Types of Commercial Trading on SmartTender

The creation of the ProZorro public procurement system in Ukraine was preceded by years of development of similar services focused on meeting the needs of the private sector. We offer to understand together the differences between the various commercial tenders that take place on SmartTender every day.

Procedure Access Classification

First of all, tenders are divided into open, closed and auctions with a limited list of participants.

Open Bidding

In open bidding, tender information is available to all users of the electronic trading platform. An invitation to participate in the tender is automatically sent to everyone who is classified as a supplier of the necessary products. The tender is available for viewing on the site for everyone, but participation is possible only after a preliminary registration.

Closed Bidding

Any information on this type of tender is available only to those who are classified in the system as the supplier of the necessary products.

Auction With a Limited List of Bidders

Information on this type of tender is available only to a limited circle of personally invited suppliers. On the SmartTender.biz electronic trading platform, the composition of the auction suppliers with a limited list of participants is confidential information and is available only to the organizers.

Classification by Procedure Type

Bidding can be divided by the type of procedure. An auction can take place both for the purchase and for the sale of products. In addition to the obvious difference, there are also some logical differences in the mechanisms for identifying the winner:

Procurement — trading takes place on the principle of reduction, that is, to lower.
Sale — trading takes place based on an auction, that is, at an increase.

If commercial purchases are a way to save money and clean up the expenses of a company, then commercial sales online are a fundamentally new highly effective sales market that does not require advertising costs.

Classification by Purpose Procedure

Now all commercial trading on the site can be divided into several main groups according to the purpose of such a procedure.

Auction

This type of tender is intended directly for the selection of a supplier of products or services. An invitation to participate in a tender is automatically sent to all suppliers who are classified by the system as suppliers of the necessary products. They also all see the best price to enable bargaining.

Market Analysis

This type of tender serves as a tool for analyzing the market, prices and offers for goods, works or services. Price is not displayed to participants. The customer is not obliged to choose a winner, because he conducts tenders to understand the current prices on the market.

Multi-Stage Trading

This tender takes place in several stages: market analysis, prequalification and (for those who have passed the two previous stages) an auction with a limited list of participants. The mechanism is used for procurement with a difficult technical task. Thus, the selection of the supplier is more thorough.

Bidding by Rating

Bidding by rating takes place in the same way as a regular auction. But instead of the best price, suppliers see only their place in the ranking among other counterparties. This fuels competition and helps set better savings.

The winner of any tender is the supplier whose proposal is recognized as the best according to price and non-price criteria by the customer’s tender commission. All contractual relations between the customer and the supplier are carried out outside the electronic trading platform.

Summarizing

Commercial tenders are a complex and developed ecosystem that greatly simplifies the search for reliable contractors and attractive prices for private Ukrainian companies. The system also helps to find fundamentally new directions of growth and expand the market.