Bid Or No Bid?

We are delighted to welcome this guest post from Jon Milton, Director at Comensura - the supply management specialists who manage the supply of temporary, permanent and consultant labour.

I often hear of organisations that are shocked that very few or even in some cases no bidders have responded to their procurement exercises. Within this article I hope to provide an insight into some of the reasons behind this from a bidder’s perspective.

Whenever a bid passes our door we have to make a decision on whether to respond to it. There are a number of variables that have to be considered. These include:

  • Have we met the customer?
  • Scope of the bid and services required
  • What other bids have we got going on?
  • What is the value of the opportunity?

Generally speaking, bids are not formed of standard responses. Some of the text used to respond to a question may be drawn from standard text of course, however responses have to be tailored to the individual requirements of the organisation and therefore the process of putting a bid together requires significant time and effort from the bid team. Most bids require a review of legal terms which involves not only resource from the legal team, but also commercial input at a senior level. Pricing also requires input at a senior level. Each opportunity therefore has to be weighed up on the expected chance of winning, and some tenders will invariably be ‘no bids’.

Have we met with the customer?

Bidding without having met with the customer is probably the most risky thing that any bidder can do. Tenders do of course outline a scope of requirement and required outcomes but these are open to interpretation. Bidders are also able to ask questions at tender stage, but again these are based on interpreting requirements. Imagine buying a car or a house – would you do so without having driven the car or visited the house? Of course not, and the same principle applies for bidding.

A meeting is highly recommended as it enables the bidder to gauge the level of interest and understand whether they have a realistic chance of winning, and it allows the buyer to understand the bidders’ capabilities better. Meetings really have to be of a decent length as well (at least an hour) and one-to-one with the buyer. The one-off sessions where all bidders are invited to hear from an organisation are at least something, however bidders often feel inhibited and unwilling to talk freely as they are mindful of the competitors around them. Short meetings are also real turn-offs, as they give little time to explore requirements and often feel as though the buyer is going through the motions.

If there has been no meeting it’s likely that your requirement will fall down the pecking order in terms of importance and you may find that some bidders will not submit a bid at all.

Scope of the Bid and Services Required

This is fairly self-explanatory – if the scope of the bid and services required fit comfortably with the bidders’ services and an initial meeting has taken place then it is likely that a bid will be forthcoming. If no meeting has taken place and there are no other bids to compete with, a bid may be submitted but as above if there are other more promising bids available to work on where some form of pre-tender engagement has taken place, these will take precedence.

What other bids have we got going on?     

With finite resources and budgets, every bidder has to make choices. An unknown for you will be the other bids in play at the same time as you have issued yours so bear in mind that some bids will inevitably take precedence. Consider timings as well - in my experience a lot of organisations release bids just prior to summer holidays and Christmas - invariably this may impact a bidders’ decision to bid for your business and also potentially the quality of the bid. Plus, for public sector organisations, a significant volume of tenders are released around three months after a new framework has been let, thus creating a lot of competition for bidders’ efforts. Organisations have to be mindful of when they release bids in order to maximise response levels.

What is the value of the opportunity? 

Tenderers instinctively assume bidders don’t submit bids if the value of the bid is low or relatively low. Although contract value does play a part, the most important factor in play for a bidder is  meeting prior to the tender being issued and the scope of requirement. There would be a greater likelihood of wanting to bid for a £2m contract where upfront engagement has taken place than for a £10m contract with no engagement. If you are concerned about the attractiveness of your tender requirement in terms of financial return, then you may want to consider other ways to increase value to bidders, such as longer contract terms. Bidders also consider the strategic importance of tenders, so a relatively low-spend contract could be a valuable gateway into other areas of the organisation, if it presents opportunities into an organisation’s supply chain or a new market.

 

The key advice is to engage with potential bidding organisations, be open to discussion and seek a bidding approach that maximises the opportunity of working with your organisation. Again, this is self-explanatory - clearly any bidder will gravitate to the tenders that they think they are able to win.

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