What is a Tender?
Tender is an offer or bid by a Tenderer, either an individual or a legal entity, under which the Tenderer offers to perform Works/Services or supply goods based on Clients’ (ITT or RFQ) requirements for a price (“consideration”).
The Tender submitted, normally comes with a validity period for acceptance that is Client defined known as the “Tender Validity Period”.
An often overlooked, key provision in an ITT is the Tender Validity. In legal terms, a Tender accepted by a Client during the Tender Validity period constitutes a binding agreement between the Client and the successful Tenderer (Contractor). Whereas, upon expiry of the Validity period, the Tenderer is no longer obliged by law to honor the terms of its Tender. In actual practice what happens is altogether a different matter as decisions made in this regard quite often could be based on commercial considerations. The occasions on which the Tenderer might not be able to hold on to its offer at validity expiry is if there is a serious error in the Tender or if the Tender has large value subcontract and such subcontractors are unable to guarantee validity and such other factors.
It thus becomes important that Tenders are kept Valid for acceptance at all times, as necessary often overlooked due to workload or other constraints.