Tender responses – why are suppliers getting better at it?

John Cole of QinetiQ Commerce Decisions (QCD) has published another interesting piece on their website around an analysis of tenders received by one of their large customers. QCD market software to support complex sourcing exercises and evaluation processes.

His analysis shows that the quality of tenders over the last 2 or 3 years has steadily increased, as measured by the (non-price) scores that the bidders received. Cole asks why this is? He believes it is down to a combination factors, including the buyers being better at explaining what is needed, and more openness about what is being sought in the responses. That is of course specific to this client, who have made improvements in the way they put together ITTs and similar documents.

I'm a bit of a tender evaluation geek, so I called John to ask him a few more questions.

John, I'm biased because I occasionally work to support firms bidding for contracts, but might it be that there are more experts working in that way on the supply side?

Interesting idea, and we don't really know the answer, but that's not something we see as a major factor! We think the buyers being more explicit in terms of what they want is the major cause of the improvement.

So is this a good thing, the increase in scores? Or does it have a negative angle - are suppliers just getting good at telling the buyer what they want to hear?

If more suppliers are putting in strong bids, then that must be overall a good thing. But the trick is to have clear criteria, without telling the suppliers the answers, as it were. We are looking for suppliers to give us confidence they can achieve the  requirements. So questions that test that ability to provide confidence, rather than "hard" requirements with "right answers" enable the buyer to discriminate in the scoring.

That all sounds very positive?

There is one concern. If the marks are tending upwards, and getting closer, it becomes harder to distinguish between bidders through the questions. Then price becomes a more important factor - in effect, the weighting for price or costs is greater if all the bidders are scoring very similar scores on the other sections.

So what's the answer to that? Decrease the weighting for costs?

You could do that, but I think it is better to look at the non-price factors and see if we can become more discriminating - ask tougher questions to really explore the suppliers' capability and solutions in more depth, which gives us the confidence I mentioned earlier. Try and get some differentiation through that route.

You think that is feasible?

Yes I do. It requires some thought and skill, but we are seeing clients who are doing this. In a sense, they look at this as a cycle of continuous improvement. If the tender is actually improving the supply market's capability, then you keep moving the bar slightly, as you might in a continuous improvement programme with a supplier.

As a digression, you know that how to score price is another favourite topic of mine. Is that still an issue?

Definitely! But that's another whole topic for another day...

Thanks to John Cole and do read his full article here.

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