Its still business as usual for buyers and providers in UK outsourcing. Whether we take Norway, Canada, Switzerland or WTO forms, the procurement principles will largely be the same.
Yes, there are frustrations in the system
Now we have the opportunity to remove some barriers
Should it ‘evolve’ or we ‘revolutionise’!
Its a seperate debate in itself. We are working closely with professional firms, central and local bodies and providers (large firms and SMEs) in capturing these frustrations. We are also pulling data under pinning the core forms of procurements.
Time to reflect on basics
Yes we see more and more cheaper solutions are chosen favourably than commercially sustainable solutions
The common perception is that when bidding for work it is all about three things: (1) price; (2) price; and (3) price. . Whilst the primary focus should therefore be on price it is not necessarily advisable (particularly for large scale procurements) to sacrifice everything at the price altar. Unfortunately, the scenario still continues and providers fall on this trap and leak money.
This article aims to examine some of the other internal deliverables which bidders should consider, to navigate their bids into the sweet spot of high quality and good value.
Bid to win
This may mean having an appropriately resourced, experienced and motivated bid team. A specific bid room may be worth setting up to allow maximum positive transfer of knowledge and expertise. A scatter-gun approach to bidding by working on multiple bids concurrently is unlikely to succeed at all. We see that happening all the time in many organisations! Identify must win bids and bid to win
Have a structured approach to customer sessions is very critical to maximise your chances of winning
Listening to your customer and understanding what they want is crucial. In any form of procurement procedures – restricted, open, competitive dialogue, negotiated procedure you will be given some form of access to customers. Be positive, constructive and realistic (albeit diplomatic) in your feedback. Building a rapport is critical, the customer (or his trusted advisor) can give you meaningful feedback which can keep you in the race. When communicating with your customer ensure you try and find a way to bring up your unique selling points and highlight matters which you know your competitors will struggle to meet or comply with. Its easy to say than do in practise with multiple stake holders involved at various stages.
Be consistent in your internal and external communication
Make sure everyone in your bid team who is submitting responses is aware of: (i) your unique selling points; (ii) target operating model (iii) writing sytles and forms. Ideally before submission it is ideal to have some time to create content which is consistent and have it independently reviewed to ensure there are no contradictions or errors. If you have printed submission, it may well be worth engaging professionals in reprographics to manage the final version of the submission. First impressions are not conclusive but they are important.
Independent Solution reviews
Bid teams have the risk of becoming an echo chamber where certain approaches or views are being re-enforced by the group. It is worthwhile therefore to
Present proposed approaches and the reasoning therefore to an independent review committee,
consisting of experienced members who are not engaged in any form on the project. This ensures that the bid team undertakes an objective SWOT (Strenghts, Weaknesses, Opportunities and Threats) and competitive analysis and has to articulate its unique selling points and overall strategy for success. Whilst the input from outsiders may not always be practical it is useful in understanding key underlying assumptions people might be making when reviewing submissions.
Rules of Engagement
Ensure the bid director and bid manager are properly empowered to make executive decisions. There should be clear timelines for responses and initial submissions. Budgets should be drawn up, approved and regularly reviewed. Responses to the bid document should be clearly identified and allocated to the requisite experts, who should also understand the key selling points and required deliverables. To the extent there are specialist third party service or goods providers, these should be identified at the outset and, to the extent possible, exclusive relationships should be agreed upon, to prevent competitors from using the same third party providers.
The party who is evaluating the bids should be aware of the assumptions and dependencies that can be ‘presumed’ into a bid.
There is often a risk, particularly with comparatively low priced bids, that some assumptions have been made, which are unrealistic or unpractical.
However once the bid has been awarded it is very difficult and time consuming to terminate the selected bidder and re-initiate the process. A responsible bidder would encourage the awarding body to specifically require bidders to set out all relevant assumptions and dependencies in order to flush out approaches which allow pricing to be gouged.
Value for Money
Applying value for money principles is both applicable in relation to the bid team itself and to the bid submission. In relation to the bid team, consideration should be given to the value added of third party expertise or third party advisors. Professional advisors should be willing to share in the risk of submission i.e. if the bid is unsuccessful their fees are discounted, but if the bid is successful, their fees can incorporate a ‘win fee’ element.
In relation to the bid, innovative solutions outside the remit of the bid documentation should be considered.
However careful consideration should be given to when this is disclosed to the awarding authority. Ideally the innovative solution should be capable of being provided by the bidding team only, but if the innovative solution is of general application then it should be disclosed at a strategically optimal time. This would be for example where the bid team have finalised the arrangements for the innovative solution, disclose it to the awarding authority with very little effective time for competitors to maximise the benefit of the innovative solution.
The Long Game
Beware that awarding authorities need bidders as much as the bidder needs to win the project. If there is only one bidder then there was no ‘competitive tension’ to realistically ensure the winning bid was value for money.
As a result bidders should consider, before crossing certain costs thresholds whether to continue or withdraw.
The relationship with the awarding authority is critical, in certain circumstances ‘suggestions’ may be provided to a bidder which can effectively guide them to improve their bids.
All of the above is not enough if the price is not right. Awarding authorities will have a number in mind and provided the bid comes in below that number, they are usually flexible.
The long term growth and benefit for bidders is often not derived from the bid as submitted, but rather from the benefits of being able to establish a trusted and helpful relationship through the successful bid.
Provided a bidder is capable of delivering, then it can be expected that the awarding authority will issue additional works and projects which will not be subject to tender and therefore more profitable for the bidder.
Thanks to Chris Nillesen for his valuable contribution to the article.
And as ever, if you would like to discuss this more, we would love to hear from you.
Please do send feedback or comments to us at email@example.com