The tendering process is a crucial method used by government agencies, public sector undertakings (PSUs), and private companies in India to procure goods, services, or execute projects. For contractors, suppliers, and service providers, winning tenders can mean long-term contracts, consistent work, and financial stability. However, navigating the complexities of how the tender process works requires a clear understanding of its steps, documentation, and best practices.
This guide breaks down the tendering process in India, explaining each step in detail and highlighting key strategies to improve success rates.
What is the Tendering Process?
The tendering process is a formal and structured procedure through which organizations invite bids from vendors, contractors, or service providers to execute a project or supply goods. The goal is to ensure transparency, fairness, and cost-effectiveness in procurement.
In India, tenders are commonly used in government contracts, infrastructure projects, and large-scale corporate procurement. The process follows strict guidelines set by agencies like the Central Public Procurement Portal (CPPP) and state procurement departments to prevent favoritism and corruption.
There are two primary types of tenders in India:
- Open Tenders – Available to all eligible bidders. These are advertised publicly through newspapers, online portals, or government websites.
- Limited/Closed Tenders – Sent to a pre-approved list of vendors based on specific qualifications or past work experience.
Other types include Single Tender (awarded to a specific vendor) and Two-Bid Systems (Technical + Financial evaluation separately).
How Does the Tender Process Work in India?
The tendering process follows a series of well-defined steps. Each stage is designed to ensure that the most qualified bidder is selected while maintaining transparency and fairness.
1. Tender Notice & Invitation for Bids
Organizations publish a tender notice on official portals such as:
- Government e-Marketplace (GeM)
- Central Public Procurement Portal (eProcurement System of India)
- State government websites and PSU portals
The notice contains key details, including the scope of work, eligibility criteria, estimated budget, bid submission deadlines, and payment terms. Interested bidders must review the notice carefully to determine if they meet the requirements.
2. Bid Preparation & Document Submission
Bidders must prepare their proposal according to the instructions in the tender document. The bid typically includes:
- Technical Proposal – Company profile, experience, compliance certificates, work methodology, manpower details.
- Financial Proposal – Pricing details, payment terms, and cost breakdown.
Additionally, Indian tenders often require specific documents such as:
- Earnest Money Deposit (EMD) – A security deposit ensuring genuine participation.
- GST Registration Certificate – Mandatory for businesses.
- Work Completion Certificates – Proof of past project experience.
- Turnover and Financial Statements – To verify financial stability.
Tenders are submitted online (through eProcurement portals) or physically, depending on the issuing authority.
3. Tender Evaluation & Shortlisting
Once bids are received, a Tender Evaluation Committee reviews them based on pre-defined criteria. The evaluation follows two stages:
- Technical Evaluation – Ensures the bidder meets all qualifications and project requirements.
- Financial Evaluation – Compares price quotes to select the most cost-effective offer.
Government tenders often follow a Lowest Bidder (L1) method, where the contract is awarded to the lowest-priced eligible bid. However, in cases where quality matters more than cost, authorities use the QCBS (Quality and Cost-Based Selection) method, which assigns weightage to both technical and financial scores.
4. Award of Contract & Agreement Signing
Once the evaluation is complete, the winning bidder receives a Letter of Intent (LOI) or Work Order, confirming contract award. The bidder must then submit:
- Performance Bank Guarantee (PBG) – A security deposit ensuring project completion.
- Signed Agreement – Outlining project terms, deliverables, penalties, and timelines.
For government tenders, the process is strictly regulated under the General Financial Rules (GFR) and Public Procurement Policy, ensuring fairness in contract allocation.
5. Project Execution & Compliance
After securing the contract, the winning bidder begins project execution as per the agreed terms. Regular progress reports and compliance checks are required to ensure adherence to timelines and quality standards.
For large-scale government projects, authorities may conduct site inspections, financial audits, and milestone-based reviews before processing payments.
6. Payment & Project Closure
Upon successful completion, the contractor submits invoices for payment. In government projects, payments follow a structured approval process, which may take weeks or months, depending on the department’s financial workflows.
Post-completion, the Performance Bank Guarantee is refunded if the project meets all contractual obligations. Any disputes over payments, delays, or quality issues are resolved through arbitration or legal proceedings.
Best Practices for Winning Tenders in India
Winning a tender is highly competitive, especially in government projects where multiple bidders participate. Here are key strategies to improve success rates:
1. Read the Tender Document Carefully
Many bidders lose opportunities due to non-compliance with eligibility criteria. Ensure that you meet all requirements and understand the financial and technical obligations before applying.
2. Maintain an Up-to-Date Vendor Profile
Government agencies and large corporations often maintain a list of pre-approved vendors. Registering on platforms like GeM, eProcurement portals, and PSU vendor databases increases visibility and eligibility for future tenders.
3. Competitive Pricing Strategy
While L1 (Lowest Bidder) selection is common, bidding too low can impact profitability. Study competitor pricing, raw material costs, and operational expenses before submitting financial bids.
4. Strong Documentation & Compliance
Ensure all required licenses, tax certificates, and financial statements are updated. Many tenders get rejected due to missing or incorrect documentation.
5. Improve Past Performance & References
Government tenders often require past work experience. Completing smaller projects successfully builds credibility, increasing the chances of securing larger contracts in the future.
6. Use eProcurement Platforms Efficiently
Many tenders now follow an online submission process. Familiarize yourself with platforms like GeM, CPPP, and state eProcurement portals to avoid last-minute technical issues.
7. Ensure Timely Project Execution
Winning a tender is only the first step; ensuring timely completion is critical. Missing deadlines can lead to penalties, blacklisting, or loss of future contract opportunities.
Conclusion
The tendering process in India offers immense opportunities for contractors and suppliers to secure government and private sector projects. However, understanding how the tender process works and following best practices is crucial for success.
With increasing digitalization, eProcurement platforms have made tendering more transparent and accessible. Companies that stay updated on procurement regulations, improve their bidding strategies, and maintain compliance with tender requirements will have a competitive advantage.
For businesses looking to expand, participating in tenders is not just about securing a single project, it’s about building long-term credibility and a strong market presence in the industry.