A way to distribute a bond to investors. In a competitive tender, the issuer receives bids from large companies or other investors to buy the bond issue; the highest bid receives the issue. The winner, at its discretion, may or may not distribute portions of the issue on the secondary market. The Bank of Canada uses competitive tenders to sell its bonds.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved
competitive tenderingthe system of awarding contracts for public services on the basis of competitive tenders. Private sector firms as well as public sector organizations are invited to submit tenders to provide services previously run directly by public sector organizations e.g. local authority refuse-collection. The assumption underlying this is that competition for contracts will drive down costs and encourage efficiency Competitive tendering was encouraged from the 1980s onwards and eventually became compulsory (compulsory competitive tendering or CCT) for a range of local authority services. However, CCT was abolished in 2000 and replaced by BEST VALUE, whereby local authorities are under a duty to operate services with regard to economy, efficiency and effectiveness. In most cases contracts have been awarded to the ‘in-house’ organization. Where they are awarded to an external organization it is common for most of the public sector workforce to be transferred to the contractor. See ENABLING AUTHORITY, NEW PUBLIC MANAGEMENT, PURCHASER-PROVIDER SPLIT.
Collins Dictionary of Business, 3rd ed. © 2002, 2005 C Pass, B Lowes, A Pendleton, L Chadwick, D O’Reilly and M Afferson