In B2B ( Business to Business ) and B2G ( Business to Government ) procurement through reverse auction or tender release is common. The suppliers respond to tenders in a form of bidding. The bidding process usually involves technical and financial bidding. The technical bidding usually comes first and then the financial bidding is considered. Both have equal or different weightage in the selection of the vendor by the buyer. For a supplier or a seller it is utmost important to understand both these concepts so that they can well position themselves when a tender is released.

Technical bidding is that round of bidding in which the supplier or seller proposes how they are going to solve the problem, their processes, equipment used, timelines and deliverables. While financial bidding is another round of bidding in which the supplier proposes a price at which they will be able to fulfill the order. The proposal aspect of technical bidding differs industry to industry and product to product. The financial bidding needs to address all the break downs of the overheads proposed in the technical bidding

Let’s understand the financial and technical bidding processes so that you can position yourself best in front of the bidder. We’ll go through the entire process of tendering from the perspective of a supplier. The process is divided into stages that also include technical and financial bidding.

Stages of Tendering

Stage 1, The pre-qualification stage

In this stage the buyers examine the suppliers who have applied for the tender. It is a process to reduce the number of bidders to only those who are eligible to bid for the tender. It is a kind of pre-screening.

The participants are usually evaluated on the criterias such as technical expertise, number of qualified staff, past experience, certifications and financial proof. It is also common to verify pre-approved bank guarantees before they go on to the next stage of technical bidding. The verification of their financial health also makes them eligible for financial bidding.

Stage 2, Bidding

Once the qualified set of participants are filtered from the lot of suppliers, they are notified to submit their proposal for technical bidding. In this stage, as per the problem or requirement explained in the tender document, the suppliers are expected to submit a proposal explaining the solution or the path of fulfilling the requirements. It includes but not limited to frameworks, milestones, tools and resources, and timelines.

The buyer then evaluates all the responses in the technical bidding stage. Different tenders have different methods of evaluation, in single stage tenders both are examined simultaneously, whereas, in two stage tenders, technical bidding is evaluated first.
The proposals that seem to solve the problem or requirement in the most efficient and effective manner are allowed to participate in the next stage. This further narrows down the number of participants participating in the financial bidding.

Stage 3, Financial bidding

It is a precursor to the final stages of getting a contract from the buyer. This stage is about the price at which you’re willing to provide your goods/services/ proposed solution. It is essential to consider the budget mentioned in the tender document. In most government tenders the lowest bidders win.

Stage 4, Negotiation

This is an optional stage, you might get this stage in private tenders because in government tenders the winner is decided at the financial bidding stage. If you’re applying to private tenders, the buyers might negotiate on deliverables, timelines, cost, maintenance, upgradation, installation, financing etc.

Stage 5, Contracting

This is the final stage in which a contract is signed with the supplier. It happens in both private and government tenders. Teams from both the parties are involved and the contract is commenced. This means that the supplier now has to supply the goods and services as proposed in the financial and technical bidding stage.

Tips for Financial and Technical Bidding

  • Understanding the requirement: It is paramount to go through the requirements detailed in the tender document. It is highly recommended to have multiple rounds of discussions over the document to understand the requirements and its inception. It equips the supplier with a holistic view which will help them in the technical bidding.
  • Preparing documentation accurately: It is very common to get rejected due to incomplete documentations or failing to communicate features of your solution. The industry standard and the formats accepted by the concerned authority have to be considered.
  • Providing quality: The focus on quality yields returns. The better the quality of services provided to the buyer, the better the chances of gaining word of mouth recommendation and preference in future opportunities.

Some Common Mistakes in Financial and Technical Bidding

  • Overlooking timelines: Many suppliers only focus on what they will deliver and forget when they will deliver. The timelines mentioned in the technical bidding have to match the budget and price proposed in the financial bidding. This mismatch could create issues at the negotiation stage.
  • Ignoring mandatory requirements: It is very common to miss eligibility criteria, signature pages, compliance checkboxes or annexures which are clearly mentioned in the tender. These small mistakes disqualify even the best of proposals.
  • Pricing without margin calculations: In the financial bidding stage, many suppliers quote too aggressively without considering margins, tax slabs, inflation, and logistics. If you’re selected and can’t deliver at that price, it puts both buyer and seller in an uncomfortable position. That’s why financial bidding needs to be both competitive and sustainable.
  • Missing supporting documents: During technical bidding, if any certifications, case studies, or licenses are asked for, attach them. Even if they are not mandatory, adding supporting documents builds confidence in your proposal.
  • Customizing proposal: A very common mistake is to copy-paste old technical and financial bidding documents. Each tender has a different scope. It is always better to write fresh, tailoring to the problem stated in the tender. It shows effort and relevance.

Also Read: Request for Quote: Definition and How Businesses Use RFQs

What Happens After Bidding?

Once you win the contract, the real work begins. Most tenders come with SLAs (Service Level Agreements) and penalty clauses. Failing to deliver on time, or compromising on specifications can result in penalties. On some occasions, the contract can be canceled. Hence, never overpromise in the bidding documents.

It is also important to set up a team internally to manage project execution, invoicing, delivery schedules and post-sale requirements.

Also Read: Comprehensive Guide on Reverse Auction in GeM procurement

Role of BidAssist in Financial and Technical bidding

Identifying relevant tenders is half the battle. Especially in government procurement, it’s time consuming to go through portals like CPPP, GeM, EProc, State tenders etc. BidAssist makes this part easier.

It curates tenders relevant to your product or service line and sends you alerts before deadlines. You can also access past awarded tenders, which helps in pricing your financial bids and writing better technical documents.

If you are new to the tendering process or unsure how to go about technical and financial bidding, BidAssist also has a support team that can guide you through the process.

Final Thoughts for Sellers

Technical and financial bidding is more than just paperwork. It is a strategic response to a buyer’s need. It needs attention to detail, planning, pricing skills, and clarity of communication. Winning tenders depends not only on the price but on how well you understand and present your capabilities.

For businesses looking to grow in B2B and B2G markets, participating in tenders is one of the most rewarding opportunities. Understanding the technical and financial bidding process is the first step in that journey.

So next time you see a tender, don’t hesitate. Read, prepare, propose and bid smartly.