In the Indian public procurement ecosystem, tendering is often treated as a numbers game. Organizations believe that applying to a higher volume of tenders increases their probability of success. However, this belief has led to a silent but significant cost inefficiency, what can be defined as CPTA (Cost Per Tender Application). Most companies neither calculate nor track their real CPTA, resulting in inflated expenses, poor quality bids, and extremely low success ratios.
The situation becomes even more misunderstood when businesses expect their external tendering agents to operate at unrealistically low prices, often below ₹900 per tender application. A simple cost analysis, however, clearly demonstrates why this expectation is fundamentally flawed.
Let us break down the per tender processing cost for a professional tendering agent:
• Employee Cost:
Assuming a modest salary of just ₹20,000 per month and productivity of 60 tenders per month by that employee, the per tender manpower cost comes to approximately ₹333.
• Infrastructure Cost:
Including monthly seating, internet, OPEX like computer/laptop and petty operational expenses, this adds another ₹100 per tender.
• Statutory Compliance:
ESI and EPF contributions amount to roughly ₹100 per tender.
• Miscellaneous Expenses:
Unexpected costs, internal reviews, coordination, documentation errors, and corrections add at least ₹100.
Additionally, no operation runs at 100 percent capacity. Accounting for three monthly leaves (labor leaves and national holidays) further reduces effective productivity by approx 15% every month on an average.
At this stage, the base operational cost itself approaches ₹700 to ₹750 per tender. Applying a conservative 15 percent margin, which is essential for sustainability and not excessive by any standard, the pre tax cost per tender application logically reaches approximately ₹850.
Therefore, if any agent claims to deliver serious tendering services at a CPTA lower than this threshold of ₹850, one of three things is likely happening:
- The agent is unknowingly operating at a loss, which is unrealistic and not possible.
- Statutory labor compliances are being ignored, which he can’t do.
- The team is not reading or analyzing tenders properly and are applying mechanically, just for the sake of completing the formality. Since this is the easiest escape, the doers adopt this.
So, if tenders are being applied at a cost of less than ₹850 per tender, or if an agent claims to deliver tendering services below this threshold, it strongly indicates that the bid quality and win potential are surely compromised.
Several thought pieces and blogs published on Minaions.com, (an AI platform that automates Govt Tendering Process end-to-end using AI), emphasize that tenders are not merely forms to be filled but complex RFPs that require commercial understanding, technical alignment, compliance scrutiny, and competitive intelligence.
Tendering is not a lottery. It is a ring of quality, not quantity. Unfortunately, much of the Indian tendering ecosystem treats volume as a proxy for intelligence, leading to a 99 percent failure rate and a 1 percent success rate driven largely by chance rather than capability.
Organizations that truly want to win must shift their mindset, from counting tenders applied to understanding CPTA, bid quality, and strategic fit. Quality wins bids. Quantity only inflates hidden costs.
