Difference Between Quotation and Tender

Quotation implies a set price offer given to the customer as a response to the tender notice. It’s a legal binding, that once accepted by the client, can not be modified. It’s not specifically same as tender, that is a response to a request to tender, submitted by the prospective supplier.

An invitation to tender is associate degree open request for proposal publicised by an organisation within the local newspaper, to ask potential and interested suppliers to submit their bid for supplying goods or services. It’s issued for a number of contracts, like construction contract, supplying machinery, deliver some software system, etc. the complete method of inviting tender, submitting the tender and filling quotation is a part of tendering method.

Comparison Chart

Definition of Quotation

The quotation could also be understood as a proper document of promise, given by the prospective supplier, to supply the stated goods or services required by the customer at the stated price under specific conditions. It contains of terms of sale, payment and warranty, which incorporates the price determined to charge for the product or service, date, time and place of delivery, validity period of quotation.

Quotation helps the customer in knowing the value of products or services, before creating a buying deal. So as to get the quotations, generally, tenders are floated by the government enterprises.

Definition of Tender

Tender is nothing but a response to a request to offer to provide product or services at quoted costs and such as quality, however subject to specific conditions.

An invitation to tender is floated by the govt. undertaking, institution or a big corporation for various projects, after they wish to buy product on a large scale, rent services or acquire/construct something however they're not able to deliver it on their own. For this purpose, third party suppliers are invited to bid and submit tenders.

The tender document is sent to prospective suppliers, to solicit data, to pick the provider on the idea of price, delivery terms and convenience. The sellers who have an interest within the request for proposal will answer the request, within the deadline such as, by submitting their best offer in sealed covers, with the appropriate authority.

Tender is sort of a competition for a contract, where various prospective suppliers are requested to submit tenders, containing the value and quality of the material needed.

The invite is revealed in a vernacular newspaper of the involved state or country, because it is a necessary demand, to take care of transparency in their operations.

Key Differences Between Quotation and Tender

• The quotation is a fixed price offer,that once accepted by the client, can't be modified or changed. On the opposite extreme, the tender is a response to the invite to tender,that is employed to find out the simplest price for cash, from the prospective suppliers.
• Each quotation and tenders are offers. A quotation is a response to Request for Quotation (RFQ), whereas tender is employed in response to Request for Tender (RFT).
• The only major part of the quotation is that the price that explains the value of the contract, submitted by the supplier. As against, the tender has 2 main components, price and quality, whereby value determines the simplest value offered by the provider, that is compared with the other suppliers and quality determines the suppliers potential to deliver the products specific.
• The scope of tender is wider compared to tender, because the quotation is a part of the tender, that contains costs for material to be equipped.

Conclusion

The government agencies or the companies choose the tenders or quotations, that meets their wants, within the best manner and provide value for money. So as to keep up transparency, fairness and openness in operations of the govt, tenders are floated by the public bodies and companies.