Every year, Australian governments and major corporations spend billions of dollars procuring goods and services through a formal process called tendering. For businesses looking to secure lucrative contracts with government agencies or large private sector clients, understanding how tendering works isn’t just helpful—it’s essential.
Whether you’re a construction company eyeing infrastructure projects, a trade contractor hoping to work on government buildings, or a professional services firm targeting corporate clients, the tendering process is likely to play a significant role in your business growth. Yet for many Australian businesses, tendering remains an intimidating and mysterious process.
This comprehensive guide explains everything you need to know about tendering in Australia, from the basic concepts through to practical steps for getting started.
What Does Tendering Mean?
In simple terms, tendering is a formal process where businesses submit written proposals—called tenders or bids—to provide goods, services, or construction work to a client. The client (often called the buyer, procurer, or principal) reviews all submissions and selects the one that offers the best value.
Think of tendering like a structured job application process. The client advertises what they need, interested suppliers submit their credentials and pricing, and the client chooses the most suitable provider. However, unlike a typical job application, tendering involves detailed technical specifications, strict compliance requirements, and formal evaluation criteria.
The term “tender” can refer to both the process itself and the document you submit. When someone says they’re “responding to a tender” or “putting in a tender,” they mean they’re preparing a formal written proposal in response to a tender opportunity.
Why Do Organisations Use Tendering?
Government agencies are legally required to use competitive tendering processes to ensure public money is spent transparently and efficiently. This requirement stems from procurement legislation designed to prevent favouritism, corruption, and waste of taxpayer funds.
For government procurement, tendering serves several key purposes:
Ensuring fair competition
Every qualified business gets an equal opportunity to compete for government work, regardless of existing relationships or connections.
Achieving value for money
Competition between suppliers drives better pricing, quality, and innovation. However, “value for money” doesn’t simply mean the lowest price—it considers the whole-of-contract costs and benefits, including quality, risk, and long-term outcomes.
Maintaining transparency
The structured process creates a clear audit trail showing how decisions were made and why particular suppliers were chosen.
Meeting legal obligations
Government entities must comply with Commonwealth Procurement Rules (CPR) and state-based procurement frameworks, which mandate competitive processes above certain value thresholds.
Key Personnel
A snapshot of your team’s experience and qualifications, if relevant to delivery.
Contact Information
Include someone easily reachable who can speak to the opportunity and respond to government procurement queries.
Large private sector organisations also use tendering, particularly for significant contracts. While they’re not legally obligated to tender like government agencies, many adopt similar processes to ensure they’re getting the best possible outcome for major procurements.
The Australian Tendering Landscape
Australia’s tendering environment operates across multiple levels, each with its own platforms, rules, and processes.
Federal Government Tendering
The Australian Government publishes all open business opportunities and awarded contracts on AusTender (www.tenders.gov.au). Federal procurement is governed by the Commonwealth Procurement Rules, which were updated with new rules coming into effect in November 2025.
Contracts valued above $10,000 (including GST) are published on AusTender’s Contract Notice List within 42 days of being awarded. This transparency requirement allows businesses to see what work is being awarded and to whom, helping you understand the market.
State and Territory Tendering
Each Australian state and territory operates its own tendering portal and procurement framework:
- NSW – eTendering platform
- Victoria – Tenders VIC (buyingfor.vic.gov.au)
- Queensland – QTenders
- Western Australia – Tenders WA
- South Australia – SA Tenders and Contracts
- Tasmania – Tenders Tasmania
- ACT – ACT Government Tenders
- Northern Territory – NT Government Tenders
While these portals vary in their specific features, they all serve the same fundamental purpose: advertising opportunities, facilitating tender submissions, and publishing contract awards.
Local Government Tendering
Australia’s 537 local councils also procure goods and services through tenders. Some use their state’s central platform, while others advertise through their own websites or specialist tender notification services. Local government work can be particularly valuable for smaller businesses and local contractors.
Private Sector Tenders
Major corporations, particularly in construction, mining, and infrastructure, also issue tenders for significant contracts. Private tenders may not appear on government portals but are often advertised through industry-specific platforms, professional networks, or directly to pre-qualified suppliers.
Common Types of Tenders in Australia
Understanding the different types of tendering methods helps you know what to expect when you encounter a tender opportunity.
Open Tendering
Open tenders allow anyone to submit their response no matter how big or small, or new they are. This is the most common type for government work, particularly for federal and state contracts. Government agencies are often legally required to use open tendering to ensure maximum competition and transparency.
The advantage of open tendering is that it gives every business a fair opportunity. The challenge is that competition can be fierce, with dozens or even hundreds of businesses competing for the same contract.
Selective Tendering
Also called “invited tendering,” selective tendering occurs when a client invites only pre-selected suppliers to submit tenders. The client typically creates a shortlist based on pre-qualification criteria, past performance, or responses to an Expression of Interest (EOI).
Selective tendering reduces the number of competing bids, potentially increasing your chances if you make the shortlist. It’s commonly used for complex or specialised projects where the client wants to ensure all tenderers have appropriate capabilities.
Negotiated Tendering
Negotiated tenders occur when a client approaches a single supplier, usually based on previous relationships or track record. This approach is typically used for highly specialised work, contract extensions, or situations where there’s only one suitable provider.
While negotiated tenders are less competitive, government agencies can only use this method in specific circumstances, such as urgent procurements or when no suitable bids were received through an open process.
Single-Stage vs Two-Stage Tendering
The traditional route is the single-stage tender process where an invitation to tender is sent out to prospective suppliers, sometimes after pre-qualification work is done, and suppliers submit their tender response for review.
Two-stage tenders involve early appointment of a business to a project before there is enough information for them to fully quote the job, also referred to as early contractor involvement (ECI) in Australia. This approach is valuable when clients want supplier input during the design phase to ensure the project stays within budget and is practically achievable.
The Tendering Process: Step by Step
While specific processes vary between different clients and types of work, most tender processes follow a similar pattern.
Stage 1:
Tender Identification and Registration
The process begins when a client publishes a tender opportunity. Following the instructions in the tender document to register your interest with the purchasing agency helps keep you up to date on any tender information sessions.
Registration typically requires creating an account on the relevant tender portal and setting up notifications for opportunities matching your business capabilities. Many businesses miss good opportunities simply because they weren’t monitoring the right platforms.
Stage 2
Reviewing Tender Documents
Once you’ve identified a relevant opportunity, carefully review all tender documents. Attend any tender information sessions offered as these are valuable opportunities to ask questions and make contact with the agency.
Tender documents typically include:
- Request for Tender (RFT) or Request for Quote (RFQ)
- Scope of work or technical specifications
- Evaluation criteria and methodology
- Contract terms and conditions
- Response templates and forms
- Submission instructions and deadlines
This is your opportunity to assess whether the tender is genuinely suitable for your business. Not every tender is worth pursuing—strategic tender selection is crucial for maintaining healthy win rates and profitability.
Stage 3
Seeking Clarification
If you are unclear about any requirements in the tender request, contact the tender coordinator to seek clarification. Most clients establish a formal clarification process, often with specific deadlines for questions. All clarifications are usually shared with all registered tenderers to maintain fairness.
Don’t be afraid to ask questions. It’s far better to seek clarification than to make assumptions that could result in a non-compliant or poorly targeted submission.
Stage 4
Preparing Your Tender Response
This is where the real work begins. Tender preparation includes planning, drafting and refining your proposal, making sure that you use the response forms provided and answer all questions, sticking to any word or page limits.
A strong tender response demonstrates:
- Compliance – You’ve addressed every requirement and followed all instructions
- Capability – You have the skills, experience, and resources to deliver
- Understanding – You grasp what the client needs and why
- Value – Your solution offers the best outcome considering price, quality, and risk
- Differentiation – What makes your offer stand out from competitors
Review the evaluation criteria to gain a better understanding of what things the government agency is particularly looking for and will be evaluating your offer against. Your response should directly address each evaluation criterion with clear evidence and examples.
Many businesses engage professional tender writers for complex or high-value opportunities. If you are not a strong writer, think about engaging a professional as a range of businesses offer tender writing services.
Stage 5
Submission
Tenders received after the specified closing date and time are deemed late and cannot be accepted unless the delay is due to mishandling by the agency or a technical issue with the tendering platform.
Most tender portals operate on strict deadlines, often closing at a specific time (e.g., 2:00 PM AEDT). It’s wise to submit at least a few hours before the deadline to avoid last-minute technical issues. Once you click submit, you typically cannot make changes.
Stage 6
Evaluation and Selection
After the tender closes, the client evaluates all submissions against their stated criteria. The agency collates and assesses all on-time submissions against the specifications, any mandatory conditions for participation, and determines which offers provide value for money.
The evaluation process can take anywhere from a few weeks to several months, depending on the procurement’s complexity and value. Government tenders typically use evaluation panels to assess responses, ensuring decisions are thorough and defensible.
Stage 7
Contract Award and Negotiation
Before sending a final contract to a supplier for a successful tender, agencies will generally contact them to discuss and clarify the terms and conditions of the procurement. This negotiation phase allows both parties to finalise details before formally signing the contract.
If your tender is unsuccessful, don’t be discouraged. Most government agencies provide debriefing opportunities where you can learn why you weren’t selected and how to improve future submissions.
Essential Tender Documentation: Why You Need a Capability Statement
Throughout the tender process, you’ll need to demonstrate your business’s credentials, experience, and capacity to deliver. This is where a professional capability statement becomes invaluable.
A capability statement is a concise document (typically 2-4 pages) that showcases your business’s core competencies, past performance, key differentiators, and compliance credentials. Think of it as your business’s professional resume—designed specifically for winning tenders.
Most tender responses require you to provide:
- Company overview and history
- Relevant experience and past projects
- Key personnel and their qualifications
- Certifications and insurances
- Financial capacity and business structure
- Quality, safety, and environmental management systems
- References from previous clients
A well-prepared capability statement compiles all this information in a professional, branded format that you can adapt for different tender opportunities. Rather than scrambling to gather information and write descriptions for every tender, you start with a solid foundation that positions your business competitively.
Beyond tender responses, capability statements are valuable for:
- Pre-qualification processes and supplier registrations
- Panel applications where you’re seeking to join an approved supplier list
- Direct marketing to potential clients who may invite you to tender
- Business development meetings and networking events
Getting Started with Tendering
If you’re new to tendering, the process can seem daunting. Here are practical steps to begin your tendering journey:
1. Prepare Your Business Foundations
Before pursuing tenders, ensure your business has the necessary credentials:
- Appropriate insurances – Public liability, professional indemnity, workers compensation
- Business registrations – ABN, ACN, GST registration, industry licences
- Quality systems – Documented policies and procedures, quality management systems
- Financial capacity – Ability to demonstrate financial viability and carry contract risk
- Safety credentials – Work Health and Safety systems, safety policies
2. Develop Your Capability Statement
Create a professional capability statement that clearly communicates your business’s value proposition. This document should be:
- Professionally designed with strong visual appeal
- Clearly structured with easy-to-navigate sections
- Focused on outcomes and results, not just activities
- Supported by evidence, examples, and data
- Regularly updated as your business grows
If you need help developing your capability statement, consider using professional templates or engaging a specialist service to ensure your document meets industry standards.
3. Register on Tender Portals
Create accounts on relevant government tender portals and set up email notifications for opportunities matching your business capabilities. Take time to understand each platform’s features and search functions.
4. Start Small and Build Experience
Don’t immediately pursue multi-million dollar contracts. Start with smaller tenders where you can learn the process and build your track record. Even unsuccessful tenders are valuable learning experiences.
5. Research Past Awards
Research your buyer by reviewing previously awarded contracts to understand what type of companies won similar tenders in the past and what the contracting agency looks for. This competitive intelligence helps you understand what success looks like.
6. Build Your References
Strong referees who can attest to your performance are crucial. Find referees who know your business and can attest to your work, giving them clear information about the tender request so they know what points to emphasise.
7. Consider Professional Support
Many businesses benefit from professional tender support, whether that’s:
- Tender writing services for complex bids
- Bid management consulting for high-value opportunities
- Training to build internal tender capabilities
- Template development for consistent, quality submissions
Common Tendering Terminology
Understanding tender terminology helps you navigate documents and processes confidently:
Approach to Market (ATM) – Any notice inviting potential suppliers to participate in a procurement
Commonwealth Procurement Rules (CPR) – The framework governing federal government procurement
Conforming vs Non-conforming – Whether a tender submission meets all mandatory requirements
Evaluation Criteria – The standards used to assess and compare tender submissions
Expression of Interest (EOI) – An initial call for interested suppliers to demonstrate their capabilities, often preceding a formal tender
Panel or Standing Offer – Pre-qualified supplier arrangements where approved businesses can be directly engaged for specific work
Request for Tender (RFT) – Formal invitation for suppliers to submit a tender
Request for Quote (RFQ) – Similar to RFT but typically for simpler, lower-value procurements
Value for Money – The core principle of government procurement, considering whole-of-contract benefits and costs, not just price
Key Principles of Successful Tendering
After reviewing hundreds of tender submissions, several principles consistently separate successful tenderers from unsuccessful ones:
Compliance is non-negotiable – Following instructions precisely and addressing every requirement is the foundation of a competitive tender. Non-compliant submissions are often eliminated without full evaluation.
Evidence trumps claims – Don’t just state that you’re experienced or capable—prove it with specific examples, data, and verified outcomes.
Understand the buyer’s problem – Successful tenders demonstrate deep understanding of what the client is trying to achieve and why they’re procuring this solution.
Differentiate strategically – Identify what genuinely sets you apart and ensure this is clearly communicated throughout your submission.
Manage risk from the buyer’s perspective – Address potential concerns proactively, showing how you’ll mitigate risks and deliver reliably.
Write clearly and professionally – Complex doesn’t mean better. Clear, concise writing that directly addresses evaluation criteria consistently outperforms verbose, jargon-filled responses.
Tendering and Business Growth
For many Australian businesses, tendering represents a pathway to significant growth. Government alone is one of the largest buyers in the Australian economy, with procurement spending in the billions annually. Add private sector opportunities, and the potential market is enormous.
However, successful tendering requires investment:
- Time to identify suitable opportunities and prepare quality submissions
- Capability to deliver what you promise if successful
- Resources to maintain compliance systems and documentation
- Patience to build track record and refine your approach
Not every business should pursue tenders. Tendering makes most sense when:
- You have genuine capability to deliver the required scope
- The contract size aligns with your business capacity
- You can afford the cash flow implications (government payment terms often extend 30+ days)
- You’re prepared to meet compliance requirements
- You can sustain bid costs without guaranteed success
For businesses that commit to developing tendering capabilities, the rewards can be substantial: predictable revenue pipelines, opportunities to grow capacity, enhanced business systems, and improved market positioning.
Next Steps: Your Tendering Journey
Understanding what tendering is and how it works is the first step. The next stages involve building your tendering capability, developing strong submission materials like professional capability statements, and systematically pursuing opportunities aligned with your business strategy.
Remember that tendering is a skill that improves with practice. Your first few submissions may not be successful, but each one teaches you something valuable about what clients want and how to communicate your value effectively.
Whether you’re a sole trader looking to break into local government work, a growing contractor targeting state infrastructure projects, or an established business pursuing federal opportunities, the tendering process offers a structured pathway to winning significant contracts.
The key is to start with solid foundations: ensure your business credentials are in order, develop professional marketing materials that position you competitively, and approach tendering strategically rather than opportunistically.
Ready to strengthen your tender capabilities? A professional capability statement is essential for successfully responding to tenders. Explore our capability statement services to discover how we help Australian businesses win more government contracts and tenders.
