Procedures relating to International Tenders

The buyers of projects and consultancy services are quite often government organizations. Government procurement is almost universally done through the mechanism of tendering.

International tenders can be classified into three broad categories:

1. Public or open tender: Adequate publicity is given to the floatation of the tender and any firm wishes to participate in the tender is eligible to submit a bid.
2. Selective or Restricted Tender: Only those firms which are already registered with the tender inviting authority are asked to submit their bids; or a prequalification procedure is introduced whereby a short list of qualified bidders is prepared from these who initially applied for pre-qualification.
3. Private or single tender: The tendering authority asks for quotations from a single supplier.

It is also possible to classify tenders on the basis of the degree of discretion allowed to the tendering authority. If a tender is of automatic type, the contract is to be awarded on the basis of criteria which are decided before hand. In the case of discretionary tenders, the tendering authority has a certain degree of freedom to accept a tender which is otherwise considered to be the most advantageous. Most international tenders cannot be classified strictly under any of these headings. However international tenders for standard product/equipment involving not very large amounts are generally of open and automatic type. In the case of high valued contracts, the selective or restricted tender is more common. However the tender may be open even in such cases at the pre-qualification stage and any bidder may submit the pre-qualifications forms for being eligible to submit bids. Such high valued contracts are generally not automatic. The final award is likely to be given after protracted negotiations.

Pre-tender stage: An invitation to bid generally consists of,

1. Name of the tender inviting authority
2. Technical specifications/ standards and quantity of goods / projects;
3. Sources where tender documents can be purchased and the cost thereof;
4. Las date for the receipt of bids and the time, date and venue of the bid opening;
5. The amount of bid bond required , if any and procedural modalities thereof;
6. Sources of outside finance, if any
7. Payment terms and
8. Requirement regarding firm’s quotations for a specified period.

Receipt of Tender Documents: Tender documents may be obtained through the Indian Embassy / High Commission in the tender floating country by sending a fax or now-a-days even e-mail. It should be mentioned in the communication that cost of the tender documents as well as any collection charges will be reimbursed as soon as charge is made. If the company is a member of an Export Promotion Council, it should also be mentioned in the fax/message. In case of large contracts, there will generally be a pre-qualification stage and tenders will be sold only to those companies which are pre-qualified.

In some countries, as in Kuwait, tenders are sold only to local agents. In such cases, local agents may be contacted to obtain tender documents and submit offers through them.

Under the foreign exchange regulations authorized dealers may remit the actual cost of tender documents irrespective of the value involved.

Tender Conditions: One important point to be verified at the initial stage is whether there is a any pre-qualification clause and if so, whether the company is already registered for application or registration has to be made. High valued contracts, with or without civil engineering component generally provide for a pre-qualification clause. Some tender floating organizations have printed prequalification firms while others only indicate the areas where information need to be furnished. Sometimes the tendering authority may indicate the type of work experience which would qualify a prospective bidder for registration.

At the pre qualification stage, applicants are screened on the basis of the assessment made regarding their technical ability, financial resources, position ability to maintain time schedule and the probability of successful execution of the contract.

The tender clauses which should be carefully analyzed relate to:

1. Geographical restrictions
2. Domestic and regional preferences, if any
3. Partial acceptance of the offer;
4. Delivery schedule;
5. Payment and credit terms;
6. Price variations and credit terms;
7. Spare parts ;
8. Inspection and
9. Take over tests

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