Why does a tender evaluation seem to take so long?
We are asked time and time again why is there often a period following tender submission, when you as a bidder don’t hear anything from a buyer or an organisation managing a tender process, for weeks sometimes months on end. We want to dispel the myth that a buyer is just dragging his/her heels, by explaining what they will be doing from taking receipt of your bid/tender to notifying all parties of the outcome, good or bad.
Whilst an organisation is often bound by EU rules in terms of the minimum amount of time an opportunity has to be advertised and when an award notice should be submitted, the time period between taking receipt of bids and awarding contract, is pretty much at the discretion of the buyer and is often driven by the number of internal users and specialists involved, the complexity of the purchase and more often than not, risk. For example the risks to the buying organisation involved with the delivery (or non-delivery) of that contract. These risks can be considerable for both products and services, depending upon how critical they are to the running of the organisation and the delivery of it’s services to it’s customers or users.
The general rule of thumb is a procurement process takes a minimum of 6 months, some are delivered much sooner, some take longer. Not all risks and issues are identified early on in the planning process. Due to the nature of some public sector organisations such as police, health, council and education, changes in policy and processes are often dictated by central government and expected to be implemented with little notice.
It is considered best practice to include an indicative timetable within a tender document or supporting information, which provides you as the bidder, with an indication of the different steps involved and the duration of each, this is however at a high level.
A good procurement buyer will have done detailed market analysis prior to commencing their procurement and will have a fairly good idea of the number of companies that are likely to bid. However, this is never guaranteed, and some buyers are inundated with bids to evaluate and this of course adds more time to the overall process.
Commercial and Financial Evaluation
In addition to assuring themselves of a bidder’s compliance with regulatory requirements, to evaluate financial stability a buyer will ask for 2/3 years worth of key financial information including, but not limited to, turnover, profit and current liabilities. They will also complete a credit check using a credit reference agency.
If there are any concerns and/or the credit check returns a low score/risk warning, the buyer often involve their finance team who will complete their own assessment, and in some cases, ask the buyer to request a reference from your bank. This can take on average 2 to 3 weeks.
Each buyer will detail in their instructions to you how they shall evaluate your pricing submissions. Quite often, this is a comparative calculation against the lowest price – resulting in your final score ranking against the lowest price offered.More and more, a buyer will complete life-cycle cost analysis evaluations where they look at the market as a whole to determine the most economical and advantageous tender (MEAT), as well as referring to indices like RPIX. Sometimes, they will build scenarios in to an evaluation, particularly with regards service contracts where the costs of skilled labour sometimes outweighs the cost of the product for example.
For technical evaluation, which can include sample/product testing – depending on the goods/service being procured – the buyer will request the attendance of subject matter experts within an organisation to assist. For example, the purchase of office chairs would more often than not necessitate the attendance of a Health and Safety representative and possibly a handful of staff members selected to trial the product(s).
Site Visits and/or Reference checks
This can take a significant amount of time and generally involves managing multiple individuals, organising travel arrangements and chasing referees for information.
All of the above will involve a variety of subject matter experts and users from within an organisation which creates its own set of issues. For example, should an individual fall ill, in the interests of consistency and fairness, it is considered important to have the same evaluators throughout, so a planned evaluation session may have to be rescheduled.
To ensure the fair and equal treatment of all bidders, it is absolutely essential that the right people are involved at the right time and in the right capacity and the individual elements are not rushed.
As you can see, the evaluation of your submission is not quite as straightforward as some would have you believe. The majority of buyers and their respective organisations try to ensure bidders are notified of any delays at the earliest possible opportunity and understand the need for good communication.