How a Contract Award Works

Contract awarding is crucial in contracting; it signifies the procurement process's closure and the start of the execution process. For significant projects, the contract panel will publish the details through official public media, primarily newspapers. This notice invites contractors to bid. The proposals that the contractors submit must go through a strict assessment process. After scrutiny, the panel chooses a winner with the best odds; they do this through a free, fair, and transparent process.

After choosing a winner, the panel informs the unsuccessful bidders about why they rejected their proposals; they notify the bidders of the successful applicant-the winner- backed with reasons for the verdict.

Eventually, the project owners might select the three most qualified suppliers to apply for smaller projects, inviting them to bid for that project. If only one supplier responds, they usually award the contract to them. If all the invited suppliers respond, the panel then initiates a two-stage elimination to select a single winner.

Real-Life Example of a Contract Award

Recently MTX Group Inc., a relatively unknown US company, surprised many by winning a substantial national contract worth $295.3 million. The nondescript company from Frisco, Texas, had earlier come to the national limelight when its owner announced he planned to buy the famous Dallas Cowboys sports club. The multimillion-dollar contract engagement involves tracking down people in Texas State who are infected with the Covid-19 virus.

MTX Group Inc. won the contract following a whirlwind process of bidding. The company came tops ahead of ten big-name corporations. Among the prominent names that lost the deal were AT&T Global Business Services, IBM, and Accenture LLP.

When asked to comment about the contract awarding process and whether the company deserved the mega-deal, MTX Chief Executive and founder Das Nobel declined. He, instead, directed the press questions to the Texas State public health department.

Types of Contract Awards

  • Service Contracts: These include technical assistance and study activities that a company undertakes in adherence to the CTA terms of reference. Natural or legal persons may render services.
  • Supply Contracts: These work for product leasing or purchasing. The product delivery may cover installation, placing, and maintenance elements.
  • Grant Contracts: This is a direct financial contribution in the form of a donation. It covers an action tailored to enhance the attainment of objectives of a CTA policy.
  • Cost-Sharing Contracts: The CTA and a partner sign a contract (as a symbol of a partnership and collaboration in the project implementation). Typically, the partner proposes the project to the CTA before a joint project formulates it. The administrators award such contracts using the derogation procedure.

Contract Award vs. Tender

Most people confuse a tender with a contract. A tender is a submission the service provider writes in response to a bidding invitation. In contrast, a contract is a formal written agreement between the provider and the project owner. It binds the parties to work together in executing a duty for a set time. It's the act of formally notifying a tenderer of their selection as a contract's supplier.