Thursday 22 August 2013

Why do Governments Prefer to Tender?

Every year, Crores of rupees are spent on purchasing a large selection of services, goods and infrastructure by the government, big industrial units and semi-government organisations. Most of the purchasing is done from private sectors and such kind of procurement ensures honest and unbiased competition among the suppliers. 

Over the Years, Government Tenders still remain the best method of procurement for the governments which guarantees them the best market offer. Government tenders give all the suppliers equal opportunity to bid for an order by giving them the same objectives to work on while maintaining fairness. Governments release tenders in various local, state and national newspapers depending on their requirement. Only recently, online tender portals have aggregated this tender data into relevant compartments for suppliers to easily access the tender details.



For Effective Involvement in the Market, it is important that the Suppliers understand that the government is not one unit but it is an amalgamation of many departments that have their own unique criteria and requirements.

Hence, it is important that the suppliers investigate, study and explore so they are able to precisely target the departments that are more likely to use their goods and services. After they shortlist the departments, they then start the process of negotiation.

In government tenders, each of the public sector bids is carefully measured on the same objectives and platforms without any bias. Private sector companies, whose bids win government tenders do so because of their expertise and competence in providing the right bid to the tendering board committee. The proficient companies also take the precaution for preparing a tender document which caters to all the requirements mentioned in the government tender. This gives them a greater advantage over the other private sector bids.
On the other hand, the companies that have not made the cut blame the procurement and tendering process. Many a times, rumours regarding rigging of tenders do the rounds.

Despite Such Negative rumours, Government Tendering remains one of the most transparent and unbiased method of procurement when the guidelines and the code of instructions are Strictly followed.