Selective tender is one in which quotations are sought solely from a pre-specified group of contractors. This group is usually pre-selected because they have been judged to satisfy certain specified preconditions.
In selective tender, a number of Contractors are invited to tender. The number invited may range from as few 3 to exceeding 10 contractors. The objective is to invite Contractors whom the Owner and his Consultants are of the view are capable of carrying out and completing the job.
Hence, in Selective Tender, tenderers may be selected and invited to either:
- bid a price for construction only based on design provided by Consultants
- bid price on the basis of providing design and construction
Disadvantages of selective tender
There are several disadvantages of selective tendering:
- the time and resources required to conduct the evaluation process and keep up-to-date approved lists
- the competitiveness is decreased in proportion to the size of the tender list
- that accountability could be considered harder to demonstrate than with open tendering, as marking subjective qualification criteria is open to interpretation
- that the criteria used in selection may not be sufficiently well developed or may not be tailored to the specific needs of the project
Two categories of selective tendering
Selective tendering is categorised as either:
- Single- stage. A shortlist of tenderers is drawn up and they are issued with a full set of tender documents for pricing. The object of selection is to make a list of firms, any one of which could be entrusted with the job. If this is achieved, then the final choice of contractor will be simple- the firm offering the lowest tender. Only the most exceptional cases justify departure from this general recommendation.
- Two-stage. This form of tendering is particularly suited to large or complex schemes where close collaboration with the contractor during the design stage will assist the search for the best solution for the employer in terms of cost, programme and design. The professional team is able to make use of the contractor's expertise when finalizing the design; the contractor has an opportunity to become involved in the planning and key decision-making for the project and build working relationship.
Types of tenders and tendering process
Governments purchase everything from office supplies to airplanes to power generation facilities. But they use different methods to make procurements. While the United Nations, World Bank have developed guidance to make government procurement systems more transparent, there is presently no international harmonisation of procurement methods.
There are three types of tenders:
- Open or unlimited tendering under which all interested suppliers may submit a tender
- Selective tendering, under which a subset of potential suppliers are invited to submit a tender
- Limited tendering, where tenders are sought only from those suppliers contacted individually by the procuring entity. This less regulated from of tender might be appropriate in urgent situations or when the items is of limited value, when a formal competition is not feasible.
Examples of Selective tender
- *Limited tender - is used when there is a need to purchase goods or services from a specific provider. This may be due to the specific expertise of the provider, or due to pre-existing contractual obligations.
- *Single-source tender - is used when there is only one provider able to provide the required goods or services. This could be due to the provider being the only one with the necessary skills or expertise, or because of a pre-existing contractual agreement.
- *Request for proposal (RFP) - is a document used to solicit proposals from potential suppliers. It outlines the requirements of the project, and outlines the evaluation criteria that will be used to select the successful bidder.
- *Invitation for tender (IFT) - is a document used to invite potential suppliers to submit bids for a project. It outlines the requirements of the project, and outlines the evaluation criteria that will be used to select the successful bidder.
A Selective tender approach is just one of several different approaches to tendering for goods and services. The other approaches include:
- Open Tendering: This approach involves inviting tenders from any and all contractors who are interested in the project.
- Limited Tendering: This approach involves inviting tenders from a predefined and limited number of contractors. This may be done when the scope of the project is too large or too complex for open tendering.
- Negotiated Tendering: This approach involves negotiating the terms of the contract directly with the contractor. This is usually done when the scope of the project is specific and the contractor's skills are needed.
- Design-Build Tendering: This approach involves selecting a contractor to design and build the project. This approach is usually used when the project is complex and the scope of the project is difficult to define.
In summary, there are several different approaches to tendering for goods and services, with Selective Tendering being just one of them. Each approach has its own advantages and disadvantages and should be carefully considered before selecting the most suitable approach for any given project.
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Author: Brygida Mordarska