Definition of Quotation

The quotation may be understood as a formal document of promise, given by the

prospective supplier, to supply the stated goods or services needed by the buyer at the
stated price under specific conditions. It comprises of terms of sale, payment and
warranty, which includes the price decided to charge for the product or service, date,
time and place of delivery, validity period of quotation.

Quotation helps the buyer in knowing the cost of goods or services, before making a
purchase. In order to obtain the quotations (i.e. price for the required material),
generally, tenders are floated by the government enterprises.

Definition of Tender

Tender is nothing but a response to an invitation to offer to provide product or

services at quoted prices and specified quality, but subject to specific conditions.

An invitation to tender is floated by the government undertaking, financial institution

or a big corporation for different projects, when they want to purchase goods on a
large scale, hire services or acquire/construct something but they are not able to
deliver it on their own. For this purpose, third party suppliers are invited to bid and
submit tenders.

The tender document is sent to prospective suppliers, to solicit information, to select

the supplier on the basis of price, delivery terms and availability. The sellers who are
interested in the request for proposal can respond to the request, within the deadline
specified, by submitting their best offer in sealed covers, with the appropriate
authority.

Tender is like a competition for a contract, where various prospective suppliers are
requested to submit tenders, containing the price and quality of the material required.

The invitation is published in a vernacular newspaper of the concerned state or

country, as it is a mandatory requirement, to maintain transparency in their operations.

Key Differences Between Quotation and Tender

The differences between quotation and tender are discussed in the points given below:

1. The quotation is a fixed price offer, which once accepted by the customer, cannot be
modified or changed. On the other extreme, the tender is a response to the invitation to
tender, which is used to find out the best value for money, from the prospective suppliers.
2. Both quotation and tenders are offers. A quotation is a response to Request for Quotation
(RFQ), whereas tender is used in response to Request for Tender (RFT).
3. The only major element of the quotation is the price which explains the cost of the contract,
submitted by the supplier. As against, the tender has two main elements, price and quality,
 wherein price determines the best price offered by the supplier, which is compared with the
other suppliers and quality determines the suppliers potential to deliver the goods specified.
4. The scope of tender is wider in comparison to tender, as the quotation is a part of the
tender, which contains prices for material to be supplied.

Key Differences Between Quotation and Tender

 The quotation is a fixed price offer,that once accepted by the client, can't be modified or
changed. On the opposite extreme, the tender is a response to the invite to tender,that is
employed to find out the simplest price for cash, from the prospective suppliers.
 Each quotation and tenders are offers. A quotation is a response to Request for Quotation (RFQ),
whereas tender is employed in response to Request for Tender (RFT).
 The only major part of the quotation is that the price that explains the value of the contract,
submitted by the supplier. As against, the tender has 2 main components, price and quality,
whereby value determines the simplest value offered by the provider, that is compared with the
other suppliers and quality determines the suppliers potential to deliver the products specific.
 The scope of tender is wider compared to tender, because the quotation is a part of the tender,
that contains costs for material to be equipped.

Conclusion

The government agencies or the corporations opt the tenders or quotations, that meets
their needs, in the best manner and provide value for money. In order to maintain
transparency, fairness and openness in operations of the government, tenders are
floated by the public bodies and corporations.