To win tenders you should understand what goes on behind the scenes from the buyer’s side. This post follows on from our previous one entitled How a good Request for Tender (RFT) Document is Designed
Once the RFT has been approved by internal parties it can either be released publicly (e.g. on a government tender site or newspaper announcement) or specific organisations are invited to participate which is also known as a select tender. There may be a process of elimination before the RFT is released where suppliers are requested to submit a subset of information to ascertain their suitability to take part in the RFT process. To suppliers who’ve made it past that process (refer to blog article on “getting in the door”) the RFT documents are sent out. Confirmation of suppliers’ intention to participate is usually requested within a number of days of the documents being released.
A supplier briefing is not an uncommon next step when the requirements are large and complex. This gives suppliers an initial chance to review the RFT documents and to come armed with their questions (see blog article on “how to behave at the briefing”) and gives the buying organisation the chance to clearly explain their requirements.
Whether or not there’s a briefing, suppliers will then have a set amount of time to ask their questions. Questions are compiled and those whose answers aren’t specific to the asking supplier are anonymised and the responses sent to all. This is so that no suppliers are unfairly disadvantaged as a result of not having pertinent information.
Proposals are then received and opened after the submission deadline. Often the pricing section is removed and the remainder distributed to the evaluation team. The rationale behind doing this is that often opinions are influenced by proposed cost and it is a very real temptation for procurement folks to just flick right to the pricing section to see what sort of savings they could achieve as a result of the proposals given that their performance is in part measured by savings.
Using an evaluation template, each of the evaluators scores the responses to each of the questions numerically (on a scale of 1 to 5 for example where 1 is terrible and 5 is excellent. Most RFTs include some minimum criteria which, if a supplier fails to meet, their response is discarded. Some examples are financial stability, adherence to certain quality standards or agreement to our proposed contract.
These scores are then tallied up to show each supplier’s total score against each of the weighted evaluation criteria. The weightings are important – here’s an illustrative example to show why:
|Evaluation Criteria||Weighting (Scenario 1)||Weighting (Scenario 2)|
|Experience in providing the goods/services||10%||40%|
|Understanding of our organisation||10%||40%|
|Cost effectiveness of the offer||50%||10%|
Scenario 1 might be something like office supplies – we care about cost the most because the products are pretty standard across the big suppliers.
Scenario 2 could be for a marketing contract where it is really about their understanding of our organisation and their relevant experience.
So the same type of responses wouldn’t achieve similar scores in these two RFTs because if, for example, you had really good geographic coverage, it would matter a lot to your score in scenario 1 but hardly at all in scenario 2.
During evaluation of responses, often evaluators will compile a list of questions for each participating supplier where clarification is required on your responses. With the answers to these questions evaluators will then assign an aggregate score to each supplier and then rank them. They may choose to then short-list which is when suppliers with a lower total ranking are eliminated from the process and discussions continue with a few high-scoring participants. The simplest continuation of this discussion is a request for a final pricing offer but negotiations can be more holistic whereby, across the table the buying and selling parties discuss options for give-and-take to arrive at a contract and solution which suits both parties best.
The successful supplier(s) then sign the contract and that is where the competitive bidding process ends, normally until the contract ends.
Extract from the eBook HOW TO PREPARE A WINNING TENDER… From the Procurement Marker’s Perspective
Next up: How best to respond to a tender