure that there is a clear understanding of what the potential suppliers are required to do, and gives all tenderers the same set of basic rules to operate to.

Form of Tender

This is a formal declaration of offer intended to be certified and returned by tenderers. In order to simplify comparison of bids a "schedule of requirements" may be appended to this form. This is just a means of breaking the tender into the component parts of the supply and expressing this in a tabular form with the intention of standardising the offer format.

Supplier Appraisal Form

This may be used in a pre-qualification process or be issued with the tender documents. Potential suppliers are asked to provide information on financial position, scale of operation, areas of operation and relevant experience. For major purchases it is recommended that a qualified accountant examines the financial submissions before moving to final agreement and award of contract.

Simple Contract

This may be used for the purchase of goods or services which require a clear definition of terms which may differ from those detailed in the General Conditions of Purchase of the University of Aberdeen.

Record of Tender

Use as a check-list to record each stage of the tendering exercise.