What does the term tender in business mean?

What does the term tender in business mean?
When a person or business wants something done by another business, then the normal way of doing this is to make a number of businesses compete for the work.
This is done by going out to tender. The work to be done is specified in a document (a tender) and bidders are given a fixed time to reply to the tender specifying how they are going to do the work and how much they will charge.

The bids are all opened on the same day and a contractor chosen and engaged for the work.

This is the normal tender process (very much simplified)