Definitions and Meanings in Bidding and Tendering (Part Three)

open-procurement

In this third part, we will be looking at further terms and definitions used in Bidding and Tendering. They relate more to when a contractor has won or is about to win a Tender award.

 

Advance Payment
A payment to a supplier, contractor or services provider done prior to the commencement of the contract. It is requested by the selected bidder and needs a bank guarantee or bond. The amount is dependent on the agreement between the parties and/or any limitations set in the public procurement legal and regulatory framework.

Advance Payment Guarantee
A bond or bank guarantee the supplier, contractor or service provider is required to provider to the client as a security so that the client is able to recover the advance payment in the event of the bidder’s default.

Bid Bond
An obligation, usually assured by a bank or other third party, to release the bid security amount to the client if the selected bidder fails to sign the contract.

Bid Opening
The opening and public reading of all bids received, at a designated date and time stipulated in the solicitation documents. The bid opening event is a formal process where bidders are invited to attend, the bids prices are read out and bids are examined for compliance with the submission requirements of the solicitation documents.

Bid Security
A monetary assurance guaranteed by a bank or other third party that (i) if the bidder withdraws his bid prior to the end of the bid validity period or, (ii) refuses to sign the contract if selected, the bidder will automatically forfeit the bid security amount to the client. The bid security guarantee is determined and stipulated by the client, including the bank from which the bid security guarantee is issued.

Bid Validity
A certification from a bidder of the period of time their bid can be considered valid. After this period, the bidder is at liberty to change their bid price if the contract is not signed by the last date of the bid validity period.

Bid Validity Period.
The period within which a bidder’s offer is considered legally binding. After this period, the bidder is at liberty to change their bid if the contract has not been signed.

Bidding Documents
(same as Tender Documents and Solicitation Documents)
A set of documents issued by the procuring entity, inviting offers (bids, proposals or quotations) for the selection of suppliers, contractors or service providers to fulfill specific requirements.

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About Gbolagade O. Adebisi 1575 Articles
For over 25 years, (Gbola)’s focus has been on Government and Institutional Business. His involvement has ranged from the Federal, State and Local Governments as well as Donor – funded programmes and projects. [...]

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