There is no denying that the tender market in Australia represents significant opportunities to secure new business and grow operations, but in an industry that is fiercely competitive, many businesses find succeeding through the tender process extremely difficult.
With more and more work available in the government sector, and a rapid growth in the use of tenders as a procurement method by the private sector, now more than ever it is vital that organizations learn to compete for this business.
For many, the thought of responding to a tender conjures images of late nights, anxiety and last-minute dashes to the tender box. The ‘lucky’ few achieve regular success through tenders, winning major contracts in their field. But, what is it about their tenders that win them one contract after another?
Responding to tenders is a business skill that differs from other forms of sales. Understanding the tender process, and what buyers are looking for, is the key to succeeding through tenders. Businesses that succeed in the tender process may not always be the best supplier for the job, but they are best at demonstrating their capabilities and values of their offer.
When responding to a tender, there are three areas that your tender needs to clearly demonstrate to the buyer to be successful:
- Compliance with the specifications and conditions of the tender
- Value for money and benefits of their solution to the buyer
- How their proposal eliminates risk to the buyer
The first stage of tender evaluation is to eliminate any tenders that do not comply with the mandatory requirements. These might include the specifications of the goods or services, acceptance of the contract conditions, or even the format in which the tender is presented.
Evaluators often use this early stage of evaluation to reduce the overall number of tender responses they will need to read in detail. Even minor discrepancies that seem irrelevant may cause a tender to be eliminated before it is fully evaluated.
The rationale behind this is that organizations that do not follow instructions in the tender to the letter will make the same oversights when they perform the services. Complying with the conditions of the tender and the requested format demonstrates attention to detail and that you are flexible to the buyer’s needs.
Tips for preparation:
Make sure you complete every question and request for information in the document, even if you do not have a complete answer at the time. The evaluation panel is more likely to request clarification than to accept an incomplete tender document.
Follow all instructions given in the tender for preparation and submission of your response, regardless of how trivial they seem. Even something as minor as the font in which the tender is written could have your response eliminated without further consideration.
Have someone, preferably not involved in the preparation of the tender, review your final response against the original request for tender documents to double check that it is compliant with the requirements.
Benefits to the Buyer
All too often, tenderers focus the response on their organization and solution, rather than on the buyer and what they are looking for. The result is a marketing document for the tenderer that neglects to address the needs of the buyer. The best-prepared tender responses focus on the needs of the buyer and reflect how the proposed solution fulfils these needs as well as additional benefits offered.
In the case of any government body in Australia, the overriding criteria for evaluation must be ‘value for money’, as outlined in the Commonwealth Procurement Guidelines. Value for money, however, could represent a number of different attributes in a tender. The best approach is to highlight as many benefits of your organization and solutions as possible in a range of different areas:
- Quality-control measures and processes
- Technical capabilities and qualifications
- Cost savings
- Ongoing support
- Financial and corporate stability
- Innovation, research and development etc
Try to imagine yourself in the place of the buyer, evaluating a series of tender responses and trying to determine which one offers the most value. If each of the tenders simply reflects the exact specifications in the request for tender with no additional value, the only factor that remains to make a decision from is price.
Tips for preparation:
Before you begin to write your tender response, make a list of what the buyer’s motivations are, as well as the pros and cons of your solution (and those of your main competitor’s if you know them). Use this as a guide as you prepare your tender, referring to it for inspiration as you respond.
For every statement you make, ask yourself, “So what?”. This will help ensure that all information is relevant and that you have clearly identified the benefits rather than leaving it to the reader to determine how your proposal will benefit them.
When responding to a tender, establishing why the buyer should select you is only half of the challenge. It is also important to eliminate any reasons why they might not select you. A buyer may like your proposal, but if it presents high risks, they may settle for a safer option.
To be able to eliminate risks, you must first identify what they are and the impact they will have on the buyer. Some common risks include:
- New business – an organization who has not been in business long may be considered ‘fly-by-night’ or to be lacking in experience to be appointed to a contract
- New to the government or industry sector – buyers believe that their needs are unique and like to see that you have previously worked with clients of similar size and nature in the past
- Financial capability for capital investment and cash flow throughout the contract. Poor cash flow may result in interruptions to the supply of raw materials and services to your business which will impact your ability to perform the contracted works
- Compliance with government regulations, including occupational health and safety, industry licensing requirements, workplace relations and employment policies
By identifying the risks associated with your business, whether real or perceived, you can provide further supporting evidence to ease the mind of the evaluators, such as client references, letters of support from associated organisations, insurances, work procedures and company policies. These supporting documents will eliminate reasons you may be turned down during a tender process.
Tips for preparation:
Identify weaknesses or perceived issues for the buyer with your organization or proposal and include additional material or information to overcome these issues.
Use failed tenders to find out what risks the buyer identified in your tender so that you can apply this to future tenders.
Prepare and include detailed project plans, rosters and methodologies that outline exactly how you will deliver your services, showing that you have the capability and know-how to complete the project.
The tender market is teeming with buyers looking to partner with suppliers for security services and related products. Select tenders that align with your business niche in the market and tailor your response to suit their needs and you will be able to achieve success in the tender market.
Tenders require a lot of work in a short space of time to respond, and not all businesses have the luxury of an in-house, bid-management team to take care of this task, but with careful planning and a combined effort amongst your resources, you can prepare a winning tender response that stands out from the pack.
Focus on selecting the right tenders to bid for and treat each tender as a unique proposal rather than rehashing the same response each time. Ensure that you have clearly covered the three main areas of the response outlined above, and before you know it, you will be building new business through tenders.