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Digital Signatures for E-tendering

Nidhi Prasad

Simply put, ‘E-tendering’ is the process of sending and receiving tenders via the internet. From complete advertising to receiving and submitting tender-related information, the process of e-tendering is performed online. This process enables organizations to be more structured compared to old paper-based transactions which are either reduced or eliminated, facilitating a faster exchange of information.

As an initial step in the tendering process, the contractors are invited to submit sealed bids to supply specific goods or services during a particular timeframe. Once the private firm or government accepts a tender, it is legally binding for both parties. Once accepted, it means that the firm or a person who has won the bid has to provide goods and services at an agreed price at the agreed time.

The e-tendering process is designed in such a way that it assures fairness, transparency, simplicity, and auditability for the government or a particular client. For example, various procurement policies at various places guide the government in making decisions and accepting tenders accordingly.

Is E-tendering useful?

At the core, e-Tendering is a division of the process of conducting procurement online to facilitate a more efficient way of sourcing suppliers. All documentation exchanges in the process are done via the internet, from advertising the requirement to placing the contract. This process is an entirely digital framework that automates the process from start to end, allowing businesses to evaluate bids with ease and manage tenders for smoother and controlled procurement. The process of tendering has various complicated procedures and processes, unlike eProcurement software that eases the process at every step. Before any tendering processes are scheduled, professional teams must be ready with all the tendering documents checked and approved. In addition, there must be funding sources available with project financing put in place.

Employer consent is necessary to ensure the online tendering processes go smoothly at subsequent stages. The type of tendering depends on the nature of the contract, the complexity of the construction, and the expertise needed for various other reasons.

The government projects are open tenders to ensure that the procurement and works are done relatively without prejudice.

Also Read: What You Should Be Looking for in a Digital Signature Provider

How can Digital Signatures help?

Staying abreast with the technology and evolving innovations helps keep the processes simple and secure. E-tendering as a part of procurement (Electronic procurement) is the B2B, B2C, or business-to-government sale and purchase of supplies, goods, and services through the Internet and other information systems and networks, such as enterprise resource planning. E-tendering here is performed through a software application that includes robust features for supplier management and complex auctions. Many organizations use e-procurement software for contracts to achieve great benefits like increased efficiency, better cost savings (faster and cheaper), and improved transparency (to reduce corruption) in procurement procedures. E-procurement in the public sector has experienced accelerated growth in recent years. With automation in the e-Tendering system, most of the tender processes have been automated, including preparing tender specifications, advertising, tender aggregation, as well as the evaluation and placing of the contract.

Digital Signatures for an e-Tendering process are available for companies that take part in the tendering processes or want to bid electronically on the e-tender portals. A digital signature certificate or DSC is indispensable to the government and private companies. This is because a DSC not only acts as a medium for e-Tendering, but also makes the process simpler, transparent, and effortless. I

n simple terms, a Digital Signature Certificate (DSC) is a file created by a licensed Certifying Authority (CA) through encryption and is then issued for your business in the form of a USB e-Token.

A DSC is approved under the Information Technology Act, and with legal status, provides a digital way of proving the signer’s identity. It also provides high-level security for online transactions and is essential for all e-Procurement processes. Any business can now use digital certificates to encrypt information so that only the recipient can read it.

It is legally binding for all e-procurement processes to have a Digital Signature Certificate mandated by the government through the Information Technology Act. A great advantage of the e-tendering process is that the documents are uploaded centrally with the ready availability of receipts whenever needed. On the other hand, dealing with paper documents requires scanning and verification before submitting them for processing.

With increasing popularity and recognition through e-Procurement, improved transparency now marks the system. There are many advantages of using DSC in the E-tendering process. It helps overcome physical boundaries, significantly reduces costs, and helps the bidder keep pace with rapidly changing technology.

Opting for e-tendering process allows a business to sign the information digitally, provides assurance that the information for the recipient has not been modified in transit while allowing the verification of the message sent. When a business signs a particular document, the encryption here works like a 'key' (Private Key) and locks it. It secures the document, which is signed via encryption. For example, this is precisely similar to using a key in a physical lock to secure your valuables in your private lockers – which can only be opened by its own key. In addition to this, a Digital Certificate contains your identity details, viz. your name, organization's name, and email ID’s, etc., used to lock your document even further. When signed digitally, a public key resides in the certifying authority’s server, allowing the other party to validate the authenticity of the DSC.

Classes of Digital Signatures required for E-tendering

There are three main classes of Digital Signature Certificates. Class 2 digital signatures are used by both business professionals and private individuals for processes such as e-filing IT Returns, getting DPIN (Designated Partner Identification Number) or DIN (Director Identification Number), and filing various other forms with the Income Tax Department and Ministry of Corporate Affairs. Class 3 digital signatures are high-assurance certificates primarily used for e-commerce applications, procurement and e-Tendering purposes. A valid class 3 DSC is legal as per licensed certifying authorities of India, thereby assuring magnified security to file e-Tenders. Moreover, it authenticates the identity of an individual filing the Tender.

Individual (Class 3A): Class 3A certificates are issued to individuals or devices and contain a high-end online security-sensitive activity.

Organization (Class 3B): These certificates are used for signing, encryption, electronic access control, and online financial transactions, which require a strong affirmation of the customer’s identity.

An organization that participates in the e-procurement process must have a class 3B digital signature certificate to submit bids and tenders online. Their authenticity and confidentiality remain critical as it ensures that the message was not tampered with in transit.

Validity of E-tendering

The digital signature certificates are typically subject to the validity of 1 year and 2 years. These certificates must be renewed before the expiry of their period of initial issue. A Class 3 digital signature certificate can be availed in a digital or paperless format with eKYC verification method, that is, an applicant can buy DSC for e-Tender directly from the Certifying Authority.

A point to remember: The DSC should be registered only under the person's name authorized for digital submission of e-Tenders.


Businesses nowadays manage numerous procurement needs. Therefore, to avail better costing and increase efficiency, replacing traditional paper-based tender procedures with an electronically facilitated system has become an essential factor in the tendering or bidding process.

Using a digital signature solution like DrySign in an e-tendering system can facilitate automation for your business tenders and procurement management.

Learn more about DrySign

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