Tender vs Quotation
Tender and quotation have become very common words that people use in daily lives. We ask for a quotation from a website providing insurance services and also ask a plumber for an estimate before he begins work when something goes wrong with plumbing accessories in bathroom. Tender is a word that we hear in connection with bids invited by government departments for completion of public works and projects. Big companies float tenders to search contractors who can get the work done in a short time and at a desired quality level. There are many similarities in tender and quotation though there are differences also that require them to be used correctly in different contexts. Let us take a closer look.
Tender
Tender is a very important way of procuring goods and services for a company, especially a public sector company. In fact, tender is a document that lays down the terms and conditions of the offer; the work required to be done that in an acceptable quality is also spelt out in the document. The company is the buyer in this case and suppliers and contractors are the sellers as they provide their bids in sealed envelopes describing their offer price and the manner in which they propose to complete the work. Tendering is the interest shown by bidders as they make bids or offers in response to invitations set out by companies in the form of advertisements in newspapers.
Companies do not necessarily go in for the least amount of a bid as they have to ensure that the work is completed within a time limit and to the satisfaction of the company.
Quotation
Quotation can be considered as a formal document submitted by interested parties in response to an invitation called tender by companies. Quotations received by a company that has floated a tender allow it to come to a conclusion as to which of the bidders is the right party to supply the product or complete the work. A request for quotation has become a standard business practice whereby suppliers are invited to bid for products and services.
Quotation is a process that all of us make use of in our lives as when we have to get a work done at home or business premise by a professional. We ask for a quotation from insurance agents, plumbers, electricians, and even roofing experts before deciding in favor of a particular contractor or supplier.
What is the difference between Tender and Quotation?
• Tender is the formal process of asking suppliers to bid on the products and services required by a company.
• Quotation is the response of the bidders where they quote their price for the goods and services.
• Quotation also refers to the estimate that people ask from professionals for jobs that they require done.
• Tenders are more formal than quotations.