How to run a tender and select the right suppliers

Getting the wrong supplier can cost you time, money and often your reputation. Follow these simple steps to make sure you get it right.

Time needed: 60 days.

Getting the wrong supplier can cost you time, money and often your reputation – after all – you chose them!
Follow these simple steps to make sure you get it right.

  1. Shortlist all potentials

    Within any marketplace there are usually a lot of companies to chose from. Too many to include in a tender so undertake a shortlisting exercise first. Be clear with what you MUST have. In this example, we MUST have XYZ. There are 20 firms who provide the type of product or service we need, but on closer inspection, only 8 can provide XYZ. The others may get close, but not exact so immediately we can reduce the tender size from 20 to 8.

  2. Run the tender

    There are 3 main types of tender that you can run depending on how detailed (or not) your requirements are.
    Request For Information (RFI)
    You have a general idea of what you need but not necessarily how it would work from start to finish. You may also have various options and do not know which is best. In this case issuing an RFI is the best option.
    Request For Proposal (RFP)
    You know what you need to quite a detailed point and need to establish how this might be achieved and what the costs might be. These costs may also vary depending on what is delivered so decisions on that need to be made. In this case issuing an RFP is the best option.
    Request For Quotation (RFQ)
    You know EXACTLY what it is you need, and exactly how it needs to work. Your specifications are clear and unambiguous. You need to understand costs and time for delivery. In this case issuing an RFP is the best option.

    Some procurement departments will issue a RFI, then an RFP/RFQ as their understanding becomes clearer.

  3. Due Diligence

    Having run through your process you have a clear winner in your tender. On paper at least. In order to ensure that the reality matches the tender responses you should now verify what you have been told. This will usually entail;
    – Undertaking background checks on the company (trading history etc)
    – Checking that the company is financially viable
    – Visiting the operation to ensure that it is exactly what you have been told it is

  4. Agree contract and final commercials!

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Last Updated : October 15th, 2020

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