What the heck is the difference between a tender and a proposal?

The jargon used when responding to clients’ requirements can be mind-boggling.

“Proposals”, “tenders” and all the other related terminology are often used interchangeably by buyers and vendors alike. And yet, it’s important to understand the difference so you’re well-equipped to respond to exactly what the buyer wants, even if they can’t define it themselves.

Both tenders and proposals are highly tailored to the buyer’s needs. Both can be open, where anyone can apply, or by invitation only, where only vendors invited or those sitting on a panel can respond. Both often involve the input of staff sitting across the breadth of the vendor organisation(s).

A tender is a formal offer to supply goods and/or services in return for payment. A request for tender (RFT) is often issued by the government sector or the construction industry. Tender responses for the same goods and services are submitted by multiple vendors and evaluated against the buyer’s mandatory selection criteria.

The buyer knows in detail what they want, and their RFT outlines the specifics for performing the work, plus the qualifications and requirements the vendor must meet.

A request for quotation (RFQ) is smaller in size and scope than an RFT and is used by buyers seeking pricing information for a defined piece of work or supply of materials.

The terms and conditions for both RFTs and RFQs are well laid out.

A proposal is less specific than a tender. The buyer hasn’t defined the scope of work in detail. They define what they want to achieve in a request for proposal (RFP) but are relying on the expertise, creativity and innovation of the vendor. The vendor proposes a way of achieving the buyer’s desired outcome.

A proposal identifies the problem or business opportunity, defines the solution and how it will work (methodology and project plan), pricing, organisation details and credentials.

A buyer issues a request for information (RFI) when they think they know what they want, but need more information from vendors. An RFI will often be followed by an RFP or RFT.

The person writing the proposal or tender response will pull together pre-existing information and also create custom content tailored to the buyer’s needs. Whether to call yourself a proposal or tender writer will depend on the type of response documents you generally write. Again, this terminology is often used interchangeably. I’m still unsure what to call myself as I work on all types of responses. Bid writer, proposal writer, tender writer? Comment below if you have a suggestion.