TL;DR
Tenders are used for high-value or complex projects and require detailed, formal responses. Quotes apply to straightforward purchases where price is the main factor. Proposals sit in between, giving you the space to outline your recommended approach when the buyer’s requirements are not fully defined.
Key Takeaways
- Tenders involve detailed, regulated processes for high-value or complex projects, usually taking 8–12 weeks.
- Quotes are straightforward, price-focused, and typically finalised within 2–4 weeks.
- Proposals are solution-focused and allow you to demonstrate methodology, understanding and value.
- Federal thresholds are $125,000 for non-construction services and $7.5 million for construction (effective November 2025).
- State thresholds vary, but most sit around $250,000 for goods and services.
Across Australia, the terms tender, quote and proposal appear frequently in both government and private procurement. They sound similar, but each one carries different expectations, evaluation methods and levels of complexity. Knowing which is which helps businesses prepare the right type of response, avoid compliance issues and allocate effort where it matters most.
Procurement teams choose between these formats based on the value, risk and clarity of what they need to buy. High-value or complex work requires the rigour of a formal tender. Clear and simple purchases are handled through quotes. When the buyer knows the problem but not the exact solution, they request proposals that showcase expertise and delivery approach.
Understanding how each document works gives suppliers a clearer path to presenting their capability in the right way.
What is a tender?
A tender is a formal and highly structured procurement process used when the value or complexity of a project exceeds specific thresholds. An agency or organisation issues a Request for Tender (RFT) that sets out mandatory requirements, specifications, evaluation criteria, contract conditions and strict submission rules.
Submissions are assessed using weighted criteria, with evaluation panels scoring capability, methodology, risk management, experience and price against a predetermined matrix. The process is thorough and often involves multiple stages.
Typical timeframes range from 8 to 12 weeks, though complex or probity-sensitive procurements can run 16 weeks or longer. Government tenders appear on platforms such as AusTender, VendorPanel, QTenders and other state procurement portals.
Preparing for a tender requires time. Businesses often need to collate capability statements, case studies, insurance certificates, WHS documentation, financial information and referee details. For large projects, responses can span 50–100 pages or more.
What is a quote?
A quote is a supplier’s price for clearly defined goods or services. Buyers use quotes when the requirement is straightforward, the scope is clear and the decision is mainly price-led.
An RFQ sets out quantities, specifications, delivery requirements and timeframes. Suppliers respond with pricing and basic terms. Evaluation is simple and usually involves comparing cost, delivery and essential capability rather than scoring written criteria.
Quotes are commonly used for purchases below threshold values and have short turnaround times, generally 2–4 weeks. Once a buyer accepts a quote, it usually forms a binding contract, meaning the quoted price becomes the contracted price. Unlike tenders, there is rarely a negotiation phase after acceptance.
What is a proposal?
A proposal responds to a Request for Proposal (RFP) and is used when the buyer understands their problem but has not yet defined the exact solution. Instead of simply supplying a price, suppliers outline their recommended approach, methodology, team structure, understanding of the context and how outcomes will be achieved.
Proposals allow more room for thinking and strategy than quotes, while still being less compliance-heavy than tenders. They commonly appear in consulting, IT implementation and complex professional services. Some RFP processes also include presentations or interviews as part of evaluation.
A well-structured proposal mirrors the RFP’s layout, making it easy for evaluators to verify responses against the selection criteria. Strong proposals are typically 20–40 pages with supporting appendices.
Understanding the documentation load
The documentation requirements vary significantly across the three formats. Tender responses require the greatest level of evidence, often including company profiles, policies, insurances, financial statements, case studies and detailed written criteria responses. Quotes require minimal paperwork, sometimes limited to a pricing schedule and basic company details. Proposals sit between the two, focusing on approach, understanding and delivery rather than compliance documentation.
Key Differences: Tender vs Quote vs Proposal Side-by-Side
| Aspect | Tender (RFT) | Quote (RFQ) | Proposal (RFP) |
| Complexity | High – detailed documentation required | Low – straightforward pricing response | Medium to High – solution-focused |
| Typical Value | $125,000+ (federal) or $250,000+ (state) | Below tender thresholds | Varies – often mid to high value |
| Timeframe | 8-12 weeks (can extend to 16+) | 2-4 weeks | 4-8 weeks typically |
| Primary Focus | Compliance, capability, price | Price and delivery | Solution quality and approach |
| Evaluation | Weighted criteria, scoring matrix | Price comparison, basic capability | Methodology, innovation, value |
Complexity and Detail Requirements
The documentation burden varies dramatically across these three response types.
Tender responses demand comprehensive documentation. You’ll typically address multiple selection criteria with detailed written responses. Expect to provide company profiles, financial statements, insurance certificates, WHS policies, quality management documentation, case studies, and referee details. Response documents can run 50-100+ pages for complex tenders.
Quote responses are streamlined by comparison. A pricing schedule, basic company details, and delivery terms may suffice. Many quotes fit on a single page or a simple spreadsheet template provided by the buyer.
Proposal responses sit in between. You’ll outline your approach, methodology, team, and pricing—but the emphasis is on demonstrating thinking rather than ticking compliance boxes. A strong proposal might run 20-40 pages plus appendices.
Australian Procurement Terminology Guide
Beyond tenders, quotes, and proposals, you’ll encounter other procurement documents. Here’s what they mean.
What Is an RFI in Tendering?
An RFI (Request for Information) is a market research tool. Buyers issue RFIs to gather information about available solutions, supplier capabilities, and market conditions before committing to a formal procurement process.
RFIs help buyers understand what’s possible. They inform specification development and procurement strategy. Responding to an RFI doesn’t commit you to anything—and it doesn’t guarantee you’ll be invited to subsequent procurement stages.
That said, a strong RFI response positions you favourably. It demonstrates your capabilities and may influence how the buyer structures their requirements.
What Is an EOI in the Tender Process?
An EOI (Expression of Interest) assesses supplier capability to create a shortlist. Buyers use EOIs when they expect strong market interest and want to narrow the field before issuing detailed tender documents.
EOI responses are typically shorter than full tender submissions. You’ll demonstrate relevant experience, capability, and capacity—but you won’t usually price the work at this stage.
State government procurement often uses EOIs. If shortlisted, you’ll then receive the full RFT or RFP. Not being shortlisted means you won’t have the opportunity to tender—so treat EOIs seriously.
What Is an ITT (Invitation to Tender)?
An ITT (Invitation to Tender) is the formal tender invitation document. It contains specifications, requirements, conditions of tendering, evaluation criteria, and contract terms.
In Australian government procurement, you’ll see ITT used interchangeably with RFT (Request for Tender). The document tells you everything you need to prepare your tender response.
Pay close attention to mandatory requirements, lodgement deadlines, and any pre-submission briefings. Missing a mandatory requirement can result in your tender being excluded from evaluation.
What Does RFX Mean in Procurement?
RFX is an umbrella term covering any procurement request type. The ‘X’ stands for the variable: RFT, RFQ, RFP, RFI, or any other request format.
You’ll see RFX used in procurement software, policy documents, and industry discussions when referring to procurement requests generically. It’s a convenient shorthand when the specific document type isn’t relevant to the point being made.
Choosing the Right Approach
Understanding whether a request is a tender, quote or proposal helps you direct your effort where it matters most. Tenders require the strongest evidence and the most detailed responses. Quotes are designed for quick, price-driven decisions. Proposals allow you to demonstrate your thinking, approach and ability to deliver the right outcome.
Procurement thresholds and policies continue to evolve, and staying informed helps businesses remain competitive. The updated Commonwealth thresholds create more opportunities for Australian suppliers, especially SMEs.
Whatever the format, success comes from reading the procurement documents carefully, addressing the criteria directly and demonstrating why your business is the right choice for the work. Consistency in these fundamentals leads to stronger evaluations and better outcomes over time.
Frequently Asked Questions
What is the tender threshold in Australia?
For Commonwealth entities, the threshold is $125,000 for non-construction goods and services (from November 2025) and $7.5 million for construction services. State governments typically set thresholds around $250,000 for goods and services, though this varies by jurisdiction.
How long does a tender evaluation take in Australia?
Expect 8-12 weeks from submission deadline to contract award for standard procurements. Complex tenders involving probity oversight or multiple evaluation stages can take 16 weeks or longer.
Is a quote legally binding in Australia?
Yes—when accepted, a quote typically forms a binding contract. Your quoted price becomes your contracted price. Include appropriate validity periods and conditions to manage your commercial risk.
Can SMEs win government tenders?
Absolutely. The Commonwealth targets 25% of contract value from SMEs for contracts under $1 billion. Recent policy changes also require agencies to invite only Australian businesses for contracts below $125,000, creating more opportunities for local SMEs.
What’s the difference between open and limited tender?
Open tender is published publicly—any eligible supplier can respond. Limited tender invites specific suppliers, often from pre-qualified panels. Limited tender above threshold requires specific justification under the CPRs.
