Automate tendering processes with artificial intelligence

A decisive factor for the economic success of a company lies in the efficient preparation and processing of offers and tender documents. In view of the increasing price awareness and quality demands of prospects and customers, it has become necessary for quotation management to have more individuality and more efficient processes. If this is not adequately implemented, you may lose customers and your company's reputation will suffer. The right Technologies can help simplify tendering processes and take bid management to a higher level. The use of artificial intelligence (AI) enables companies to automate their tendering process.

Tender procedure - definition

The tendering process is also referred to as the bidding process or process call. In this process, a contracting entity - for example, an organization, government, or company - solicits bids from bidders - for example, suppliers, service providers, or contractors. This process enables the tendering entity to create transparent competition and obtain the best bids to meet its requirements. In a bidding process, the bidding entity defines its needs, technical specifications, qualifications, and other relevant information that is important to vendors. Vendors can then submit their bids, which are then evaluated according to predefined criteria. The most successful providers are awarded the contract and carry out the project or service on behalf of the tendering body.

Background to the tender

As a matter of principle, contracting authorities do not conclude their contracts informally. This approach is based on the idea that public procurement law should make projects financed by taxes and levies accessible to free competition and, at the same time, enable precise cost control. By means of a call for tenders, the contracting authorities invite bids for construction, service or supply services in which the requirements of public procurement law must be met. The announcement is usually made in generally published print media, in special trade media and also in digital form on various Internet portals. The tender notices are subject to certain deadlines within which the bidding documents must be requested and bids submitted.

The most common tendering methods at a glance

Public tenders

These procedures are predominantly carried out by governments or public institutions in order to award contracts. This type of tender is subject to strict legal requirements and thus ensures the transparency and fairness of the process. In recent years, however, more commercial or even private clients have also begun to use this option to put projects out to tender. The expansion of the tender market is based on the one hand on the expectation of reducing costs. On the other hand, it is based on the prospect of gaining access to a larger pool of potential service providers and, sometimes, new impetus.

Restricted tenders

Under this approach, only selected providers are invited to bid. As a rule, the selection of suppliers is based on their experience, expertise, or previous pre-qualification.

Negotiated procedure

Here, negotiations are conducted directly with one or more suppliers in order to obtain the best conditions. This procedure is often used for complex projects where the technical requirements are not clearly defined.

Competitive dialogue

In this tendering process, the tendering bodies enter into a dialogue with the suppliers to develop innovative solutions and specify the requirements before the final bids are submitted.

Procedure of a tendering process

A tendering process takes place in several steps:

  1. Needs Assessment: The tendering body identifies its exact needs and defines the requirements for the project, service or product.
  2. Prepare tender documents: Detailed tender documents are prepared containing all relevant information for potential suppliers, such as technical specifications, terms of delivery and contract conditions.
  3. Public Notice: The call for entries is announced publicly, either in printed media, special trade media or digitally on appropriate Internet portals.
  4. Offer Deadline: Interested companies have a set period in which to submit their bids.
  5. Bid Review: The tenders submitted will be examined by the tendering body to ensure that they comply with the requirements and contain all the information requested.
  6. Apply scoring criteria: The bids are evaluated according to predefined evaluation criteria set in advance by the tendering body.
  7. Award decision: On the basis of the evaluation and the evaluation criteria, the tendering body decides which bid is to be awarded the contract.
  8. Conclusion of contract: The successful bidder and the tendering entity enter into a contract that specifies the terms and implementation of the project or service.
  9. Implementation and control: The contracted provider carries out the project or service in accordance with the agreed terms and conditions, while the tendering body controls and monitors implementation.
  10. Final Report: Upon completion of the project or service, a final report will be prepared documenting the results and progress of the bidding process.

How does AI deployment reform the tendering process?

There are several ways to determine which tasks the artificial intelligence can take over in automating the tendering process and thus optimize the entire process. This includes:

Data evaluation and data extraction

AI is able to analyze large volumes of tender documents and records and extract relevant information. As a result, the required information is found more quickly and accurately.

Automated preselection

KI can pre-qualify potential bidders based on their qualifications and experience. This ensures that only suitable companies are invited to bid.

Template-based response generation

KI uses standardized templates to generate quote responses to frequently asked questions or requirements. This speeds up the process and ensures consistent response quality.

Offer evaluation

KI automatically evaluates submitted offers and compares them with the defined criteria. This supports the tendering body in evaluating and selecting the best offer.

Monitoring and analysis

KI monitors the tender process and performs analyses to identify bottlenecks or potential for improvement.

Interaction with bidders

AI responds to requests from bidders guides them through the process.

Natural Language Processing (NLP)

AI requires advanced NLP techniques to understand the meaning of questions and requirements and to formulate precise answers.

By implementing AI, companies can speed up the entire tendering process. This leads to more efficient processing of tenders and saves time. The accuracy and consistency of bid responses are increased, while better data analysis provides decision makers with an informed basis for selecting the best bid. Likewise, transparency and traceability are strengthened. The introduction of an AI system requires an initial effort to adapt the data structure and adapt the AI to the specific requirements of the tender process to be trained. Data protection and security are essential, as the processing of sensitive data in the tendering process requires careful handling.

Conclusion

Incorporating artificial intelligence into the tendering process opens up new opportunities for your company. Automation makes the tendering process faster and more transparent, benefiting both clients and potential contractors. With the use of AI, the entire process can be optimized. The optimization ranges from the analysis of tender requirements to the structuring of responses. Automation will enable companies to work more efficiently and achieve competitive advantages in the future. The interaction of man and machine will thus significantly shape the tendering process.

Would you like to receive more information about what you can achieve with AI, automation and digitalization in your company? Then contact us via the Contact form.

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