What Does it Mean to Tender a Contract?

To tender a contract means to present to another person or a company an offer of money for a service, according to West's Encyclopedia of American Law. Tendering a contract is a common legal process for bigger projects -- those in which a business offers to supply goods, perform a job or buy another business. A tender contract can be for a company, but it is most commonly used to do business in the public sector.

Tendering a contract is a formal process. Usually a request for tender is prepared by the organization looking for services. The request for tender is a formal document that outlines the services the organization needs, the goals for the project and the experience the servicer needs. The organization will usually have a quote and timeline in mind for the services it wants, but will not share them with contractors they may hire. Instead, it invites the contractors to determine the price and timeline for services.

The tender contract is a proposal or formal quote a business presents to an organization. Usually there is more than one proposal for a tender contract. In this case, the organization will have to decide among many offers, also called bids. In most cases, a public organization works under a specific budget and has a certain set of goals in mind for the project. The tender contract should be tailored specifically to the organization's goals and prove why it is the best value.

Certain criteria should always be included in the tender contract. The first is a bid purpose -- or the reason a contractor wants to take on the job and how he expects to fulfill the client's needs. A contractor should also include his qualifications and how he intends to manage the project. This should include a timeline of how the services will be provided. Lastly the contractor should break down all of the cost for the services and explain what makes the services he is offering the best value.

Once all of the bids for the contract are in, the organization chooses the bid it believes is the best offer. The organization notifies the contractor with the winning bid as well as those whose bids were unsuccessful. Formal documents for the contract are drawn to ensure that the contractor will complete the job as specified in his offer.