Tenders (also called Requests for Proposal (RFP) and Request for Tender (RFT) are a competitive formal process used to find suppliers of products and services. They give the Tenderer a selection of suppliers and options that can be compared, to best fit their requirements. Tenders are routinely used by larger companies and (pretty much always) by governments and their agencies, to provide a transparent competitive process. Increasingly, even medium sized companies are using more formal procurement processes.
What in involved in the process?
Tender processes vary a lot between Tenderers, with almost no two exactly the same. Government or corporate tenders can often be lengthy, asking all manner of details from company information to policies that can include sustainability and modern slavery. Initially there is a stage of invitation or advertising, which specifies the details of the contract to be fulfilled, as well as the details of the process. Tenderers will put their proposals together, to be completed and submitted by the due date and time. The Tenderer will undergo a process of review, then award the contract. There can be additional stages such as interviews and presentations.
Where to find them?
Tenders can be found through a variety of channels, depending on the tenderer. Government tenders at all levels are advertised, always on their own sites and usually through paid search and aggregation services, that send alerts for new tenders. Some larger tenders from private companies may also be advertised.
In many private businesses, tenders are not advertised, particularly where the services are very specific. Many of these are by invitation, where the Tenderer will contact potential suppliers and invite them to participate in the process. For these, it’s up to you to make contact and to be on their radar: their procurement team need to know who you are. It’s not uncommon that existing suppliers (sometimes long term), can be asked to tender for the contracts they have already been fulfilling, as the Tenderer seeks to compare suppliers in an open marketplace; this can be challenging and disappointing for the incumbent supplier.
Should you make a submission?
Once you have been alerted to a potential opportunity, it’s time to decide whether you should make a submission. Don’t just jump in! It’s important to spend some time making that assessment, as these processes are time consuming and will cost you money. They are also super competitive, so there is every chance you won’t be successful.
When you are making this decision, there are some things to consider:
- Make sure you have enough time for all parts of the process, particularly for the first tenders you submit.
- Get all of the tender documents from the Tenderer. Sometimes this can be daunting but you need to look over them to understand key dates and all requirements. You may read through and decide not to go ahead.
- If the documents looks too much for you to review, get help from a tender writer from the get-go.
- Look over the key criteria to make sure you fit; sometimes your company can be excluded before you start.
- Look at the application form/structure so you know what kind of information you will need to provide. These vary a lot and you may be asked for a range of systems and policies such as WHS, which means you have to factor that into your preparation time. Oftentimes, submissions are online forms to be filled with your responses. See if you can download these so you can work offline as you put it together.
- Work within your capability. Applying for a tender that is much bigger than your current business activities will not be convincing.
- Read the contract, there are lots of conditions that will impact if you want to do it.
Preparing your submission.
The tender documents will clearly specify what you need to submit, usually with very specific questions that have word limits. Common formats also include writable pdfs and spreadsheets. Make sure you are very clear on which ones need to be submitted and the submission deadline. Give yourself a day or so in advance to submit before the deadline, as these systems sometimes don’t function well under pressure.
Word and character limits can be challenging, so write your responses without attention to this at first, then edit down to the limit at the end. Sometimes the short limits can make it feel like you can’t fully describe your proposal comprehensively enough, so use attachments to support your proposal. Most tenders allow these in some format (check before you create them), such as a business plan, project plan, company profile etc.
As you are collating your information and writing responses, it’s much easier to work in an editable format like MS Word, then add into the final document once it’s ready. Editing in online forms is much more difficult.
Once it’s at draft stage, get multiple other people to read it before you do the last edit for submission.
Working out your pricing is one of the toughest parts of the process, so take your time and remember it still needs to be profitable. I have seen applicants win tenders that didn’t have the lowest price, as well as Tenderers coming back to negotiate because they liked other parts of the submission.
How to win.
There is no guarantee that you will win any submission, but there are a few things that increase your chances:
- Get ready to roll up your sleeves. Tenders take work.
- Take time to understand the Tenderer, what is important to the organisation and the criteria of the tender. Address these in your submission.
- Tenderers want to know you can actually deliver on the contract, so make sure that you show evidence that you can; this can include current contracts, size of your team or supply arrangements. For example, a local council would love to see that you already deliver to another council, as it gives them confidence. Evidence of current or past performance is much stronger than a statement saying that you are capable.
- Make sure you understand the deal-breakers and satisfy these. The tenderer is not going to take risks on you, so the essential criteria must be fulfilled. For example, WHS systems are common pre-requisites and you won’t win without it.
- Get the pricing right. This can be tricky, so go back to basics and understand your profit margins for the scale of the project. If it’s not profitable it’s not worth doing.
- Tenderers often look for innovative delivery methods that add value. Price is important but an innovative approach can help to add an edge to your submission.
- Make sure your house is in order. Your website, logo, social media profile and overall presentation to the market will be scrutinised. Make sure it’s all looking good. Many small factors that contribute 1% all up.
- Answer all questions comprehensively. That’s hard for some categories where you may not have systems in place in your business, but at the very least need to explain how your business addresses those issues.
- Choose tenders for your business that you can really win. Otherwise you are wasting your time and money.
- Show how you will take over the service and implement a takeover from a current provider. Transitions from one major supplier to a new one can be a headache for tenderers. Make sure they know you will handle it.
- Supporting documents can really help to add extra depth.
- Reporting is important. Tenderers want to know how you will report on how the contract is implemented. Tell them how.
Tenders are a proven way to win good contracts, often for larger values and secured for longer periods of time. If you feel there is potential for your business and want to try them out, get ready as they take time, preparation and commitment. And of course, don’t be afraid to get help.