Tendering can be resource intensive process businesses, especially when your bid or sales team is busy bidding for all available tender opportunities. To ensure that your resources are being appropriately allocated, it is important to make the right decision on whether or not to bid for each tender opportunity that looks suitable.
By carefully considering and selecting opportunities to bid for, you avoid the costly “scattergun” approach to tendering which not only risks unnecessary resource expenditure, but also poor results.
In developing a bid/no-bid methodology, there are a number of considerations that you can take into account that will inform a robust decision making process. Your bid/no-bid methodology can be as formal or informal as you like – as best suited to your business size and structure.
First, understand WHY you want to begin tendering…
How will successfully securing new contracts support your wider business strategy? Is it purely about increasing sales revenue? Or is it about business diversification and the ability to offer new products and services. Perhaps tendering is simply to get your current offering out to a wider/new audience with whom you have not engaged before.
We recently spoke with an organisation thathad made the decision to not tender for a specific contract in the public sector – despite there being call for their product. The reason behind this decision:this tender and the stated requirements didn’t fit their ideal business model and their profit margin requirements. They had undertakentheir due diligence and knew that it would be a waste to enter into thistender and that it would be more costly for them to deliver than the returns they would make from it. Remember, with tendering in the vast majority of cases the quotation or costings you provide are non-negotiable once the contract has begun, therefore you need to price accurately to ensure your business does deliver on its promise and returns you a profit.
This leads us onto our next point:
Do your background research
Find suitable past tenders that suit your product, service, location etc.Essentially contracts you could deliver if you won the tender.Find out more about the contract deliverables and the pricing weighting, terms and expectations. If this information isn’t listed publicly you should be able to request this information from the contracting body.
Speak with other business and organisations that have successfully won similar contracts through tendering and learn about how they dealt with the tender process and contract implementation. If you arepart of a local business support or networking group e.g. Chamber of Commerce speak to your contacts there and see if they can link you up with a suitable person/company.
Important bid/no-bid considerations:
Considerations to work through when assessing a tender opportunity can include the following (any reference to competitors below refers to those companies you are likely to be bidding against for this contract):
- Accreditations specified (e.g. ISO 9001, ISO 14001, Cyber Essentials):
– Are they mandatory or scored?
– Do you have them?
– Do your competitors have them?
– How much investment is required to achieve them?
– How long would it take to become accredited?
– Is this achievable within the contract timetable?
– Under this contract, where do your products/services need delivering?
– How does this affect your logistics and contract management?
– Will the client’s location result in increased costs to you that you have to factor in?
– Where are your competitors located?
– Does the tender opportunity allow for regional awards?
– Are certain software/hardware systems required to deliver this contract?
- – Is use of such technology a mandatory requirement or scored?
– Do you have these in your business currently?
– Is there an implementation time/cost for introducing this technology?
– Are your competitors already using this technology?
- – Is there a requirement to integrate with client systems?
– Do you have sufficient staff to service the contract if awarded?
– What recruitment/uplift in personnel numbers is required?
– Can recruitment and the required training be undertaken prior to contract award?
- – Is TUPE part of the contract requirement?
- Value of the contract:
– How does the indicative value of this contract relate to the turnover of your business? Many public sector Authorities are mindful of awarding contracts to businesses where the contract value equates to too high a proportion of the business’s turnover.
– Can you really demonstrate past experience that is relevant to this contract?
– Do your competitors have experience that is relevant to the delivery of this contract?
– Experience will be an important consideration in the evaluation and award of the contract. You will need to evidence your experience through your tender responses.
– What weighting does the pricing section have?
– What is your price position in your industry/marketplace?
– Can you bid competitively on price?
- Procurement Process:
– What procurement process is being undertaken by the Authority?
– Is it a one stage tender?
– Are there multiple stages over a number of months?
– What will the cost of tendering for this opportunity be to your business?
In the above considerations, where we refer to mandatory criteria or scored, we seek to understand whether the requirement being specified constitutes a pass or fail (i.e. if you have it you pass, if you don’t, you fail the tender process at this point regardless of other answers/responses). For scored criteria, you should seek to understand how heavily this consideration is weighted in the evaluation process and consider what your potential score in this area might be.
In addition to those areas noted above, there are many other factors you can take into consideration when assessing a tender opportunity. For those tenders that you decide to bid for, using a carefully considered approach when tendering will help to inform your tender preparation and writing.
Once you have ascertained all of the above and if you still wish to proceed with tendering for contracts you should make it priority to prepare your bid resources, see Part 2 to this Tender Ready Blog.
We have assisted clients in varying industries with preparing bid/no-bid methodologies. If this is something that you would like further assistance with, please contact us to discuss further.