Open tender: Definition, process, and when to use it

Open tendering is a procurement method where organizations publicly advertise contract opportunities and allow any qualified supplier to submit a bid. By opening the process to the broader market, it promotes transparency, competition, and fair pricing, especially in regulated or high-stakes procurement environments.

For procurement teams, open tendering can surface better pricing and new suppliers while providing a clear audit trail that supports compliance and accountability.

What is open tendering?

An open tender is a procurement method where organizations publicly invite all qualified suppliers to submit bids for a contract, creating open competition and equal access to the opportunity.

Unlike selective or restricted procurement methods, open tendering does not limit participation to preapproved vendors. Any supplier that meets the stated requirements can compete, which helps organizations test market pricing, surface new vendors, and demonstrate fairness in how contracts are awarded.

Because the process is publicly advertised and governed by predefined rules, open tendering is commonly used in government procurement and other environments where transparency and accountability are essential.

Key characteristics of open tendering

Open tendering is defined by a set of procedural and governance requirements that apply equally to all participants:

• Public advertisement: Contract opportunities are posted through procurement portals, industry publications, or tender platforms so any interested supplier can access them
• Open participation: All suppliers that meet basic qualification requirements are allowed to submit a bid
• Transparent evaluation criteria: Scoring methods and selection criteria are disclosed in advance
• Defined timelines: Submission deadlines are fixed and applied consistently to all bidders
• Standardized documentation: Tender documents ensure all suppliers receive the same information and respond in comparable formats

Together, these characteristics help reduce bias, limit discretion in decision-making, and create a clear audit trail.

How open tendering differs from other procurement methods

Open tendering removes barriers to entry by design. While closed or selective tendering limits competition to invited or prequalified suppliers, open tendering prioritizes openness over speed or familiarity. This trade-off can increase administrative effort and extend timelines, but it also strengthens competition and public trust, particularly for high-value or regulated contracts.

The open tendering process: Step by step

Open tendering follows a structured process designed to ensure equal access, consistent evaluation, and defensible decision-making. While timelines vary by organization and contract size, most open tenders take several weeks from initial publication to contract award.

1. Preparation and planning

Strong preparation sets the foundation for a competitive and manageable tender. Clear requirements and evaluation criteria help attract qualified bids and reduce downstream delays.

• Define requirements: Document technical specifications, performance expectations, delivery timelines, and service levels
• Establish evaluation criteria: Create weighted scoring criteria that balance price, quality, experience, and risk
• Prepare tender documentation: Assemble instructions, contract terms, submission templates, and supporting materials
• Set timelines: Allow sufficient time for market response while aligning with internal project schedules

2. Public advertisement and invitation

Once documentation is finalized, the organization publicly advertises the tender to invite market participation. Notices are typically posted on government procurement portals, industry publications, or tender platforms.

The advertisement outlines key details such as eligibility requirements, submission deadlines, and where suppliers can access the full tender package.

3. Bid preparation period

During the bid preparation period, suppliers review requirements, develop proposals, and request clarifications. This stage often includes a formal Q&A process. To maintain fairness, all questions and responses are shared with every registered bidder so no supplier has access to privileged information.

4. Bid submission and deadline

Open tendering relies on strict submission rules to preserve process integrity. Late or incomplete submissions are typically disqualified automatically. Organizations use secure submission methods, such as sealed physical tenders or electronic portals, to ensure bids remain confidential until the deadline and to maintain a clear audit trail.

5. Evaluation and scoring

After the submission deadline, bids are evaluated against the published criteria using a documented and objective process.

• Compliance review: Confirm bids meet mandatory requirements before scoring
• Scoring against criteria: Apply the predefined vendor comparison matrix consistently
• Committee assessment: Multiple evaluators review proposals to reduce individual bias

All scoring decisions and rationales are recorded to support transparency and address potential challenges.

6. Contract award and notification

The contract is awarded to the bidder that offers the best overall value based on the evaluation results. All participants are notified of the outcome.

In many cases, unsuccessful bidders may request feedback or debriefs, and some jurisdictions require a standstill period before the contract is formally executed.

Open tender vs. closed tender: Understanding the differences

Open and closed tendering serve different procurement goals. The right approach depends on how much competition, speed, and control an organization needs for a given purchase.

Open tendering prioritizes transparency and broad market access by allowing any qualified supplier to bid. Closed tendering, sometimes called selective tendering, limits participation to a shortlist of invited or prequalified suppliers, trading openness for efficiency and predictability.

When to use open tendering

Open tendering is generally the right choice when transparency and competition outweigh speed or administrative convenience. It is best for:

• Standardized goods or services with clearly defined requirements
• Public sector or regulated procurements
• High-value contracts where market pricing matters
• Situations where discovering new suppliers is a priority

When to use closed tendering instead

Closed tendering works better when the supplier pool is limited or when timelines and confidentiality are critical. It is best for:

• Highly specialized services with few qualified providers
• Time-sensitive projects that cannot accommodate long procurement cycles
• Strategic or confidential initiatives
• Procurements based on established supplier relationships

Benefits of open tendering

Open tendering benefits both buyers and suppliers by widening competition and standardizing how decisions are made. While it requires more upfront coordination, the structure of an open tender can improve pricing outcomes, governance, and market access over time.

Benefits for buyers and procurement teams

For organizations running the tender, open competition helps balance cost control with fairness and accountability. It offers:

• Competitive pricing: A larger pool of bidders increases pricing pressure and helps organizations benchmark market rates
• Transparency and defensibility: Public rules, documented scoring, and clear award decisions reduce the risk of disputes or perceived favoritism
• Access to new suppliers: Open tenders surface capable vendors that may not appear on existing supplier lists
• Regulatory compliance: Open tendering aligns with public-sector and regulated procurement requirements
• Market insight: Reviewing multiple proposals reveals pricing trends, service models, and emerging capabilities

Benefits for suppliers and contractors

For suppliers, open tendering creates opportunities that are not dependent on prior relationships or invitation-only access. It delivers:

• Equal opportunity to compete: All qualified suppliers are evaluated against the same criteria
• Clear expectations: Published requirements and scoring criteria make it easier to tailor proposals
• Market entry opportunities: New or smaller suppliers can compete alongside established firms
• Merit-based outcomes: Awards are based on documented evaluation rather than informal preferences
• Business development signals: Feedback and outcomes help suppliers refine future bids

Challenges and limitations of open tendering

Open tendering promotes transparency and competition, but it also comes with practical trade-offs that procurement teams need to account for. These limitations don’t outweigh the benefits, but they can affect timelines and workload if they’re not planned for upfront.

Because open tenders require public notice periods, formal clarifications, and structured evaluations, procurement cycles are often longer than with selective approaches. Without early planning, these extended timelines can delay project starts and create pressure from internal stakeholders.

Open participation also increases administrative effort. Large volumes of submissions require more time for review, scoring, and documentation, and teams may receive bids from suppliers that meet basic eligibility requirements but lack the experience to deliver.

Comparing a wide range of proposals across price, quality, and risk adds further complexity. With clear requirements, qualification thresholds, and consistent evaluation criteria in place, most of these challenges can be managed without sacrificing the benefits of open competition.

Types of tendering methods beyond open and closed

Not all procurements fit neatly into open or closed tendering. Many organizations use hybrid or alternative tendering methods to balance competition, speed, and control depending on the complexity of the purchase.

Best practices for open tendering

Running an effective open tender depends less on the format itself and more on how clearly the process is designed and executed. Thoughtful planning and disciplined execution help organizations capture the benefits of open competition without unnecessary friction.

For procurement teams and buyers

Clear documentation and consistent process design make open tenders easier to manage and defend.

• Develop clear specifications: Define requirements, performance expectations, and success criteria in plain, unambiguous language
• Set realistic timelines: Give suppliers enough time to prepare quality bids while aligning with internal delivery schedules
• Use objective evaluation criteria: Apply weighted scoring that reflects actual priorities rather than defaulting to lowest price
• Document decisions thoroughly: Maintain records of clarifications, scoring, and award rationale to support transparency
• Communicate consistently: Share updates, answers, and outcomes with all bidders at the same time

For suppliers and bidders

Strong bids focus on alignment with requirements rather than generic sales messaging.

• Follow instructions precisely: Meet submission requirements, formatting rules, and deadlines without exception
• Address evaluation criteria directly: Structure proposals to map clearly to the published scoring framework
• Use clarification periods effectively: Ask questions early to resolve ambiguity rather than making assumptions
• Provide evidence of capability: Support claims with relevant examples, references, or past performance
• Submit early when possible: Reduce the risk of last-minute technical or administrative issues

How technology improves open tendering

Technology plays a growing role in making open tendering easier to manage without compromising transparency. Digital procurement tools help teams handle high bid volumes, apply consistent processes, and maintain clear records from tender publication through contract award.

E-procurement platforms centralize documentation, submissions, and bidder communications in one place, reducing version control issues and manual follow-up. Automated workflows standardize key steps and notifications, which helps teams stay on schedule and avoid missed deadlines during long procurement cycles.

Technology also improves evaluation consistency. Structured scoring templates and digital audit logs make it easier to apply criteria uniformly, document decisions, and demonstrate fairness if a procurement outcome is questioned later. Online portals further expand supplier access by making opportunities easier to find and participate in, particularly for smaller or newer vendors.

Integrating tender management with financial operations

Tendering is only one part of the broader source-to-pay process. When procurement systems operate in isolation, it becomes harder to track whether negotiated pricing and terms are reflected in actual spending.

Connecting tender management with financial operations creates continuity from supplier selection through payment. Approved vendors, contract terms, and pricing flow directly into purchasing and accounts payable, reducing manual handoffs and policy gaps. This integration also improves visibility into committed spend and helps finance teams enforce controls before money goes out the door.

Streamline procurement operations with Ramp

While formal tendering processes—especially public sector tenders—have their own specialized requirements, strong procurement management remains critical for businesses of all sizes.

Ramp’s procurement software helps you simplify procurement, vendor communication, and purchase approvals by offering:

• Centralized management: Store supplier information, purchasing documents, and communications in one secure platform for easy access and better visibility
• Automated workflows: Streamline purchase requests, approvals, and vendor onboarding with customizable workflows and real-time notifications
• Regulatory compliance support: Strengthen internal controls with features like three-way matching, audit trails, and customizable approval policies
• Real-time analytics: Gain insights into supplier performance, spending patterns, and purchasing activity to improve decision-making

Ramp helps your business manage procurement efficiently—whether you’re sourcing suppliers through a tender process or using other procurement methods.

Learn how Ramp’s procurement software can help you manage procurement with greater speed, visibility, and control.