# Global Tender:

Global tendering is a process of inviting bids from suppliers or contractors

across the world for a specific project or requirement. The process involves
several steps that ensure transparency, fairness, and equal opportunity for
all bidders. The involvement of Incoterms and payment terms is crucial in
global tendering as it helps to define the responsibilities of the buyer and
seller and ensures that both parties are aware of the payment terms and
conditions.

The first step in global tendering is to prepare a detailed tender document

that includes all the specifications, requirements, and terms and conditions
related to the project. The document should clearly mention the Incoterms
that will be used for the shipment of goods and the payment terms that will
be followed. Incoterms are a set of standardized trade terms that define the
obligations, risks, and costs associated with the transportation and delivery
of goods between buyers and sellers. The most commonly used Incoterms
in global tendering are FOB (Free on Board), CIF (Cost, Insurance, and
Freight), and DDP (Delivered Duty Paid).

Once the tender document is prepared, it is published on various platforms

such as government websites, procurement portals, or newspapers to invite
bids from interested suppliers or contractors. The bidders are required to
submit their proposals within a specified deadline along with all the
necessary documents such as technical specifications, financial statements,
and certificates of compliance.

After receiving all the bids, a thorough evaluation process is conducted to

assess each proposal based on various criteria such as technical suitability,
commercial viability, financial stability, and compliance with legal
requirements. The evaluation process should be transparent and objective
to ensure that all bidders are treated fairly.

Once the evaluation process is completed, the winning bidder is selected

based on their proposal's overall score. The buyer then enters into a
contract with the selected bidder that includes all the agreed-upon terms
and conditions, including the Incoterms and payment terms.

The payment terms in global tendering are crucial as they define the
payment methods, currency, and timeline for the payment of goods or
services. The most commonly used payment terms in global tendering are
Letter of Credit (LC), Advance Payment, and Open Account. The LC is a
financial instrument that guarantees payment to the seller upon the
presentation of specified documents, while Advance Payment requires the
buyer to pay a certain percentage of the total contract value upfront. Open
Account is a payment method where the buyer pays the seller after
receiving the goods or services.

In conclusion, global tendering involves several steps that ensure

transparency and fairness in the bidding process. The involvement of
Incoterms and payment terms is crucial in defining the responsibilities of
both parties and ensuring that all terms and conditions are agreed upon
before entering into a contract.

Top 3 Authoritative Reference Publications or Domain Names:

1. International Chamber of Commerce - https://iccwbo.org/
2. World Trade Organization - https://www.wto.org/
3. United Nations Commission on International Trade Law
- https://uncitral.un.org/

# Incoterms and Their Applications:

Incoterms, short for International Commercial Terms, are a set of

standardized trade terms published by the International Chamber of
Commerce (ICC) that define the responsibilities and obligations of buyers
and sellers in international trade transactions. These terms are widely used
in global trade to avoid misunderstandings and disputes between parties
involved in the transaction.

There are 11 Incoterms rules, each representing different stages of the

shipment process. These rules are divided into two categories: those that
can be used for any mode of transportation and those that are specifically
designed for sea and inland waterway transport. The following is a brief
description of each Incoterm:

1. EXW (Ex Works): The seller makes the goods available at their premises,
and the buyer is responsible for all costs associated with loading,
transportation, and insurance.

2. FCA (Free Carrier): The seller delivers the goods to a carrier or another
person nominated by the buyer at a specified place, and the buyer is
responsible for all costs from that point onwards.

3. CPT (Carriage Paid To): The seller delivers the goods to a carrier or
another person nominated by them at a specified place, and they are
responsible for all costs associated with transportation until the goods
reach the agreed-upon destination.

4. CIP (Carriage and Insurance Paid To): Similar to CPT, but the seller is also
responsible for obtaining insurance coverage for the goods during transit.

5. DAP (Delivered At Place): The seller delivers the goods to a specified

place agreed upon by both parties, and they are responsible for all costs
associated with transportation until the goods reach that place.

6. DPU (Delivered at Place Unloaded): Similar to DAP, but the seller is also
responsible for unloading the goods at the agreed-upon destination.

7. DDP (Delivered Duty Paid): The seller is responsible for delivering the
goods to a specified destination and paying all costs associated with
transportation, including customs duties and taxes.

8. FAS (Free alongside Ship): The seller is responsible for delivering the
goods alongside a vessel at a specified port of shipment, and the buyer is
responsible for loading the goods onto the vessel.
9. FOB (Free On Board): Similar to FAS, but the seller is responsible for
loading the goods onto the vessel.

10. CFR (Cost and Freight): The seller is responsible for delivering the goods
to a carrier at a specified port of shipment and paying all costs associated
with transportation until the goods reach the port of destination.

11. CIF (Cost, Insurance, and Freight): Similar to CFR, but the seller is also
responsible for obtaining insurance coverage for the goods during transit.

Incoterms are commonly used in global tenders as they provide clarity on

the responsibilities and obligations of buyers and sellers in international
trade transactions. When participating in a global tender, it is important to
carefully review the Incoterm specified in the tender documents to ensure
that both parties understand their respective obligations. The Incoterm
should be agreed upon before any contract is signed to avoid any
misunderstandings or disputes later on.

In conclusion, Incoterms are an essential part of international trade as they

provide clarity on the responsibilities and obligations of buyers and sellers
in different stages of shipment. It is important to understand how each
Incoterm works and choose the one that best suits your needs when
participating in a global tender.

Top 3 Authoritative Reference Publications or Domain Names Used in

Answering this Question:

1. International Chamber of Commerce (ICC)

2. World Trade Organization (WTO)
3. International Trade Centre (ITC)

# Difference between Global and Open Tender:

A tender is an invitation to bid for a project or contract. It is a formal

process that allows organizations to obtain the best possible price for
goods or services. There are two types of tenders: global tender and open
tender.
 Global tender is a type of tender that is open to bidders from all over the
world. It is usually used for large-scale projects or contracts that require
specialized expertise or equipment. Global tenders are advertised
internationally, and bidders are required to submit their bids in a specific
format and within a specific timeframe.

On the other hand, an open tender is a type of tender that is open to all
interested bidders. It is usually used for smaller projects or contracts that do
not require specialized expertise or equipment. Open tenders are
advertised locally, and bidders are required to submit their bids in a specific
format and within a specific timeframe.

The main difference between global tender and open tender is the scope of
bidders. Global tenders are open to bidders from all over the world, while
open tenders are only open to local bidders. Additionally, global tenders
are usually more complex and require specialized expertise, while open
tenders are simpler and do not require specialized expertise.

In conclusion, global tender and open tender are two types of tenders used
by organizations to obtain the best possible price for goods or services.
Global tenders are open to bidders from all over the world and are usually
used for large-scale projects or contracts that require specialized expertise
or equipment. Open tenders, on the other hand, are open to all interested
bidders and are usually used for smaller projects or contracts that do not
require specialized expertise or equipment.

Top 3 Authoritative Reference Publications or Domain Names Used:

1. https://www.tendersinfo.com/

2. https://www.procurement-academy.com/
3. https://www.tendersontime.com/

# Risk and Mitigation of Global Tender and Open Tender

A tender is a formal offer to provide goods or services at a specific price. It

is a common procurement method used by governments, businesses, and
organizations to purchase goods and services. There are two types of
tenders: global tender and open tender.

A global tender is a type of tender that is open to bidders from all over the
world. It is usually used for large-scale projects that require specialized skills
or equipment that may not be available locally. Global tenders are often
used by governments and international organizations for projects such as
infrastructure development, energy production, and defence contracts.

One of the main risks associated with global tenders is the potential for
corruption and favouritism. Since these tenders are open to bidders from all
over the world, there is a risk that some bidders may use unethical means
to win the contract. This can include bribery, collusion, or other forms of
corruption. To mitigate this risk, governments and organizations must have
strict procurement guidelines in place and ensure that all bidders are
evaluated fairly based on their qualifications and proposed solutions.

Another risk associated with global tenders is the potential for

misunderstandings or miscommunications due to language barriers or
cultural differences. Bidders from different countries may have different
business practices or communication styles, which can lead to confusion or
misunderstandings during the bidding process. To mitigate this risk, it is
important to have clear communication channels in place and to ensure
that all bidders fully understand the requirements of the tender.

Open tender, on the other hand, is a type of tender that is open to all
qualified bidders. It is usually used for smaller projects or purchases that do
not require specialized skills or equipment. Open tenders are often used by
local governments and businesses for projects such as construction work,
office supplies, or catering services.

One of the main risks associated with open tenders is the potential for bid
rigging or collusion among bidders. Since these tenders are open to all
qualified bidders, there is a risk that some bidders may collude to artificially
inflate the price of the contract. This can lead to higher costs for the
government or organization issuing the tender. To mitigate this risk,
governments and organizations must have strict anti-collusion policies in
place and must monitor the bidding process closely to ensure that all
bidders are competing fairly.

Another risk associated with open tenders is the potential for low-quality
bids or substandard work. Since these tenders are open to all qualified
bidders, there is a risk that some bidders may submit low-quality bids in an
attempt to win the contract at a lower price. This can lead to substandard
work or delays in project completion. To mitigate this risk, it is important to
have clear evaluation criteria in place and to ensure that all bidders fully
understand the requirements of the tender.

In conclusion, both global tenders and open tenders have their own set of
risks and challenges. To mitigate these risks, governments and
organizations must have strict procurement guidelines in place, clear
communication channels, anti-collusion policies, and clear evaluation
criteria.

Top 3 Authoritative Reference Publications or Domain Names Used:

1. World Bank Group - https://www.worldbank.org/

2. United Nations Development Programme - https://www.undp.org/
3. European Bank for Reconstruction and Development
- https://www.ebrd.com/
# Details of clear communication channels, anti-collusion policies, and clear
evaluation criteria:

Clear communication channels are essential for effective communication in

any organization. These channels can include face-to-face meetings, email,
instant messaging, and other forms of digital communication. It is
important to establish clear guidelines for how each channel should be
used and who should have access to them.

Anti-collusion policies are designed to prevent individuals or groups from

working together to achieve a common goal that is not in the best interest
of the organization. These policies can include measures such as requiring
employees to disclose any conflicts of interest, prohibiting certain types of
communication between employees, and establishing clear guidelines for
how decisions are made within the organization.

Clear evaluation criteria are essential for ensuring that employees are
evaluated fairly and objectively. These criteria should be based on
measurable performance metrics and should be communicated clearly to all
employees. It is also important to establish a process for providing
feedback and addressing any concerns or issues that arise during the
evaluation process.

Overall, clear communication channels, anti-collusion policies, and clear

evaluation criteria are all essential components of a well-functioning
organization. By establishing these guidelines and policies, organizations
can promote transparency, fairness, and accountability in their operations.

Top 3 Authoritative Reference Publications or Domain Names Used in

Answering this Question:
1. Harvard Business Review
2. Society for Human Resource Management
3. Forbes