There is often confusion in the industry about the differences between tendering and procurement. The terms are sometimes used interchangeably without thought given to their actual meaning. They are distinct activities in the construction process and it is necessary to properly understand them to be able to explain the differences.
• Procurement is the overall act of obtaining goods and services from external sources (i.e. a building contractor) and includes deciding the strategy on how those goods are to be acquired by reviewing the client’s requirements (i.e. time, quality and cost) and their attitude to risk.
• Tendering is an important phase in the procurement strategy but procurement involves much more than simply obtaining a price.
Tendering is:
• the bidding process, to obtain a price; and
• how a contractor is actually appointed.
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