Tender: What It Is and How to Participate

A tender is a competitive process for selecting a supplier of goods or services, organized by a customer to secure the most favorable terms for fulfilling an order. By participating in the selection process, small and medium-sized businesses can find new customers, increase sales, and ensure a steady stream of contracts. Let’s take a closer look at what a tender is, how it works, what types exist, and how to participate in them correctly.

What Is a Tender?

A tender is a form of competitive selection process in which proposals are solicited from various companies for the supply of goods, the performance of work, or the provision of services. The term is used as a synonym for “electronic auction,” “open bidding,” and “competition.” The main goal of this procedure is to find the optimal balance between price and quality for the goods or services offered.

The tender process involves publicly announcing the terms and conditions, accepting bids from participants, and selecting a winner based on predetermined criteria. The fundamental principle is a competitive approach, which allows the contracting authority to select the best proposal from among all those submitted.

The advantages of the tender process are clear: for companies, it offers the opportunity to secure the most favorable terms; for contractors, it provides a chance to find new clients and expand their business. The English term “tender” translates to “proposal,” and the entire process is based on a competitive bidding process.

Types of Tenders

Contests are divided into several main categories. Depending on the organizer:

• Government (public) — conducted by government agencies, local government bodies, and state-owned enterprises;
• Commercial — organized by private companies to find suppliers of goods or services;
• International — tenders conducted by international organizations or foreign companies.

What is a tender in terms of its format:

• Open — all interested companies that meet the eligibility requirements are invited to participate;
• closed — only performers who have received a personal invitation from the organizer are admitted;
• Two-stage — first, participants are selected based on eligibility criteria, and then their proposals are evaluated.

Each category has its own characteristics and rules, so it’s important to familiarize yourself with the specifics of the competition before participating.

Stages of the Tender Process

So, here’s how a tender is conducted in stages:

1. Announcement — The organizer publishes information about the tender on relevant platforms or on its own website.
2. Submission of Proposals — Participants prepare and submit their proposals in accordance with the requirements of the tender documentation.
3. Electronic auction — In the case of electronic tenders, the process consists of several stages during which participants can adjust their price bids.
4. Evaluation of Proposals — The client evaluates the submitted proposals based on established criteria.
5. Selection of the winner — the participant with the best proposal is chosen.
6. Signing the contract — a contract is signed with the winning bidder.

For government tenders, the stages are clearly regulated by law, specifically by the Law of Ukraine “On Public Procurement.” Commercial tenders have more flexible terms, which are determined by the organizers themselves.

When is the tender held?

Whether a tender is held depends on the organizer. For government agencies, the law requires them to announce a tender if the value of the purchase or contract exceeds the established thresholds. For goods and services, the threshold is 200,000 hryvnias; for construction work, it is 1.5 million hryvnias. If the amount is below the established thresholds, the customer may conduct a simplified procurement or enter into a direct contract.

Commercial companies organize tenders when ordering large quantities of goods or services, implementing major projects, or seeking long-term partners. Tenders are often held to modernize production, purchase equipment, or hire contractors for construction or renovation.

The frequency of tenders depends on the organizer. Some tenders are held regularly (monthly, quarterly), while others are held as needed.

Who is conducting the tender?

The organizers are various entities, each of which pursues its own objectives during the competitive bidding process. Who conducts the tender:

• government agencies and local government bodies—ministries, departments, state-owned enterprises, schools, hospitals, city and regional councils;
• private companies—ranging from large corporations to medium-sized businesses—that are looking for suppliers or contractors;
• international organizations—the UN, the World Bank, the EBRD, and other institutions that fund various projects;
• civil society organizations—charitable foundations and nongovernmental organizations that carry out social projects.

Each organizer sets its own rules for conducting the tender, as well as the criteria for selecting participants and evaluating proposals. Government contracting authorities are required to comply with public procurement laws, while commercial organizations have greater flexibility in establishing the terms of the tender.

How to Participate in a Tender

Participating in a tender is a step-by-step process that requires thorough preparation and attention to detail.

Step 1: Search for relevant tenders

The first step toward participating in a tender is to find current opportunities that match the company’s business profile. You can use various sources of information to conduct your search.

Government tenders are published on the ProZorro e-procurement system. They can be accessed through authorized e-procurement platforms such as E-tender, SmartTender, and Zakupivli.pro. Each platform offers a user-friendly interface for searching by various criteria: subject of the procurement, region, estimated cost, and so on.

Commercial tenders can be found on specialized platforms (for example, E-tender.ua for commercial procurement), on companies’ official websites in the “Procurement” or “Tenders” sections, as well as through professional associations and business communities.

See also: Modeling and Optimizing Business Processes at a Company

A useful tool is setting up notifications for new tenders based on specified criteria. This feature is available on most online platforms and allows you to quickly receive information about relevant opportunities.

Step 2: Register on the tender platform

Once a suitable tender has been found, you must register on the relevant electronic platform. First, you fill out a registration form with basic information about the company: name, legal address, EDRPOU code, and contact information. Then, verification takes place—either through email confirmation or by submitting additional documents.

Once you have successfully registered, a personal account will be created. To participate in government tenders, you must have an electronic digital signature (EDS).

Step 3: Reviewing the tender documents

A thorough review of the tender documentation is a critically important step that determines the success of your participation in the tender:

• The technical specifications describe the subject of the procurement, its characteristics, quantities, and the deadlines for delivery or completion of work;
• The terms of participation set forth the requirements for participants: possession of licenses, work experience, and financial standing;
• The evaluation criteria specify the parameters used to evaluate the proposals.

Special attention should be paid to the eligibility requirements, as failure to meet them may result in the rejection of the application. It is also important to follow the auction procedures and other procedural guidelines.

If inaccuracies or unclear requirements are found in the tender documentation, you can contact the contracting authority for clarification. The ProZorro system provides a separate mechanism for this—the clarification period.

Step 4: Preparing the Bid Proposal

Depending on the requirements and how the tender is conducted, you will need to prepare a set of documents:

• an application for participation—prepared in accordance with the template provided in the tender documentation;
• a commercial proposal—including prices and terms of order fulfillment;
• a technical proposal—with a detailed description of the proposed goods or services;
• Company documents—articles of incorporation, certificate of registration, licenses, and certificates;
• certificates from government agencies—confirming that there are no outstanding tax debts, that the company’s director has no criminal record, etc.

Each document must be carefully reviewed to ensure it meets the requirements of the tender documentation. Particular attention should be paid to ensuring that the forms are filled out correctly and that the information is up to date.

Step 5: Submitting a Bid

Once all the necessary documents have been prepared, the next step is to submit a proposal. In government tenders conducted through ProZorro, bids are submitted electronically via the user’s personal account on the authorized platform. The documents are uploaded to the system, signed with an electronic digital signature, and sent to the contracting authority.

It is critically important to meet the deadlines for submitting proposals. The ProZorro system automatically closes the submission window once the deadline has passed.

Step 6: Participating in the auction

If the tender process involves an auction, electronic bidding takes place after the bid submission phase is complete. In the ProZorro system, auctions are conducted on a descending-price basis. The selection process takes place in several rounds, and in each round, participants have the opportunity to lower their bid price.

The date and time of the auction are determined automatically by the system. It is important to set a minimum acceptable price in advance—a price below which the company is not willing to go.

Step 7: Waiting for the Results and Signing the Contract

Once the tender process is complete, the contracting authority evaluates the bids in accordance with the criteria specified in the tender documentation. The authority verifies that the bidder meets the qualification requirements and that the bid complies with the technical criteria.

The evaluation results are published in the system, and all participants are notified of the decision. If a company wins the tender, it has the opportunity to enter into a contract.

The contract is concluded in accordance with the terms specified in the tender documentation and the winning bidder’s proposal. The ProZorro system sets clear deadlines for this procedure—no earlier than 10 days and no later than 20 days after the publication of the notice of intent to enter into a contract.

Conclusion

Bids are an effective tool for business development that allow companies to find new customers and increase sales. Successful participation in bids requires an understanding of the procedures, careful preparation of documents, and a strategic approach to developing proposals.

For small and medium-sized businesses, tenders can be a growth strategy, especially when using innovative financial tools such as installment payments through our service eDilo. This helps minimize the financial burden and maximize opportunities for growth.

By starting to participate in tenders, a company not only secures new orders but also gains valuable experience that will help it compete more effectively for contracts and expand its customer base in the future.

FAQ

What are the main benefits of participating in tenders for businesses?

Participating in tenders opens the door to large contracts with government agencies and corporations. Tenders ensure a steady flow of orders and predictable revenue for the duration of the contract. Winning tenders enhances a company’s prestige and strengthens its reputation in the market, while also allowing it to expand its customer base.

What risks and drawbacks should you consider before participating in a tender?

The main risks include intense competition and declining profit margins, the possibility of failing to meet qualification requirements, and delays in payments from clients. Participating in tenders also requires a significant investment of time and resources to prepare documentation, with no guarantee of winning the contract.

How do you calculate the economic benefits of participating in a tender?

To perform the calculation, it is necessary to estimate direct costs (documentation preparation, tender support, certificates), contract execution costs (materials, labor, logistics), and indirect costs (management time, potential penalties). Based on this, the minimum acceptable bid price is determined, taking into account the desired profit margin.

Are there any fees for participating in tenders?

The ProZorro system charges a fee for submitting a bid, the amount of which depends on the expected value of the procurement. Commercial platforms may also charge a commission for access to information or for submitting bids. Some tenders require the submission of a bid bond, which is returned upon completion of the procedure.