If you’ve just joined your company’s bid team – or you’ve been tasked with compiling your organisation’s tender responses – you may not be feeling very confident at this point. In my last blog I explained the terminology you will see when you start to look at tenders. In this blog I’ll give you a run-down of the steps in a typical tender process.
First off, let’s re-cap:
A Tender is an offer to carry out work or supply goods at a stated fixed price.
Tendering (the process of making an offer, bid or proposal, or expressing an interest in response to a particular invitation for the supply of goods and services) provides a formal framework to source goods and services in a fair and equitable environment.
The formal offer made by a supplier to a client.
Tenderer (Supplier, Seller, Bidder, Respondent)
The organisation bidding for work. The client will invite bids from multiple suppliers.
Agency (Client, Buyer, Principal)
The tendering organisation.
Why is Tendering Important for your Business?
- The Australian tender market is worth over $75 billion, meaning there’s a lot of opportunity for new contracts and new clients. Tendering is suitable for all types of business, no matter how big or small.
- By winning a tender (from either government, a council or a private organisation), you can gain recognition after a single completed contract. This will provide you with further opportunities; not only with future tenders but potential new clients and partnerships.
- Tender contracts can extend up to five years or more. This means ongoing revenue and long-term business stability. Meaning, less worrying about when the next project will start and more focus on growth and opportunities.
- Having skills in tendering is essential for any manager or owner wanting to transform their business. Tendering not only requires continual evaluation, improvement, and innovation but it also allows you to consolidate your information and deliver a consistent message across all platforms of your business.
- Tendering is great a way to increase your customers and streamline your service delivery. More projects, more growth and more revenue equals more possibilities for you and your business.
Remember that it’s a competitive process, so it’s important for you to stand out from your rivals. Writing and winning a competitive tender can be a very powerful achievement!
The Tender Process
If you fail to capitalise on the opportunity, you may not get another chance – at least not for a while. Competitive tenders are often three-year arrangements with optional contract extensions. It’s in your interest to submit your best offer.
Most clients will follow this typical process.
1. Agency/Client prepares and releases their Request
When an organisation puts their work out to tender it releases a request document (or series of documents) detailing the requirements and selection/evaluation criteria.
Each tender will also refer to the Tender Conditions or Conditions of Contract. This document outlines contractual expectations and insurance requirements for potential suppliers.
Tenders are often publicly advertised, or you can sign up to a notification service.
2. Registrations of Interest are taken
To download the tender documents, you usually have to register with the organisation who has put out the tender, even if you are simply seeking information and not yet sure if you are interested in tendering at all.
This requirement is so they can inform you of changes to the tender or the closing date. It’s important to have one point of contact to receive information about the tender, and this person should be available for the duration of the process to read all emails and quickly disseminate any updated information.
3. Information sessions are held
Information sessions about the tender are valuable opportunities to ask questions, make contact with the client, and even network with potential subcontractors; so try to attend any that are offered. Information may be shared that you may not have considered. These sessions will help you to develop your bid strategy.
A key component of this step is to fully understand the requirements of the tender so that you can make the decision as to whether it is worthwhile putting in a bid for the contract; and if you go ahead, to confidently prepare a compliant tender response.
See blog: How to Become Tender Ready
4. Suppliers respond to the Tender
The next step is to assemble your bid team and prepare your tender proposal. This includes planning, writing, developing, polishing and refining it. Make sure you pay close attention to the closing time of the tender (develop your response timeline) and how it will be lodged (method, format, how many copies, etc.). Submit early if possible, to avoid issues with missed deadlines, time zone differences, last-minute hitches and technical glitches.
5. Agency/Client receives responses
The first stage of the evaluation process is where all responses received by the agency are checked for compliance with the tender documents and conditions. If you have not addressed a requirement, your submission is likely to be either rejected at this point, or you’ll receive a low score for that attribute/section which will impact on your chances of winning the tender bid.
6. Evaluation and Selection Process
Tender responses are usually evaluated by a committee. If your submission is compliant, it will be evaluated against the criteria specified in the tender documentation. The submission with the best offer will win the business. This means value for money (not necessarily lowest price), demonstrated success delivering the goods and services, and significant added value to the client.
The agency prepares a shortlist of tenderers based on their responses to the selection criteria. They may seek further information from you, such as clarification questions, a formal presentation to key parties related to the client, or a demonstration of the proposed solution. Some of these further meetings may involve price negotiations.
7. Notification and Debriefing
When a contract has been awarded, the successful tenderer will be advised in writing. Congratulations!
If you are unsuccessful, you will also be advised and many clients also offer an opportunity to separately debrief. This is a (usually) informal and confidential feedback session which may take place in person, over the phone/video, or by email.
The purpose of the debrief is to help bidders improve their competitive performance for future tenders. It will cover the quality of your submission against the selection criteria, pre-qualification criteria and the relative strengths and weaknesses of your response. The agency may also indicate the advantages of the winning tenderer’s solution. This is an invaluable chance to ask questions, address any concerns, and even provide suggestions on the agency’s process. Be respectful that the agency may not have the opportunity to debrief until after they have completed negotiations and contracts with the successful bidder.
8. Contracts and Project Implementation
Once the preferred tenderer has been selected, the Agency will enter contract negotiations. Generally, the successful tenderer will be required to enter a formal written contract with the client (in the form provided in the RFT).
The contract will outline the responsibilities of the supplier and the client. Payment will be made upon completion of the contract, or as outlined in the payment schedule. It’s wise to have your contract looked at by a legal representative before you sign. You may be excited about winning the work, but you still need to have due diligence when it comes to the fine print and signing your name or your company to the deal.
So there you have it: an outline of a typical tender process. The timeframe from request to acceptance varies for each tender and will depend greatly on the size and structure of the agency (e.g. government, local council, or private company). Of course, it’s scary at first but if you are new to tendering, remember: the more you bid, the greater your chances of success!
My Complete Guide to Tendering explains the process in more detail, along with all aspects of developing your tender bid
Download my free Tender Cover Letter, to get you started.
If you’d like to connect with a tender writing professional with almost two decades’ worth of experience, let’s organise a time to chat.
Kristine Daw is the Managing Director of Dawtek, a Melbourne-based company specialising in tenders and proposals, technical writing, business documentation, copywriting, editing and creating business templates. Kristine and her small team have a range of clients including small businesses, multi-national corporations, all levels of government and not-for-profits.
1300 DAWTEK or dawtek.com.au