What is a key reason for using tendering in procurement?

Using tendering in procurement primarily promotes competitiveness among suppliers, which is fundamental to achieving the best value for money. When suppliers know that their proposals will be subject to competitive evaluation, they are likely to offer their most favorable pricing and terms, as they want to secure the contract. This competition drives innovation, cost reduction, and improved service delivery, benefitting the organization that initiated the tendering process.

Additionally, tendering helps ensure transparency and fairness in the procurement process, which can lead to better supplier relationships and greater compliance with regulations. This formal process allows the procuring entity to evaluate various bids based on predetermined criteria, ensuring that the selection process is both equitable and efficient. In contrast, informal negotiations or direct contract methods can lack the rigor and credibility that competitive tendering brings.