Difference Between Quotation and Tender

Quotation refers to a fixed-price offer made to the customer in response to a tender notification. It is legally binding, and once approved by the buyer, it cannot be modified. It differs slightly from a tender, which represents the prospective supplier's response to an invitation to tender.

An organization may publish an open call for proposals in the neighborhood newspaper to solicit bids from prospective and interested suppliers for the provision of goods or services. This is known as an invitation to tender.

It is provided for a variety of contracts, including construction, machinery supply, and software delivery. The tendering process includes inviting tenders, submitting tenders, and filling out quotations.

What is a Quotation?

The quotation can be interpreted as an official statement of commitment issued by the potential supplier to supply the specified goods or services required by the purchaser at the price quoted under the conditions.

It contains the terms of sale, payment, and warranty, including the price agreed to charge for the goods or service, the day, time, and location of delivery, and the validity period of the quotation.

Before making a purchase, a buyer can get a quote to find out how much something will cost. Government firms typically issue tenders to collect bids.

What is a Tender?

A tender is merely a reply to a request to propose to provide services or goods at quoted pricing and defined quality, subject to certain criteria.

When a government undertaking, financial institution, or large firm wants to purchase items on a large scale, engage services, or acquire/construct anything but is unable to do so on their own, they issue a tender invitation. Third-party vendors are asked to bid on and submit tenders for this purpose.

The tender document is issued to prospective suppliers to gather information and pick a supplier based on pricing, delivery terms, and availability. Within the given timeframe, interested sellers may reply to the request for proposals by sending their best offers in sealed covers under proper authorization.

A tender is like a contract competition in which potential suppliers are asked to submit bids that include the desired material's quality and price.

To uphold transparency in their activities, the invitation must be published in the state or nation's vernacular media.

Key Distinctions Between Quotation and Tender

The quotation is an offer with a set price that cannot be altered once the client accepts it. On the other hand, a tender is a reply to an invitation to a tender that is used to determine the highest value for money among prospective providers.

Tenders and quotations are both forms of offers. A quotation responds to a Request for Quotation (RFQ), whereas a tender responds to a Request for Tender.

The sole significant component of the quotation is the price, which indicates the cost of the contract as presented by the provider. In contrast, the tender includes two primary elements: price and quality. Price establishes the best price supplied by the supplier, which is contrasted to other suppliers, and quality determines the provider's ability to deliver the goods requested.

Since the quotation is included in the tender and includes the pricing of the item to be delivered, the scope of the tender is broader than that of the tender.

Difference Between Quotation and Tender

Conclusion

To meet their vast demand, government agencies or corporations will issue bids or request quotations. They effectively manage their resources and deliver good value for money.

In a tender, suppliers are invited to submit bids for the goods or services that the company needs, and in a quotation, the bidders respond by providing a price quote for the goods or services. Another name for a quotation is an estimate provided by experts for a work. Quotations are less formal than tender.