Government Tender Terminology: 40 Terms Every Bidder Must Know

Government tender documents are dense with abbreviations and jargon. Misunderstanding a single term — confusing EMD with PBG, or L1 with QCBS — can cost you a contract. Here are 40 terms you'll encounter repeatedly.

Tender Process Terms

• NIT (Notice Inviting Tender) — the official announcement published by the procuring authority inviting bids.
• RFP (Request for Proposal) — used for consultancy/service tenders where technical approach matters, not just price.
• RFQ (Request for Quotation) — simplified process for low-value procurement, often under ₹25 lakh.
• EOI (Expression of Interest) — preliminary stage to shortlist vendors before issuing the full RFP.
• BoQ (Bill of Quantities) — the pricing schedule listing all items/activities with quantities. You fill in your rates.
• SoR (Schedule of Rates) — government-published standard rates for construction works. Used as a benchmark.
• PAC (Probable Amount of Contract) — the government's estimated value of the tender.
• ATC (Additional Terms and Conditions) — supplementary conditions beyond the standard contract terms.
• Corrigendum — an official amendment to the tender document after publication. Can change specs, deadlines, or PQ criteria.
• Addendum — additional information or clarification added to the tender document.
• Pre-Bid Conference — meeting between the procuring authority and potential bidders to clarify doubts.

Financial Terms

• EMD (Earnest Money Deposit) — security deposit submitted with the bid to prove seriousness. Usually 2–5% of tender value.
• PBG (Performance Bank Guarantee) — bank guarantee submitted by the winner to ensure contract performance. Usually 5–10% of contract value.
• SD (Security Deposit) — amount retained from running bills as additional security. Often 5–10%.
• BG (Bank Guarantee) — a promise from your bank to pay the government if you default.
• LD (Liquidated Damages) — penalty for delay in contract execution. Typically 0.5–1% per week, capped at 10%.
• Retention Money — percentage withheld from each bill, released after defect liability period.
• Mobilization Advance — upfront payment (10–20%) given to the contractor to start work, secured by BG.
• RA Bill (Running Account Bill) — interim payment bill submitted periodically for work completed.

Evaluation Terms

• L1 — the lowest financial bidder. In L1 tenders, the cheapest qualified bid wins.
• QCBS (Quality and Cost Based Selection) — evaluation method combining technical score (typically 70%) and financial score (30%).
• PQ (Pre-Qualification) — eligibility criteria bidders must meet before their bids are evaluated.
• TQ (Technical Qualification) — technical evaluation of the bid's approach, methodology, and team.
• Bid Validity — period during which your bid price must remain firm. Usually 90–180 days.
• LoA (Letter of Acceptance) — official communication from the procuring authority accepting your bid.
• PO/WO (Purchase Order / Work Order) — the formal order to commence supply or work.
• AoC (Award of Contract) — the final contract award notification.
• RC (Rate Contract) — pre-negotiated contract with fixed rates for a specified period (1–2 years).
• RA (Reverse Auction) — online auction where bidders compete by lowering their price in real time.

Regulatory Terms

• GFR (General Financial Rules) — the master rulebook for government financial management, including procurement (Chapter 6).
• GeM (Government e-Marketplace) — national online marketplace for government procurement.
• CPPP (Central Public Procurement Portal) — the portal at eprocure.gov.in for central government tenders.
• DSC (Digital Signature Certificate) — electronic identity certificate required for online bid submission.
• DLP (Defect Liability Period) — period after project completion during which the contractor must fix defects at their cost.
• Force Majeure — unforeseeable events (natural disasters, wars) that excuse non-performance.
• Arbitration — dispute resolution mechanism outside courts, as specified in the contract.
• Blacklisting — banning a vendor from government tenders for fraud, non-performance, or violation of terms.