An open tendering process is an invitation to tender by public advertisement. All interested contractors/suppliers are free to submit their tenders. Notice of tender invitations are published in the Government Gazette and, if necessary, in the local press, on the Internet and in selected overseas journals for the particular trade/product. This method was probably the traditional method until more sophisticated techniques were accepted. This method of tendering has the benefit of attracting number of tenders and hence the price the obtained are usually very competitive.
The advertisement will carry brief details of the location, type, scale and scope of the proposed works.
Advantage of open tendering
1. Unknown contractor can tender for the work
2. Open tendering secures maximum competition.
3. There is no restrictive list of tenders, which does not allow favoritism – a valid point for local authorities who are publicly accountable.
4. There is no obligation to tender therefore all tenders received will be genuine.
Disadvantage of open tendering
1. Cost of tendering is expensive to the client who must bear the cost of reproducing multiple copies of drawing, bills of quantities, etc.
2. The wrong contractor can be chosen. Little may known about the contractors – their record, experience, standard of workmanship, etc.
3. The lowest tender may not necessarily be a “bargain”. Choosing a low tender may result in.
. poor work – a large number of, or even permanent, defects may occur unless there is close supervision by the client’s agent.
. poor organization – late completion, specialist subcontractors delayed, etc.
4. It is lengthy operation requiring skilled estimating, the cost of which must be recovered on the job by the contractors. The higher the proportion of unsuccessful tenders the higher the cost to be recovered on the job.
5. A contractor may be awarded work for which he has little or no experience and which he be ill-equipped to deal with.
The use of open tendering on public sector contracts is required by law in several developing countries. But In many countries, private sector clients generally avoid open tendering.