tenders: when to participate and under what conditions

Crackers and flour - for this product, Tsar Alexei Mikhailovich issued an order on a contract price for delivery to Smolensk. This was in 1654 and this was the first tender in Russia. The document specified the conditions of the deal for those who could supply at the established price.

The conditions for conducting tenders have been slightly modernized since then, but the essence is the same: a tender is a competitive bidding process. The customer announces the conditions under which he will buy goods or services. And suppliers or contractors offer their options. The customer concludes a contract with the supplier whose conditions are better.

What are the types of tenders?

If we talk about the methods of conducting tenders, then usually a tender is organized in two formats:

• Auction. For example, a certain company needs to transfer all processes to an online format, and for this, specialists are needed. The company sets the initial maximum price of the contract and collects applications from participants - those firms that are ready to fulfill this order. A day is selected and the bidding begins, resembling stock exchanges. All participants offer their prices based on the indicated contract price. The winner is the one who offers the lowest price that cannot be beaten.
• Competition. For example, a kindergarten needs new beds. The kindergarten is not a private person, the director or the caretaker cannot just walk to a furniture store and buy beds. The law requires the kindergarten to announce a tender and select a supplier during the competition. Therefore, the kindergarten specifies the requirements for beds, the criteria for selecting a supplier, and places information about the procurement on a special website for tenders. Then selects a suitable one from all applications.

Tenders can also be:

• Open. Like in the examples described - the tender is posted on the platform and applications from contractors are collected. The registration and application submission procedure has its own features: authorization, often through an electronic key, security system checks.
• Closed. The company offers participation to a limited circle of potential contractors. Such tenders can be either one-stage or multi-stage (prequalification).

We want to highlight another type of tenders:

• Paid. Usually, such tenders are organized by serious and respected companies that value the time and effort of their participants. The company pays a set amount to all tender participants, and a larger amount separately to the winner. There are practically no prepaid tenders, usually post-payment ones.
• Free. Companies participate at their own risk without any payment guarantees. It is quite inconvenient for those who are not just offering a price or a list of services, but are preparing a concept, project vision, architectural plan, training program – in short, intellectual work that will not be paid if you do not win the tender.

Important point: if you submit an application to participate in a tender through a platform, you will also have to pay for participation. Usually, this is about 10% of the potential deal in case of a victory.

The winner is chosen based on the proposed price, portfolio, test assignment, market experience.

Where to find tenders?

There are two types of platforms for conducting tenders:

• — Government platforms (like the example with a kindergarten above), such as Sberbank AST, Roseltorg, Fabrikant.
• — Non-government platforms, such as B2B Center, Bidzaar.

In addition, tenders can find you themselves. If you are working on your reputation, companies can offer you to participate in closed tenders.

Important! Not all company organizers do this with honest intentions. Sometimes tenders are organized to collect market information, find inspiration ideas, get an alternative perspective on their project. Below we explain how not to fall for such a "fake" private tender.

When is it definitely worth participating?

• — The company provides a prepayment or guarantees post-payment of the test assignment with a contract. This way, you will at least recoup some of the costs.
• — The company is open to preliminary communication: briefing, debriefing, online calls, providing some information about their work that may be needed in developing the proposal.

8 Tips from ICU for Tender Participants

But based on our 13 years of experience in the market and going through "the school of hard knocks," we've put together some advice for you.

• Check all emails from unknown mail and domains offering participation in a closed tender. Save your time: call and check if there is really such a tender, whether the company is ready for a preliminary briefing. This concerns unfair fictitious tenders.
• Choose paid tenders, but be sure to clarify how the company guarantees payment: post-payment or prepayment, payment under the contract. If you have decided to participate in a free tender, conduct a briefing with the client and pay attention to their openness to interaction, starting from the manner of communication to the speed of decision-making. This way, you will understand whether it is worth participating in the tender and having such a partner.
• Contact company specialists: this will show your seriousness, and you will learn about the seriousness of the organizers. Our company does not participate in tenders when the organizer is against preliminary meetings and briefings.
• Participate only in tenders in which you have sufficient expertise. Do not waste your energy if you are not sure that the tender is entirely suitable for you or it is from a related field—your chances of winning are already low.
• At the briefing, ask the company representatives about their previous experience and implemented ideas. Otherwise, it may happen that the idea you came up with was already implemented by the company, and your proposal will automatically be discarded.
• If you do not represent a government organization or a very large supplier, and your work is intellectual, it is better not to participate in tenders through platforms: the risk of winning is extremely small, and you will be required to make additional non-refundable contributions.
• Check the organizers: perhaps they are on the verge of bankruptcy, have experience in legal proceedings, or other factors that will already indicate to you that payment may be delayed or the company is not a desirable partner.
• Respect, trust, and mutual understanding - these are the three aspects that should be present between you as a participant and the organizing company.

The two main principles that we unconditionally adhere to when participating in a tender are choosing a tender in which we can demonstrate our expertise to the fullest and choosing a company that is easy to contact and ready for a briefing.