What’s an RFT, ITT or RFP? How do I know what the different tender documents are?
Whilst government tenders over a certain threshold are required by Australian law to advertise via the AusTender portal (under the Commonwealth Procurement Rules (CPRs)), large organisations, corporations and multi-nationals have their own set of internal procurement rules which govern how they approach purchasing and supply. In many cases this includes establishing thresholds within which departments or individuals can authorise purchases, and a set of rules about how they must carry out the purchase.
As an example, a corporation might stipulate that purchases under $10,000 can be authorised by an individual who holds the post of Director or above, and that purchases between $10,001-$100,000 must seek to obtain three quotes from the market-place and select the most competitive (this closed or restricted process is often known as Request for Quote RFQ or Request for Proposal RFP). Purchases over $100,001 may be required to be conducted through a formal procurement process, issuing Request for Tender and either advertising via a specific portal or issuing tender documents to a restricted group of suppliers within the market.
These internal company rules will vary between different companies and the choice to advertise will depend on the type of service and market. For many highly competitive industries, the choice to conduct an open tender process can result in responses from hundreds of competitors. This can create an incredibly onerous process for the Principal, having to compare hundreds of proposals from a range of different suppliers. An alternative method for streamlining this process during the tendering phase is to introduce a stage prior to the RFT/ITT. In Australia, this is called an Expressions of Interest (EOI) or Pre-Qualification Questionnaires (PQQ). Both of these processes will help the Principal to create a shortlist of suppliers who have the necessary credentials to be able to carry out the contract. This may include details such as company size (including financial and personnel metrics) and other high level operational capabilities such as ability to carry out a specific methodology.
Whether the Principal conducts a shortlisting exercise through the market, such as EOI or PQQ, or their own internal process, this allows them to progress the tender process via a restricted tender, inviting specific shortlisted organisations to the formal tender process. If this process ensues, the opportunity will not be advertised publicly.
It is important that a service organisation concentrating business development efforts on tendering in the commercial business space, ensures they have suitable sales and marketing resources supporting the bidding effort. There must be resources actively working on your market positioning and value proposition to the market, to ensure you are shortlisted and invited to tender in the first place.
When searching online portals for government or commercial business opportunities, there are several different types of document to look for:
Whole of Government (WOG) Tenders
Whole-of-government arrangements (contracts, standing orders and/or template documents) are often established to provide government buying power. By bringing together multiple agencies or departments where they will be required to purchase the same services, often provides cost savings and efficiencies across the network. This arrangement refers to a single supplier to multiple agencies or government departments.
In some circumstances, government organisations may call for development of a panel of suppliers. Often called ‘multi-lists’ (MUL) this refers to “a list of pre-qualified vendors, who have satisfied the conditions for inclusion” (Source: Commonwealth Procurement Rules). The commonwealth multi-list is a formal procurement tool which pre-qualifies multiple suppliers to a contract scope. The individual work orders or ‘call off’ arrangements are enacted by the government organisation when they wish to engage a supplier.
Approach to Market (ATM)
All other opportunities identified via the tender portal/s are known as an Approach to Market, and these can include the following:
- Expression of Interest (EOI): Whilst some requests for Expressions of Interest will include a list of questions and format for the suppliers to follow, some may be in a very simple format, including a single line stating (for example) “Expressions of Interest are being sought for cleaning services to the XXXX City Council. Responses should be forwarded via email to firstname.lastname@example.org”. If the document does not provide a specific set of questions or format, ensure a response is prepared on your company template or letterhead outlining your company capability and interest in being invited to tender.
- Pre-Qualification Questionnaire (PQQ): A Pre-Qualification Questionnaire will often be provided in a specific template with a very specific set of questions outlined for the supplier to respond to. Unless the document states that you should not alter the template in any way, you may copy the template details (questions and tables as required) into your own letterhead and table. Always ensure you retain the structure outlined by the Principal procurement team and documents. This may include tables, numbering, heading structure, etc. This will help the procurement team to ensure the answers match their assessment criteria.
- Request for Tender (sometimes also called ‘Invitation to Tender’): This is the most common format of tender documents. The Principal will outline a set of instructions via Conditions of Tender or General Conditions documents, which is supplied alongside the Request for Tender response schedules. In the majority of cases, tender documents will outline a set of questions and requirements that need to be responded to by the tendering organisation. These instructions should be followed carefully, ensuring that all questions remain easily identifiable and in the same order as they were provided. A draft services agreement will often be released with these RFT documents, and should be subject to a legal review prior to submitting your response.
- Request for Proposal (RFP) can sometimes be less formal than Request for Tender documents. Rather than a specific set of questions, the RFP might outline set of guidance statements about the information they would like to receive. This allows the tenderer to provide a document of their own structure. The tenderer should put together a response document outlining their experience and capability and submit in accordance with the instructions by the due date.
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