Tender glossary: procurement terms every energy bidder meets
Plain-English definitions of the procurement, contract and grid engineering terms that appear in energy and infrastructure tenders, from award criteria and bid bonds to EPC, framework agreements and standstill periods.
Tender documents mix legal, commercial and engineering language, and the same idea often has several names. This glossary explains the terms that come up most often in grid, substation and energy tenders. Terms are grouped by topic and then listed alphabetically.
Procedures and notices
- Call for competition
- The public announcement that invites companies to take part. Usually a contract notice; utilities can also use a periodic indicative notice or a qualification system notice.
- Competitive dialogue
- A procedure for complex projects in which the buyer discusses solutions with shortlisted companies before asking for final tenders.
- Contract award notice
- The notice published after a contract is awarded, naming the winner and often the value and the number of bids received.
- Contract notice
- The standard announcement of a tender, with the scope, deadlines and criteria.
- eForms
- The standard EU forms for procurement notices, mandatory on TED since 25 October 2023.
- Negotiated procedure with prior call for competition
- A two-stage procedure in which shortlisted companies submit tenders that the buyer may negotiate before the final award. Common for utilities.
- Open procedure
- A one-stage procedure in which any interested company may submit a tender.
- Prior information notice (PIN)
- An early announcement of planned purchases. Utilities (with a periodic indicative notice) and regional or local authorities can also use it as the call for competition.
- Qualification system
- A utility's standing list of pre-checked suppliers, from which it later invites companies for individual contracts.
- Request for proposals (RFP)
- An invitation to submit proposals, usually for services where the method matters as much as the price, such as consultancy or design.
- Request for quotation (RFQ)
- A simple request for prices, usually for small or standard purchases.
- Restricted procedure
- A two-stage procedure: companies first apply with their qualification documents, and only those selected are invited to tender.
- Specific procurement notice
- In World Bank-financed projects, the invitation for a particular contract.
- TED
- Tenders Electronic Daily, the online version of the Supplement to the Official Journal of the EU, where EU tenders above the thresholds are published. See how to find energy tenders on TED.
Evaluation and award
- Abnormally low tender
- A price so low that the buyer must ask for an explanation, and may reject the tender if the explanation isn't convincing.
- Award criteria
- The factors used to choose the winner among qualified bidders, with their weightings, for example 60% price and 40% quality.
- Clarification
- A question from a bidder and the buyer's answer, shared with all bidders; or a question from the buyer about a submitted bid.
- Debriefing
- An explanation from the buyer of how a bid was scored and why it did or did not win.
- Life-cycle cost
- The total cost over the life of an asset, including purchase, installation, energy losses, maintenance and disposal. Common in transformer tenders, where losses are capitalised.
- Most economically advantageous tender (MEAT)
- The EU term for the winning tender, chosen on price or cost alone or on a mix of price and quality.
- Selection criteria
- Minimum requirements a bidder must meet to be considered, such as turnover, references and certificates. Also called qualification criteria.
- Standstill period
- The waiting time between announcing the intended winner and signing the contract, during which other bidders can challenge the decision. In the EU at least 10 calendar days when the decision is sent electronically, and longer when it is sent by other means; in World Bank projects generally ten business days.
Contracts and money
- Advance payment guarantee
- A bank guarantee that protects the buyer if an advance payment has to be repaid.
- Bid bond (bid guarantee, tender guarantee)
- A guarantee submitted with the tender, which the buyer can call if the bidder withdraws or refuses to sign.
- Bid validity
- How long the tender must remain open for acceptance, counted from the submission deadline.
- Bill of quantities (BoQ)
- A list of items and quantities that the bidder prices, used for works contracts.
- EPC
- Engineering, procurement and construction: a turnkey contract in which the contractor designs, buys and builds the whole installation.
- FIDIC
- The International Federation of Consulting Engineers, whose standard contract forms (such as the Yellow Book for plant and design-build) are widely used in infrastructure.
- Framework agreement
- An agreement that sets terms and prices for purchases over a period, with individual orders (call-offs) placed later. Utilities may conclude them for up to eight years, save in exceptional cases.
- Liquidated damages
- Pre-agreed amounts the contractor pays for delay or for missing a performance guarantee, usually capped at a percentage of the contract price.
- Lot
- A part of a tender that can be bid for and awarded separately.
- Performance guarantee
- A guarantee securing the contractor's performance until completion or the end of the defects period.
- Price adjustment
- A formula that changes the contract price with indices for metals, labour or inflation. Important for cable and transformer supplies.
Grid and equipment terms
- AIS and GIS
- Air-insulated switchgear, where air provides the insulation (high-voltage AIS is usually installed outdoors), and gas-insulated switchgear, enclosed in metal with an insulating gas, which needs far less space.
- Bay
- One circuit position in a substation, such as a line bay or a transformer bay, with its breaker, disconnectors and instrument transformers.
- DSO and TSO
- A distribution system operator runs the networks that carry electricity to consumers, mostly at medium and low voltage and in some countries also at high voltage such as 110 kV. A transmission system operator runs the high-voltage transmission grid.
- FAT and SAT
- Factory acceptance test, at the manufacturer's works, and site acceptance test, after installation.
- HV, MV, LV
- High, medium and low voltage. The exact ranges differ by country and company; tenders state the voltages that apply.
- Protection and control
- The relays, control systems and communication that detect faults and operate the switchgear.
- Type test
- A test on a representative unit that proves a design meets a standard, such as an IEC standard. Tenders often ask for type test reports from accredited laboratories.