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Selection of Source, Limited Tender .....Purchase procedure (contd..)

Limited Tender Enquiry (LTE)

                        What is LTE ?
 

 

This mode of selecting vendor/s refers to inviting tenders from only a limited numbers of bidders. Since tendering is limited to only a few bidders it is presumed that the bidders are well known to the purchaser for their capability etc.LTEs are issued in such a way that sufficient competitive quotations are received from the bidders.

Thus LTE is resorted to only when reliable bidders ( manufacturers/ suppliers/ traders/ contractors ) are known. For this purpose, the Purchasers maintains a list of 'approved' or registered vendors.
 

Thus the selection of a vendor for LTE is done by the purchaser  to ensure that :
 
  • the firms are financially and technically sound

  • the past performance of the firms with regard to quality ,price and adherence to time schedule has been acceptable

  • the Supplier has successfully made the last supply

                                                             How it is operated ?

An LTE is also an Notice Inviting Tender (NIT) , limited only to a few bidders.

Hence, all the documents that make an NIT ,such as description of requirement, associated terms and conditions , a fixed date and time for responding etc are sent , called tender enquiry, to the bidders.

The enquiries are sent on the same day and a date is mentioned ,clearly, for opening it.

The original LTE papers are despatched through registered post/ under certificate of posting/ e-mail/ FAX/ Courier on the address of the firm as available in the records of the purchase department.

 

Single Tender Enquiry (STE)

 
                     What is STE ?
 
 

It refers to issuing Tender enquiry to only one firm i.e. to single firm. It happens usually when :

The item concerned is manufactured by only one firm. It is then called a Proprietary (Original Equipment Manufacturers - OEM) Enquiry. Such Proprietary items are purchased from their manufacturers only. Sometimes , due to an arrangement with the dealers , a firm may not like to respond directly to an enquiry. In such situations LTEs can be issued to many dealers of that firm for having competition for getting

better price.

The item concerned is manufactured by many firms but due to certain specific reasons ,enquiry can be issued to only one party. It usually happens in case of retrofitting cases where the earlier material has been  supplied by the same firm and the needed material is to be fitted in that only, for example , spare parts of an equipment.

Normally, the proprietary items are purchased on supplier's terms as the supplier knows that the buyer depends on it only for meeting the requirement. This is disadvantageous from buyer point of view. In fact, the more are the vendors, the more is the competition and the more are the chances of getting comparatively low price , a situation that favours any buyer.

 
 

Different modes of Tendering  :

 

 

 
 

Purchase Procedure (Steps)

Purchase Flow Chart
Recognition and description of need
Transmission of need (Indenting)
Selection of Source to satisfy the need
Contracting with the accepted source
Following up with the source / supplier
Receiving and inspecting material
Payment and closure of the case

 

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