Difference between Quotation and Tender

In business, when you want to buy something or hire someone to do a job, you usually ask for a price. That’s where quotations and tenders come in. A quotation is like asking a store how much something costs, while a tender is more like asking different companies to give you their best price for a big project. It’s important to know the difference between these two because it helps you know how to buy things or hire services in the best possible way for your needs and budget.

What is Quotation?

In the context of finance and investing, a quotation refers to the current price at which a security, such as a stock, bond, commodity, or currency, is trading in the market. Quotations provide investors and traders with essential information about the price and trading activity of securities, allowing them to make informed decisions about buying, selling, or holding investments. Quotations are widely available through financial news websites, trading platforms, brokerage firms, and financial data providers. They are crucial for investors and traders to monitor market activity, track price movements, and execute investment decisions effectively.

Key Features of Quotation:

• Price: The price quoted represents the current market price at which the security is trading.
• Volume: Quotations typically include information about the trading volume, which represents the total number of shares or units of the security that have been traded during a specific period, such as the current trading day.
• Timestamp: The timestamp indicates the time at which the quotation was last updated. This information is essential for investors to gauge the currency and recency of the quotation.

What is Tender?

A tender refers to a formal request for bids or proposals from potential suppliers or contractors to provide goods or services at a specified price. When a company or organization requires certain goods or services, they may issue a tender document that outlines the requirements, specifications, terms, and conditions of the procurement process. Potential suppliers or contractors then submit their bids or proposals in response to the tender.

Key Features of Tender:

• Project Description: This is where the person or organization needing the work done explains exactly what they need. It includes details like what needs to be done, when it needs to be finished, and any special requirements.
• Requirements and Specifications: These are the specific rules and standards that companies must follow when submitting their offers. It could include things like quality standards, materials to be used, or specific skills required.
• Submission Process: This outlines how companies should submit their offers or bids. It includes details like the deadline for submitting bids, the format for proposals, and any documents that need to be included.

Difference Between Quotation and Tender

Basis	Quotation	Tender
Initiation	A quotation is provided by the seller in response to a buyer’s inquiry about the price of specific goods or services.	A tender is initiated by the buyer, who invites bids or proposals from potential sellers or contractors for a project or contract.
Scope	A quotation provides pricing details for the specific goods or services requested by the buyer.	A tender is a broader invitation for sellers or contractors to submit bids or proposals for a larger project or contract.
Legality	Quotations are typically non-binding unless stated otherwise in the document.	Tenders can have legal implications as they serve as the basis for contract negotiations and agreements.
Formality	Quotations are relatively informal documents provided by the seller to the buyer.	Tenders follow a structured process with formal documentation, including detailed project specifications and evaluation criteria.
Timeframe	Quotations typically have shorter response times, as they are quicker processes.	Tenders involve a longer process, with a specified bidding period during which sellers submit their proposals.
Competitive Nature	Quotations may or may not involve competition among sellers, depending on the buyer’s preferences.	Tenders are inherently competitive, as multiple sellers or contractors submit bids, and the buyer selects the best offer.

Conclusion

In conclusion, knowing the differences between quotations and tenders is important for buying and selling things. Quotations are like simple price offers for specific items or services, while tenders are formal requests for bids on bigger projects. Quotations are less formal and usually non-binding, while tenders are serious and can lead to legal agreements. Understanding these distinctions helps businesses make smarter decisions about purchases and contracts. By grasping how quotations and tenders work differently, companies can save time and money, and ensure they get the best deals for their needs.

Quotation and Tender – FAQs

What should I do if I receive a quotation that seems too high?

Answer: If you think a quotation is too expensive, you can try talking to the seller to see if they can lower the price. You can also compare prices from other sellers to find a better deal.

How do I submit a bid for a tender?

Answer: To submit a bid for a tender, carefully read the instructions provided by the buyer and follow them. Make sure you include all the required information and submit your bid before the deadline.

Can I change my quotation or bid after I’ve submitted it?

Answer: Usually, you can’t change your quotation or bid once you’ve sent it in. It’s important to check it carefully before you submit it to make sure everything is correct.

How long is a quotation valid for?

Answer: The validity period of a quotation depends on the seller’s rules and the type of transaction. Some quotations are valid for a certain time, like 30 days, while others don’t have a time limit.

What happens if my bid is selected in a tender?

Answer: If your bid is chosen, you’ll talk to the buyer to work out the final details of the contract. Once everything is agreed upon, you’ll sign a contract outlining the terms of the project or services.