Brief Overview of Tenders in the Chemical Industry | Camachem Tendering Process
What is a Tender?
A tender is a formal process where an organization invites suppliers to submit offers to fulfill a specific need. It's a competitive system where the “best offer” typically wins. In many cases, “best offer” simply means the lowest prices all other factors equal.
Large Quantity of Chemicals in Storage in Camachem Warehouse
What are the Two Main Types of Tenders?
There are two main types of tenders:
1. Public Tenders
- Public tenders are typically issued by governments, local authorities or entities of the state.
2. Private Tenders
- Private tenders are issued by private companies or organizations not related to the state/government/local authorities
What are the other types of tenders in the Chemical industry?
There are two further breakdowns in types of tenders:
1. Open Tenders
- Open tenders are accessible to all interested parties and are usulaly advertised on public platforms. The idea is to increase the amount of competition and “fairness” of the bid
2. Selective Tenders
- Selective tenders invite bids only from a pre-chosen list of potential suppliers based on specific criteria. This reduces the number of unqualified participants, while maintaining a semblance of competition
Caustic Soda Pearls in Tianjin Awaiting Export
Are there other types of tenders in the Chemical Industry?
Yes there are single stage, two-stage and multi-stage tenders.
1. Single-stage tenders
- These involve submitting technical and financial details together. There is only 1 round in the bid
2. Two-stage tenders
- Two stage tenders include a first stage of shortlisting usually based on technical details. The second stage focuses on the commercial offer of the bids and then selects a winner
3. Multi-stage tenders
- Multi-stage tenders include a third and some forth or more stages. Each time the number of participants is eliminated based on a set criteria until a winner is selected
Caustic Soda Packed in Drums Not Bags, Tenders MUST specify packaging requirements
What's the general process of a tender in the chemical industry?
The tender process in the chemical industry usually involves:
- Issuing the tender
- Preparation and submission of bids
- Evaluation of submitted bids
- Selection of the best bid
- Awarding the contract
How are tenders in the chemical industry typically evaluated?
Evaluation criteria usually include technical aspects, commercial offer, and compliance with the tender's terms and conditions. Whereas each tender is different, the technical is evaluated first and then commercial section
A typical COA from Camachem. Tenders must provide clear specifications and elements required
Does Camachem Participate in Tenders?
We do not participate in public tenders for a few reasons I will outline:
1. Specifications are usually already set between project supplier and owner
- There is typically no room for altering specifications even when it could be beneficial for the end user!
2. Payment terms are usually not flexible and our payment terms are generally fixed on a TT basis
- Tenders, particularly public tenders usually require the supplier to be paid after delivery. This poses a significant risk to the supplier even in the event that the chemicals are delivered with no problem.
3. The winner is usually the lowest cost, whereas we value quality over lowest price
- The whole theory of tendering is that comparing ‘like to like’ the project owner will simply select the lowest cost.
- This does not take into issue outlined in section 1 above, it does not account for service delivery and worst of all it assumes that one can always compare “like to like” without going through testing process and deep discussion directly between supplier and project owner
We aim to help our customers get the right chemicals at the right grade, quality first.
How Camachem Can Help You Get the Right Chemicals?
● Are you a company of 11 - 50?
● Do you use more than 1000 tons/year of industrial chemicals in your production?
● Do you spend too much time finding the right chemical manufacturers?
● Are you unsure of whether you will get the right grade of chemical?
● If your answer is YES, Camachem is here to help!
Send me an email at [email protected]