Quotation vs. Tender: What's the Difference?
Edited by Janet White || By Harlon Moss || Updated on October 12, 2023
Quotation provides specific price for a specific job, while tender is a bid submitted by businesses to win a contract.
Key Differences
In the sphere of business transactions, a quotation embodies a seller’s statement of cost terms for a specific job or service. It delineates a detailed breakdown, offering insight into what a customer can expect in terms of cost for a particular job. Tender, on the other hand, is a structured proposal put forth by potential suppliers to buyers, which is primarily utilized in business-to-business transactions.
Quotations, typically, are unsolicited and can be offered to any client or customer who is exploring options for a particular job or purchase. The tender process is generally initiated by the buyer, where an invitation is disseminated to suppliers to submit their bids under specified terms and conditions. It's more formal and follows specific procedures.
In practical scenarios, quotations are customarily employed for smaller jobs, or in scenarios where the work specifics are well-understood by all parties. This is in contrast to tenders, which are typically oriented towards larger projects and contracts, often where there may be a higher level of complexity or variation in potential approaches.
When it comes to the legal implications, quotations, once accepted, often become binding contracts unless otherwise specified. Tenders, given their formal and larger-scale nature, undergo a rigorous evaluation process, with contracts being awarded after detailed scrutiny and comparisons of all received bids.
Essentially, quotations offer a snapshot into the potential financial scope of a job, providing a predefined cost and usually scope. Tenders, however, extend beyond cost implications to engage suppliers in a competitive process, which can influence contract awards not merely by cost but also capacity, capability, reputation, and adherence to compliance and quality.
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Comparison Chart
Nature
Generally informal and can be unsolicited.
Formal, often following specific procedures.
Usage
Used for smaller, clearly-defined jobs.
Employed for larger projects and contracts.
Origination
Can be given by a seller without request.
Usually initiated by a buyer’s request.
Legal Implications
Can become binding once accepted.
Entails a detailed evaluation before awarding.
Scale and Complexity
Typically simpler and more straightforward.
Can be intricate and vast in scope.
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Quotation and Tender Definitions
Quotation
A quotation is a fixed price offer.
The mechanic provided a quotation for the car repair.
Tender
Tender involves a bidding process among various competitors.
Numerous suppliers presented their tender to secure the school’s uniform contract.
Quotation
A quotation is generally not legally binding.
The customer decided to decline the quotation provided by the plumber.
Tender
A tender is a formal offer to perform work for a specified price.
The construction company submitted a tender for the new bridge project.
Quotation
Quotations are typically used for smaller jobs.
She requested a quotation for the cost of painting her room.
Tender
Tenders can be open (public) or closed (private).
The state issued an open tender for the construction of the new hospital.
Quotation
A quotation outlines the price for a specified service or item.
The builder gave them a quotation that outlined the cost of the new kitchen.
Tender
A tender usually pertains to large-scale projects.
The government issued a tender for the development of a new highway.
Quotation
Quotations can be verbal or written.
The verbal quotation given by the florist was reasonable and affordable.
Tender
Tender documentation outlines the terms and conditions of the bid.
The contractor carefully reviewed the tender documentation before submitting a bid.
Quotation
The act of quoting.
Tender
Easily crushed or bruised; fragile
A tender petal.
Quotation
A passage quoted.
FAQs
Is a quotation legally binding?
A quotation can become legally binding once accepted, depending on jurisdiction and specific terms.
Can a quotation be revised?
Yes, quotations can be revised with the consent of both parties involved.
Can a quotation be issued without a request?
Yes, quotations can be unsolicited and issued without a formal request.
What is a tender?
A tender is a formal proposal submitted by businesses to provide goods or services at a specified price.
Are tenders legally binding?
Once accepted, tenders can become legally binding contracts, but not the submission itself.
Can anyone respond to a tender?
Depending on the type, open tenders allow any organization to bid, while closed tenders are by invitation.
Is it mandatory to respond to every quotation request?
No, businesses can choose which quotation requests they wish to respond to.
How is a tender different from a quotation?
Tenders generally pertain to larger projects and involve a formal bidding process, unlike quotations.
What is the primary purpose of a quotation?
The primary purpose is to inform a potential buyer of the cost of goods or services.
Can a quotation be submitted for large projects?
Yes, but quotations are generally used for smaller projects with clear requirements.
Can multiple businesses win a tender?
Depending on the project, a tender might be awarded to multiple vendors for different components.
What is a quotation?
A quotation is a fixed price offer extended by a seller to a buyer for specific goods or services.
Can a tender be withdrawn?
Yes, tenders can usually be withdrawn before the expiration of the validity period.
How is the winner of a tender determined?
The winner is determined after evaluating bids based on price, quality, and capability, among other criteria.
What documents are typically included in a tender?
Tender documents might include an invitation to tender, pricing document, terms and conditions, and specifications.
What is a tender notice?
A tender notice is a public announcement inviting suppliers to bid on a project.
How long is a quotation valid?
Validity depends on the issuer's discretion and should be stated on the document.
What happens if no bids meet the tender criteria?
The tender may be re-evaluated, altered, or reissued to attract suitable bids.
Is a tender always related to construction projects?
No, tenders can be related to various fields, like supply, services, maintenance, etc.
What information is included in a quotation?
A quotation usually includes the price, quantity, timeframe, and terms and conditions.
About Author
Written by
Harlon MossHarlon is a seasoned quality moderator and accomplished content writer for Difference Wiki. An alumnus of the prestigious University of California, he earned his degree in Computer Science. Leveraging his academic background, Harlon brings a meticulous and informed perspective to his work, ensuring content accuracy and excellence.
Edited by
Janet WhiteJanet White has been an esteemed writer and blogger for Difference Wiki. Holding a Master's degree in Science and Medical Journalism from the prestigious Boston University, she has consistently demonstrated her expertise and passion for her field. When she's not immersed in her work, Janet relishes her time exercising, delving into a good book, and cherishing moments with friends and family.
