Concentrate on this remedy and solve a major part of your tendering problems
Don’t you just hate it when you put a lot of effort into a bid, and fail. Whether it be a Request for Tender (RFT), Request for Quotation (RFQ) or Request for Proposal (RFP), all require time, effort, and resources, and then be wasted by a mistake which causes you to lose out.
Yet most such mistakes can be overcome relatively simply by following a few rules. For the sake of simplicity, I’ll refer to all types of bids as tenders. Although there are some differences in the intent of each, they all seek an offer from you. The mistakes and how to overcome or avoid them are common to all.
Why do you need to avoid those mistakes?
It’s simple really - money, income, revenue. Government procure largely through tenders. And they are big spenders.
The NSW Government is understood to spend about billions on goods and services each year and a large proportion of these are awarded to SMEs (entities with 200 or fewer employees). The remaining smaller proportion of these contracts are awarded to non-SMEs (i.e: large entities with 200+ employees).
In each jurisdiction, the state or territory government is the largest single source of contracts.
It is not just government that procure through tenders. Businesses do also. The larger the business the more formal will be its procurement processes.
There are some differences of course. The bigger the government decision, the more likely it is to drag. The private sector is less averse to risk and typically makes their decision in a much shorter timeframe.
But the more formal the private sector’s procurement processes the more likely the same mistakes are likely to creep into respondent’s submissions. So, learning how to avoid the tendering pitfalls will make a significant difference to your business.
Preparing tenders and quotations can help you to win big orders, but it can also be time-consuming, cost money and tie up valuable resources. If you don't get the contract the money and time spent is lost, so you need to weigh up whether a tender is worth bidding for.
So, let’s have a look at the first of these mistakes and what steps you can take to avoid it.
Mistake Number 1 - Not allowing sufficient time to complete your response.
The later you leave the preparation of your response, the more rushed you will be. And the more rushed you are, the more likely you are to make mistakes.
The more complex the tender the longer period the agency will give you to respond. Typically Commonwealth Government tenders allow 25 days. State and Territory governments often allow 14 days.
And that is where the first mistake pops up. People think they have plenty of time and so they delay their initial analysis and planning. Perhaps they might have a quick read and then put the RFT to one side. But time flies in business and chaos can happen. Those weeks you thought you had suddenly become days.
So the rush starts, and with the rush:
- Analysis of the RFT is cut short;
- The opportunity for clarification is missed;
- Assumptions are made; and
- elements of the response get overlooked or forgotten.
Perhaps there is information required from another area of your organisation or from a supplier or sub-contractor. Now they now haven’t time to respond properly, to your detriment.
You may know you need some additional information and say to yourself “I’ll come back to that later.” But of course, you forget to, and there is now a hole in your tender.
And here is a small example where I made such a mistake. Referees were requested in the tender and I had an excellent referee to put forward. The only problem was he had recently been promoted and had a new telephone number, which I didn’t have. I’ll come back I said, didn’t, and missed the hole in the final check. We lost the tender.
In the debrief (always get a debrief) the main factor referred to was that missing telephone number. The assessors said that it indicated “a lack of attention to detail”. Now I suspect we were fairly close and the assessors were looking for factors to differentiate us from our main competitor. That doesn’t help much. Small leaks sink big ships.
Why did I make that mistake? Because I ignored our tendering procedure (yes, we had one) and didn’t allow enough time.
But wait, there is another critical tripwire associated with not allowing sufficient time to respond.
That tripwire is the closing time. Note that I said time, not date.
RFTs, but not necessarily RFQs or RFPs, have a specific closing time, for example, 2.00 pm Wednesday. There are usually a number of ways by which you can submit your tender; physically into the Tender Box, or electronically.
The issue is that at the specified closing time, the Tender Box is locked and the electronic mailbox is turned off.
If your submission is part-way through transmission, too bad, so sad. You are out of consideration. No excuses are accepted.
So give yourself time to avoid being cut-off in mid-sentence.
Here is what you must do.
- Write a procedure about how you will respond to an RFT. That procedure should cover:
- Analysis of the RFT and the Assessment Criteria – you must be able to satisfy the Assessment Criteria. After all, that is how the responses are scored.
- How to make a Bid – No Bid decision. Remember bidding takes time and resources. You must assess the likelihood of winning with the cost of submitting.
- Development of a response schedule. I like to use a Gantt Chart for this purpose. Prepare a template you can adapt for each new response. Remember that close-off time.
- Allocation of responsibilities – Decide who in your team should respond to which sections and who will have responsibility for co-ordinating the response, who will check etc.
- A checklist to ensure you have covered all items that must be addressed or signed in your response.
- Have a databank of necessary information you can draw upon to respond. A detailed company profile is a good place to start. There are different types on company profiles; the ones you publish and the ones that are databanks for proposals, quotations and sales letters. The latter should include:
- An organisation chart
- Brief descriptions of key personnel, their role, qualifications and experience, backed by CVs. Often you need to put the brief description in the body of the tender and back that with a CV as an attachment.
- Capability - what your business does, the problems you solve.
- Performance Management - How you do it; key processes and procedures by which you deliver the result. You can cover this under Quality Management if you have a Quality Plan such as ISO 9001
- Capacity – the skills available to deliver those results, how you recruit additional skills when required, the equipment you have available to do the job, how you support that equipment.
- Experience – virtually all RFTs want to know if your business has done similar work in the past. Sometimes this is referred to as “work of a similar nature, scope and size”. You don’t want to have to go off searching for the best examples.
- Risk management – how you identify and manage risks. Sometimes this is referred to as “Contingency Planning” – what could go wrong and how will you handle it?
- Procurement – “no man is an island entire of itself”. Businesses need suppliers and sub-contractors to deliver. How do you select them and ensure they deliver what you require?
- Meeting Government policies – Governments can be rigorous over compliance with their (ever-increasing) policies with which you must comply. They can include environmental, OH&S, Equal Opportunity Employment, Awards, Fair Work Australia.
- Insurances – depending on the job you can be required to have a range of insurance policies in place such as Public Liability, Work Cover and Professional Indemnity.
Having this information readily available will save a significant amount of time.
While rushing, people don’t rigorously analyse the requirements, and how the tender will be assessed.
Taking this step alone will make a significant difference to the success of your tendering.
There is a lot of detail here, but it is a critical first step. In your next article, I will address some more common mistakes.
Tendering is a skill that you can learn. It's like riding a bicycle or typing. If you're willing to work at it, you can rapidly improve the quality of every submission you make.
I’m working on a new online course to help people transform their success rate in tendering, while reducing the time and stress involved, and would like to build your experience into the design of the modules.
And if you would like to understand more on my approach to tendering go to www.catalysnt.com.au. You might like to download my freebie – “How to Overcome the 10 Most Common Mistakes in Tendering”.