What is the Difference Between Tender and Quotation?

The main difference between a tender and a quotation lies in their purpose, structure, and the way they are presented. Here are the key differences between the two:

1. Purpose: A tender is a process of soliciting suppliers to bid on goods or services needed by a buyer, while a quotation is a fixed price offer given by a prospective supplier in response to a request for quotation (RFQ).
2. Structure: Tenders are more formal and comprehensive, including both price and quality, while quotations are more focused on the price of the product or service. Quotations typically include terms of sale, payment, warranty, price to charge for the product/service, date, time, delivery location, and validity period.
3. Submission: Tenders are submitted by prospective suppliers in response to an invitation to tender, which is published in various media, including printed media, online platforms, and government websites. Quotations, on the other hand, are usually requested by the buyer and are submitted by the supplier after a request for quotation has been made.
4. Binding Nature: A quotation is a legally binding offer that cannot be modified or changed once accepted by the customer. A tender, however, is a response to an invitation to tender, which aims to find the best value for money, and it may be subject to changes depending on the negotiation between the buyer and the supplier.

In summary, a tender is a more formal and comprehensive process for soliciting bids from suppliers, while a quotation is a fixed price offer given by a supplier in response to a request for quotation. Tenders are typically more complex and may involve negotiations, whereas quotations are legally binding and focused on the price of the product or service.

Comparative Table: Tender vs Quotation

Here is a table summarizing the differences between a tender and a quotation:

In summary, a quotation is a fixed price offer in response to a Request for Quotation (RFQ), while a tender is a response to a Request for Tender (RFT) that assesses both price and quality standards to find the best value for money from prospective suppliers.