The better prepared the tender, the better the chance of winning.
Hard to disagree with that statement, but then what makes for a better prepared tender?
While price has a role to play, it is only the deciding factor when all else is equal. Your task as a tenderer is to ensure that all else is not equal, and that your tender represents the best value to the enterprise wanting something done. Then you have stacked the deck!
A friend of mine is a senior engineer in a very large building contractor, one of those who is changing the skyline of Sydney on an almost daily basis.
The stress is killing him.
There is the constant need to keep the work flow of projects moving, identifying, preparing and winning tenders, then there is the stress that really kicks in as the construction side of the business tries to extract profit out of a ‘successful’ tender.
Talking to him I was reminded of Albert Einstein’s quote that ‘If I had an hour to fix a life defining problem, I would spend the first fifty minutes defining the problem, the rest is just maths’
When preparing a tender, the filling of the form is the maths. You have to get it right, all questions answered with quality copywriting, no spelling or punctuation errors, professional layout, but still just maths.
The key to winning is not in the maths, that is just table stakes, it is in the manner in which the vision of the contractor is reflected in the documents, the manner in which the tender you submit reflects value in the eyes of the judges. Each judge in the process will have a different definition of ‘Value’. The accountants will focus on cost, the engineers on the durability, regulatory and engineering integrity, the architects in the manner in which the construction reflects the aesthetic and functional innovations contained in their design, and the stakeholders in the return on investment, which is a function of both price to build and price that the construction can generate from buyers and users.
When you spend an extra $1 on the build that generates an extra $2 on the market value, the extra investment is a great one.
So what makes for a winning tender, that is also commercially successful as the job is completed?
Seems to me that the best measure is the degree to which the tenderer comes back and offers some sort of inside running for the next big project because of your performance in the last one or two
Tendering against someone who has that sort of inside running is usually a waste of time and money.
In the case of public infrastructure tenders, where price is a more important factor, you also have to manage the added complication of the nature of the bureaucratic processes and the politics of the day.
Just ask Acciona, the Spanish firm who contracted to build the Sydney light rail project, which has become another infrastructure debacle. They seem to have taken the arguably inadequate tender docs literally, failed to do their own due diligence, quoted a price and time line, then found themselves in a billion dollar slanging match with the government.
When was the last time you saw a really complicated project RFQ that reflected all the complications that evolved during the construction?
So, how to stack the deck in your favour?
Perhaps a better way of putting it is to answer the question: ‘How can I quote the highest reasonable price, and still win the tender?
Know more about the project than the principal.
Understand what is really being requested. Most tender documents are dry tick the box type things that have nothing of the ‘humanity’ to which most projects are setting out to make a contribution. Focus on the humanity, and vision, not just the yes/no questions.
Understand the ‘vision’ of the principal.
Better yet, shape the vision, so that you can shape the guidelines of the tender docs to best suit your distinctive capabilities
Have relationships with all the ‘functional Buyers’ in the process.
It is always the case that there are a variety of roles played inside a tender process. Engineering, regulatory affairs, financial, architectural, and project management all will have a differing perspective of the end result, and the best route to get there. There is also always someone with the final call, a right of veto. Understanding the nuances of these functional variations, and accommodating them in the manner in which you approach both the documentation and the informal conversations that occur is vital.
Anticipate and leverage ‘Buyers’ personal inclinations.
The ‘buyers’ in the process, in addition to the functional bias, will have personal and emotional views about the best tender. Some will be for you, some against you, some ambivalent, and sometimes there is one prepared to ‘coach’ you on the side when you are a their preferred candidate. Being sensitive to these views, and leveraging them is often of critical importance.
Identify information holes.
No RFQ is ever complete, so identifying the ‘information holes’ not only gives you added credibility, it also gives you the opportunity to get a jump on competitors
Articulate any obvious shortcomings you may have.
Rarely would a tenderer be an absolutely perfect fit for a job, there will always be compromises that can be used as objections by those who may have an alternative favoured candidate. The best way to deal with objections is to raise them yourself, and deal with them. Once dismissed in this way, they generally cease to be valid objections.
Be proud of price.
Remember the old cliché ‘Nobody ever got fired for buying IBM’? It still applies. Human beings are always concerned with their own best interests, which correlates strongly to making as few mistakes as possible. Most are wary of the cheapest price, there is always a catch, either in the fine print, exclusions, or poorer quality, so there is always room to justify a reasonable price that delivers value but not at the rock bottom.
Tenders are competitions.
As in any competitive situation, the more you know about your competition, the better able you are to address their strengths and capitalise on their relative weaknesses. A tender process is not all about you, and your response, it is also about your response relative to the others in the race.
Attention to detail.
It is so obvious that it should not be in this list, but nevertheless, is often overlooked. Spelling and grammatical mistakes abound, as do simple editing errors, inadequately or unanswered questions, and an absence of simple but elegant and memorable graphic design. Make sure you do not repeat these mistakes of your competitors.
When you lose, as is inevitable from time to time, make sure you invest the time and effort in understanding why you lost, learn the lessons so the next time you are a step ahead.
Photo: industry.nsw.gov.au
