We are not alone when we open a tender document and feel overwhelmed. Tenders are not written to be easily understood; they are written to be compliant. Most guides available on the internet either repeat textbook definitions or oversimplify a system that is deeply procedural, legal, and risk-oriented. This FAQ is designed to fill that gap.
This guide focuses on government tenders, with relevance to PSUs and large private tenders. It is written from the perspective of how tenders actually function on the ground, not how they are explained theoretically.
Why Do Governments Use Tenders Instead of Direct Hiring?
Government procurement operates on the principle of competitive neutrality. Direct hiring introduces discretion, and discretion increases corruption risk. Tenders reduce human judgment by forcing decisions to be made strictly according to pre-declared criteria.
This is why even when a department already knows the most capable vendor, it still floats a tender. The tender is not about discovering who to choose. It is about proving, on record, why a particular vendor was chosen.
What Types of Tenders Exist?
Tenders are broadly classified based on scope and complexity. Open tenders allow any bidder who meets eligibility criteria to participate. Limited tenders are issued only to empanelled or shortlisted vendors. Single-tender or proprietary tenders are rare and are usually justified only in cases of emergency or exclusive ownership.
From a bidder’s perspective, the more open a tender is, the higher the competition. However, open tenders also have more standardized and predictable evaluation criteria.
Tender Bidding Process in Detail
The process begins with the publication of the Notice Inviting Tender (NIT) on portals such as GeM, CPPP, or state government platforms. This is followed by document download, pre-bid queries, bid submission, bid opening, technical evaluation, financial evaluation, and finally the issuance of the Letter of Award.
What most bidders fail to understand is that evaluation happens exactly as written in the tender document. If a clause states that documents must be uploaded in Cover-1, uploading them anywhere else leads to rejection. Intent does not matter. Compliance does.
What Is the Difference Between Technical Bid and Financial Bid?
The technical bid answers one fundamental question: Are you eligible and capable of executing the work?
The financial bid answers the second question: At what price will you execute it?
Technical bids are evaluated first without reference to pricing. Only bidders who qualify technically move to the financial stage. Many first-time bidders fail here by focusing excessively on price while neglecting documentation quality, experience proofs, and formatting requirements.
Why Is EMD Required and Is It Refundable?
EMD, or Earnest Money Deposit, is not a fee. It is a commitment filter designed to prevent non-serious bidders from blocking tenders.
If a bidder loses the tender fairly, the EMD is refunded. If a bidder withdraws, submits false documents, or refuses to accept the award, the EMD is forfeited. In practice, EMD also signals how competitive and serious a tender is.
What Is BOQ and Why Is It So Important?
The Bill of Quantities, or BOQ, is where tenders are quietly won or lost. Many bidders treat it as a simple pricing sheet. In reality, it is a long-term risk contract.
Rates quoted in the BOQ are binding. A misinterpretation of units, scope, or tax inclusion can destroy margins for years. Government departments rarely allow price revisions unless explicitly stated. Quoting aggressively low prices without understanding execution realities is not smart bidding. It is slow failure.
How Is L1 Determined and Is L1 Always Selected?
L1 refers to the lowest evaluated bidder, not necessarily the lowest quoted price. Financial evaluation may include loading, normalization, tax corrections, or penalties for conditional bids.
While L1 is usually awarded the contract, departments reserve the right to reject all bids if prices are unrealistically low or high, or if competition appears distorted. L1 is a rule, not a guarantee.
What Are the Most Common Reasons for Tender Rejection?
Most tender rejections have nothing to do with price. They are caused by documentation discrepancies. Common reasons include incorrect experience certificates, shortfall in turnover, missing affidavits, unsigned pages, incorrect file naming, or uploading documents after the deadline.
In tendering, being almost correct is the same as being wrong.
Can New Companies Win Government Tenders?
Yes, but selectively. New companies often struggle with eligibility conditions related to past experience and turnover. However, many startup-focused, MSME-reserved, and GeM tenders relax these norms.
Smart new bidders focus on service tenders, pilot projects, rate contracts, and MSME-reserved opportunities instead of large EPC or infrastructure projects.
What Matters More: Compliance or Price?
Tender evaluation works like a mathematical equation. Compliance is binary, either zero or one. Price is relative.
If compliance is zero, price becomes irrelevant. A perfectly priced bid with one missing annexure is still rejected. This is why experienced bidders invest more time in compliance review than in pricing strategy.
Is Tendering Profitable?
Tendering is not about high margins. It is about volume stability, credibility, and long-term contracts. Margins are thinner, but payments are predictable, and repeat business is common once trust is established.
The real profitability comes from operational efficiency, not aggressive pricing.
How Long Does It Take to Win a Tender?
From publication to award, a tender can take anywhere from 30 days to six months. Execution may continue for years. This makes cash-flow planning critical. Tenders reward patience, not speed.
Final Thought
Tenders are not difficult because they are complex. They are difficult because they are unforgiving. Once you understand that tenders reward discipline over brilliance, the system becomes predictable.
Winning tenders is less about beating competitors and more about not giving evaluators a reason to reject you.
When you approach tenders with that mindset, you stop guessing and start winning.
