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INVITATION TO TENDER (ITT)

GROUP MEMBERS

AHMAD NAUFAL BIN MIRZA NAJMI BIN

UMAR HADI TOKAN KAMIS
INTRODU C TION OF
ITT
 WHAT IS INVITATION
TO TENDER
A FORMAL PROCUREMENT DOCUMENT ISSUED BY THE BUYER INVITES SUPPLIERS TO BID
FOR THE CONTRACT OF WORKS THEY ARE LOOKING TO FULFIL.
RECEIVE AN INVITATION TO TENDER VIA EMAIL, AN ONLINE, OR FORMAL LETTER.
REQUIRE HARD COPY SUBMISSION
A TENDER INVITATION LETTER, OR “INVITATION TO TENDER” IS USUALLY THE FIRST,
FORMAL PART OF THE PROCUREMENT PROCESS. IT IS A FORMAL INVITATION FROM A
PURCHASING ORGANISATION TO PROSPECTIVE SUPPLIERS, TO BID FOR A CONTRACT FOR
GOODS AND SERVICES. IT USUALLY DIRECTS PROSPECTIVE SUPPLIERS TO BID BY
COMPLETING EITHER FINANCIAL OR QUALITY-RELATED QUESTIONS ABOUT THEIR
ORGANISATION, OR A COMBINATION OF BOTH.
 WHAT DOES ITT
STANDS FOR?

STANDS FOR INVITATION TO TENDER.

PROVIDING MORE INFORMATION.
DEVELOP STRONG BID SUBMISSION.
ANSWER THEIR QUESTION.
PROOF OUR BUSINESS CAPABILITY
PURPOSE OF ITT
 INVITATION TO
TENDER
THE INVITATION TO TENDER IS ONE OF THE PROCEDURES FOR GENERATING COMPETING
OFFERS FROM DIFFERENT POTENTIAL SUPPLIERS OR CONTRACTORS LOOKING TO OBTAIN
AN AWARD OF BUSINESS ACTIVITY IN WORKS, SUPPLY OR SERVICES CONTRACT, OFTEN
FROM COMPANIES WHO HAVE BEEN PREVIOUSLY ASSESSED FOR SUITABILITY BY MEANS
OF A AUPPLIER QUESTIONNAIRE (SQ) OR PRE-QUALIFICATION QUESTIONNAIRE (PQQ).
AN IMPORTANT DOCUMENT IN CONSTRUCTION PROJECT AND OTHER PROJECT-BASED
INDUSTRIES.
THE MAIN INSTRUMENT THAT COMPANIES IN THESE INDUSTRIES USE.
 PURPOSE OF ITT

TO BID FOR A CONTRACT FOR GOODS AND SERVICES.

TO GARNER INTEREST AMONGST AND EVENTUALLY CHOOSE THE VENDORS WHO WILL
WORK ON THEIR PROJECTS.
SHOW THE INTEREST TO CONSTRUCT THE PROJECT.
 1. TO BID FOR A CONTRACT FOR GOODS AND SERVICES.
TO HELP THE BUYERS GET THE BEST PRICE AND CONTRACT TERMS FOR THEIR PROPOSAL.
DO HAVE BENEFITS AND ADVANTAGES FOR BOTH PARTIES, CLIENT AND BIDDERS.

BUYERS
ALLOWS THEM TO GET THE MOST QUALIFIED SELLERS OF PRODUCTS AND SERVICES
WHILE KEEPING THE COSTS MINIMALLY.
WORK WITH SELLERS WITH A GOOD HISTORY AND THAT IS QUALIFIED TO DELIVER
SPECIALIZED SERVICES.

BIDDERS
BIDDING ALLOW SELLERS TO EXECUTE PROPOSALS THEY ARE FAMILIAR WITH AND AT A
RATE THAT THEY DETERMINE.
ALLOWS THEM TO SAVE ON COSTS THAT THEY COULD HAVE USED TO FIND POTENTIAL
BUYERS FOR THEIR PRODUCTS OR SERVICES.
2. TO GARNER INTEREST AMONGST AND EVENTUALLY CHOOSE THE VENDORS WHO WILL
WORK ON THEIR PROJECTS.
ITT LETTER IS ONE OF THE FIRST STEPS IN THIS 'BUYING' PROCESS AND IS OFTEN THE
MOST EXCITING FOR THE COMPANIES PROVIDING THEIR GOODS AND SERVICES.
ENABLES TO INCLUDE AND PACKAGE OF MORE INFORMATION.
 THE GOAL OF THE INVITATION TO TENDER

TO GET A RESPONSE AND EVENTUALLY SUITABLE PROJECT QUOTES FROM SUITABLE

PROJECT QUOTES FROM SUITABLE VENDORS, THE MORE CLEAR AND TRANSPARENT YOU
CAN BE ABOUT THE COMPANY AND PROJECT, THE MORE LIKELY YOU ARE TO GET THE
VENDORS AND END PRODUCT THAT YOU DESIRE.
THE A D VA NT AG E S
OF INV IT AT IO N TO
TE N DE R
 TRANSPARENCY

DEPENDING ON THE NATURE OF THE ORGANIZATION OR THE IMAGE IT WOULD LIKE TO

PORTRAY TO THE PUBLIC, BEING TRANSPARENT WHEN DEALING WITH SUPPLIERS HELPS
CREATE GOODWILL AND TENDERS DO THAT BECAUSE ALL COMPETENT SUPPLIERS ARE GIVEN
AN EQUAL PLATFORM ON WHICH TO COMPETE IN SUPPLYING GOODS OR SERVICES TO THE
ORGANIZATION.

BOTH PARTIES BENEFIT

THE ONE THING YOU HAVE TO UNDERSTAND ABOUT CONTRACTS IS THAT ALL CONTRACTS
HAVE A PRICE. THE PRICE YOU PAY WILL MOSTLY DEPEND ON THE RISKS YOU ARE TALKING
OR HOW YOU NEGOTIATED THE DEAL AND THE LAW DOESN’T CARE ABOUT WHAT YOU PAY
AS LONG AS YOU PAY AND ARE OK WITH IT. TENDER MEANS AS A BUYER YOU ARE GETTING
VALUE FOR YOUR MONEY AND AS A SUPPLIER YOU ARE BEING PAID BECAUSE YOUR BID
WAS THE BEST, HENCE BOTH PARTIES BENEFIT.
 ENCOURAGES OF COMPETITION

COMPETITION IS NOT ALWAYS A BAD IDEA IF IT IS HEALTHY. WITH TENDERS THE SUPPLIERS
KNOW THAT THEY HAVE TO BRING THEIR BEST OTHERWISE THEY WILL NOT BE AWARDED A
CONTRACT. THIS IN TURN MEANS THE CLIENT ORGANIZATION IS GUARANTEED OF THE BEST
RESULTS.

ITS ALLOWS FOR AN AUDIT TRAIL

IN CASE OF ANY ISSUES TO DO WITH FINANCIAL RESOURCES THERE IS A “PAPER TRAIL”

THAT EXPLAINS WHAT WAS SPENT ON WHAT AND WHY AS WELL AS WHO AUTHORIZED IT.
THIS HELPS WITH ACCOUNTABILITY IN PROCUREMENT.
 THE
DISAD VA NT AG ES OF
INVIT AT IO N T O
TENDER
 USE OF LOW-COST, LOW-QUALITY MATERIALS OR LABOR

THE CONTRACTOR WHO IS COMPELLED TO PLAY THE COMPETITIVE BIDDING PROCESS MAY
FEEL PRESSURED TO KEEP COSTS LOW TO MAINTAIN A REASONABLE PROFIT MARGIN. USING
CHEAPER LABOR AND MATERIALS IS ONE METHOD CONTRACTOR MIGHT CUT THE COSTS. IF
THE CHEAPER LABOR AND MATERIALS ARE OF POOR QUALITY, THE CLIENT WILL LIKELY
RECEIVE INFERIOR GOODS OR SERVICES.

SHORTCUTS FOR SAFETY

SAFETY REQUIREMENTS ARE ANOTHER AREA WHERE CONTRACTORS MAY BE MOTIVATED TO

CUT THE COSTS. A CONTRACT'S SAFETY COSTS ARE A DEFINITE METHOD TO KEEP THE
BIDDING PRICE LOW.
 COMPETITIVE BIDDING CAN BE EXCEEDINGLY TIME-CONSUMING

WHEN THE GOVERNMENT, AS WELL AS PRIVATE FIRMS, USE COMPETITIVE BIDDING, THE
AWARDING OF THE BID CAN TAKE A TIME TO DECIDE. AS A RESULT, CUSTOMERS MAY HAVE
TO WAIT FOR EXTREMELY LONG PERIODS OF TIME.

INSUFFICIENT PROFIT MARGIN TO ALLOW FOR RESEARCH AND DEVELOPMENT (R&D),

MODERN TECHNOLOGY, OR EQUIPMENT INVESTMENT

COMPETITIVE BIDDING MAY COMPEL A CONTRACTOR TO ACCEPT A RELATIVELY SMALL

PROFIT MARGIN, BECAUSE OF THESE POOR MARGINS, A CONTRACTOR MAY HAVE LITTLE OR
NO MONEY TO SPEND ON R&D, NEW TECHNOLOGY, AND EQUIPMENT.
IM P O RT A NC E O F
IN VIT AT IO N TO
TENDE R (IT T )
 1 2 3
AIDS THE BUYER IN
ALLOW ALL THE BIDS LIMITING THE HELPS TO PROVIDE
HAS THE SAME AVAILABLE VENDORS BUYERS MORE
INFORMATION. FOR A INFORMATION
CONSTRUCTION
PROJECT.
1. ALLOW ALL THE BIDS HAS THE SAME INFORMATION
CAN PROMOTE A TRULY COMPETITIVE AND FAIR PROCESS AMONG BIDDERS.
MAINTAIN THE TRANSPARENCY, CONTRACTORS WILL SUBMIT THEIR QUOTES IN A
SEALED ENVELOPES THAT ARE RHEN PUBLICLY UNSEALED.
THERE WILL BE NO DISSCUSS ABOUT PRICING OR SERVICES, THEN EVENTUALLY THE
WINNER BIDDER WILL RECEIVE THE CONTRACT.

2. AIDS THE BUYER IN LIMITING THE AVAILABLE VENDORS FOR A CONSTRUCTION PROJECT.
INVITATION TO TENDER CLARIFIES THE REQUIREMENTS AND INTENDED OUTCOME OF A
CONSTRUCTION PROJECT WHICH CAN HELP TO ACCELERATES THE BIDDING PROCESS.
REDUCE THE POOL OF POTENTIAL SUPPLIERS BY SENDING THE INVITATION TO TENDER
TO THE CHOSEN COMPANIES THAT FARED WELL IN THE FIRST ROUND.
3. HELPS TO PROVIDE BUYERS MORE INFORMATION.
CREATE A CONVINCING BID SUBMISSION, THROUGHLY ADDRESS THEIR INQUIRIES, AND
DEMONSTRATE THE CAPABILITIES OF EACH COMPANY.
ORGANIZATIONS OR BUYERS WILL NOT SIMPLY INVITE TENDERES INSSTEAD THEY WILL
WORK ON A DETAILED PROCESS THAT SHOW HOW SUPPLIERS WILL BE ASSESSED, WHO
WILL BE IN CHARGE OD EACH WORKS AND HOW TO OUTCOME ANY PROBLEM.
EVERYONE WILL BE MORE AWARE AND UNDERSTANDS THE PROCEDURE.
CONCLUSION
AN INVITATION TO TENDER (ITT) IS A FORMAL PROCUREMENT DOCUMENT THAT INVITES
SUPPLIERS TO BID FOR THE CONTRACT OF WORKS THEY ARE LOOKING TO FULLFILL.
CAN BE ISUUED ACROSS A RANGE OF SECTORS AS BUYERS LOOK TO FIND SUPPLIERS FOR
SPECIFIC SPECIALISM.
IN ADDITION TO HAVING A CLEAN, COMPREHENSIVE AND UNDERSTANDABLE LETTER
FORMAT OR DOCUMENT ON WHICH TO BASE THE INVITATION TO TENDER , YU ALSO
WANT TO ENSURE THAT THE ENTIRE PROCESS RUN SMOOTHLY.
STARTS THE PROJECT WITH STRONG AND PROFESSIONAL INVITATION TO TENDER
LETTER. WHAT APPEARS TO BE A MINOR ASPECT OF PROJECT MANAGEMENT CAN HAVE
RAMIFICATIONS FOR ALL PROJECT COMMUNICATIONS AND OUTCOMES.
 references
Executive Compass. (2019, March 23). Invitation to Tender (ITT) Executive Compass.
Executive Compass. https://www.executivecompass.co.uk/blog/bid-
management/invitation-to-tender/
‌Ackah, D. D., Agboyi, M. R., & Gyamfi, L. A. (2014). Competitive tendering. An effective tool in
ensuring value for money in public sector. In www.grin.com.
https://www.grin.com/document/283466#:~:text=Some%20benefits%20of%20using%20t
his
‌Tender Invitation Letter | A Guide to the ITTs | Hudson Succeed. (2019, June 5). Tender
Consultants. https://www.tenderconsultants.co.uk/tender-invitation-letter/
‌DQS 259 NOTES.
Invitation to tender for construction contracts. (n.d.). Www.designingbuildings.co.uk. Retrieved
February 6, 2023, from
https://www.designingbuildings.co.uk/wiki/Invitation_to_tender_for_construction_contracts
#What_is_an_invitation_to_tender.3F