Public (government) vs private tenders: A detailed comparative analysis
When looking at tenders, public (or government) and private tenders are the two overarching categories. There are several differences between the two and each comes with its own set of advantages and disadvantages.
And because of this, there are many factors to consider before making the decision to bid or not not bid.
But before we delve deeper into the subject, let’s take a detailed look at how one differs from the other.
What is a public tender?
A public tender is one where Ministries, Organs of State, Statutory Boards, and various other government agencies put out requests to acquire raw materials, goods or services. In Singapore, important details regarding public tenders are listed on the Government Electronic Business (GeBIZ) portal.
What is a private tender?
On the other hand, private tenders are put out by private companies, organisations and corporations across various industries. Details on private tenders can be found on separate portals such as TenderBoard, newspapers or company websites.
Difference between public and private tenders
Generally, there are more public tenders out there than private tenders. This is due to the purchasing process of these organisations.
Public sector’s purchases are open to public scrutiny. Therefore, all public sector contracts must therefore be put out to tender. Meanwhile, tendering may not be obligatory for many organisations in the private sector.
2) Source of funding
Money to fund projects listed in public tenders comes largely from taxpayers’ money. Meanwhile, funds used to finance private tenders come from the buyer organisation’s revenue.
Government organisations have an obligation to show their spend, and so are known to be more transparent. Gebiz would usually announce contract awarded, bidders and awarded suppliers.
Private companies are not as clear cut. They are governed by their own policies and can choose to share or not share information pertaining to the tender, including awarded or participation information.
4) Degree of regulation
Public tenders are subjected to regulation by the various legislations put in place to ensure that public interest is kept as the top priority.
In Singapore, some of these legislations include the Government Procurement Act, which can be further broken down into three pieces of subsidiary legislation:
- The Government Procurement (Application) Order (the “GP Order”). This specifies the states, authorities, and procurements relevant to the Act.
- The Government Procurement (Challenge Proceedings) Regulations (the “GP Regulations”). This states the procedural matters in relation to proceedings where a tenderer may have brought against a contracting authority before a Government Procurement Adjudication Tribunal (a “Tribunal”).
- The Government Procurement Regulations 2014 (“GP Regulations”). This legislation sets out the types of procedures which may be used in the procurement process.
On the international stage, organisations such as The World Trade Organisation may further impose certain regulations.
While the public sector is also subjected to regulation, it is usually the companies that determine the policies and regulations that govern their purchasing process.
A quick overview of the key differences between public and private tenders
|Public Tenders||Private Tenders|
|Ubiquity||More common||Less common|
|Source of Funding||Public Funds||Bidding organisation’s revenue|
|Transparency||High due to the government’s accountability to the public||Depends. Some companies don’t have an obligation|
|Degree of Reputation||High||Ranges|
Neither one type of tender is inherently better than the other. While there may be differences between private and public tenders, both types of organisations implement processes to help manage their procurement successfully.
As potential vendors, understanding their requirements and the tendering process would significantly help you clinch the deal.
Rather than filter opportunities by types of tenders, choose a variety from each category and bid for the projects. After all, it’s always better to work with a wide variety of organisations in various sectors and build your reputation and relationship within those networks.
To find out how you can determine what deals you should participate in, download our Ultimate Guide to Tendering today!