Before knowing the difference between Tender and Quotation, we have to know the exact meaning of Tender and Quotation.
What is Tender?
Tender is the invitation presented by the owner to the contractor to perform specific work at a specific cost in the given time. After the tender is prepared, Tender notice is published in Newspapers, Television and other popular media.
Owner supplies the specially printed form of a tender at the usual cost. Such a tender contains the conditions of the contract and other related obligations.
What is a Quotation?
The quotation is a special document presented by the contractor to the owner that contains the details of the estimated materials, cost of the goods or services, the time required for the completion of the project and many other financial pieces of information.
Difference Between Tender and Quotation
|1||The formal process of asking suppliers to bid on the products and services by the owner is called Tender. ( Owner may be a person or company)||The response of bidders to the owner where they quote their prices for the goods and services. ( Bidders may be contractors or companies)|
|2||It is more Formal.||It is less formal.|
|3||It has a wide range of scope.||It has a narrow range of scope.|
|4||It is used for finding out the best price.||It is used for offering fixed price.|
|5||It is mainly associated with quality and price.||It is mainly associated with the only price.|
|6||It is a response to a request for tender.||It is a response to a request for quotation.|
Process to Understand
Tender and Quotation seems to be same but they are relatively different. Some of the full process to understand this is :
a. The owner prepares a Tender document according to the needs. The tender document contains the conditions of contract and other obligations.
b. After the completion of preparation of tender, the owner publishes the tender notice on newspapers, television or other media.
c. After seeing notice; contractor contacts with the owner and buy a copy of the tender document at the usual cost.
d. The contractor prepares the quotation that contains an estimation of materials, cost of goods or services and time required for the completion of the project.
e. Then the contractor submits the quotation to the owner.
f. The owner selects the contractor which will fulfil the requirement of the owner properly at low cost and short time.