An invitation to tender (ITT) is a procedure during which a buyer details their requirements and invites bidders to send in their commercial proposals in order for the buyer to make their choice.
When a company or public body needs to select a service provider to carry out a project, it can launch an invitation to tender, also sometimes referred to as a call for bids, a request for tenders, or calls for tenders. The buyer then defines their needs (product or service) in a set of specifications. Interested bidders submit their commercial proposals, indicating their prices and the details of their services.
Once the company has received all the commercial proposals, it can select the service provider who will be responsible for its project. In the case of equal proposals, the choice is generally made on the basis of the proposed rates.
An ITT is therefore a process that can take place in both the private and public markets. However, it’s mainly used for public procurement.
In fact, the public body is under a legal obligation to publicly transmit the information that it’s looking for an external company.
Invitations to tender are published in a variety of media, depending on the location. For example, an ITT taking place in Europe may appear in the Official Journal of the European Union (OJEU) and specialized websites.
An invitation to tender can take three forms.
It can be open, when all service providers or suppliers can submit their proposals. In addition, it can be restricted, when only those candidates shortlisted by the tenderer have the opportunity to submit a bid. This often occurs in the case of confidentiality issues, such as for a military contract, or in emergency situations when time is of the essence. Finally, there are sole source tenders, where a single potential supplier is invited to submit an offer.
