With the majority of large projects subject to a tender process, successfully winning contracts often comes down to one written document. Anna Mitchell explores what makes a successful bid, as well as some common pitfalls, with Millstream Associates’ Sandra Hatfield. Bids please!
Negotiating procurement processes and successfully securing contracts can be a nightmare for AV integrators. Most companies will deal with a wide variety of private and public sector companies throughout multiple regions and legislation and custom will change depending on the type of company you’re working with and geographic area you are working in.
With so many projects put out to tender it is crucial that integrators have the skills and the knowledge to persuasively and effectively demonstrate their skills and competence when answering tenders.
According to Sandra Hatfield, Millstream Associates, before you even start to construct a bid for a project you must seriously ask yourself some key questions: “Can I handle it? Do I have the right financial and technical capabilities to deliver it? Do I have the right resources? Do I understand the document and what the obligations are going to be if I win the project?”
Millstream Associates provides a range of consultancy services and products to public sector purchasers and suppliers across the world, including the provision of government portals, MyTenders for the public sector; the Tenders Direct subscription alert service for suppliers as well as a training and consultancy service for all sectors, for companies seeking assistance with new business opportunities.
“Suppliers should also do some market research and see if they can ascertain why the project has come to market. Sometimes it says it in the contract notice, but other times it may be to do with the termination of an incumbent supplier, or changes in the policy landscapes. Remember some customers are awkward to work with and you could be getting yourself in to a situation that would not be beneficial for your company.”
After deciding that it is in your best interests to bid for a contract you must then sell your company and services through what is essentially a formal and technical document.
“The first thing to remember is this is not about you,” says Hatfield. “It’s about the buyer or the commissioner. Talk about them first and you second. A common mistake is to go straight in with the solution without considering what are the benefits of your solution to that particular commissioner.
“Your solution must demonstrate how it benefits and provides value for the commissioner. Where possible state how you would exceed the requirement.
“Unfortunately some bidders see a tender document purely as a marketing tool. In some ways it is, but it is also a document to show a commissioner that you have done your research and understand the challenges they are facing.” Hatfield believes that too often companies answer the questions they wished had been asked.
“Answer the actual question with relevant information,” she stresses.
Watching your language is important as well: “Use active not passive language. Say ‘we will do x, we will achieve y.’ Try not to use ‘shall’ or ‘might, but always ensure you are not over-committing yourself. Bidders should always be mindful of what risk obligations already exist and ones that they are creating, through the use of inappropriate language.”
Hatfield argues that, when trying to sell your company and your services, always provide demonstrable evidence.
“What does world-class organisation actually mean?” she asks. “People will say we are a leading provider in our sector. Fantastic! Now back it up.”
Hatfield suggests case studies and awards or proof of where a company has exceeded key performance indicators can demonstrate company successes and should be included in a bid where possible.
With services becoming an increasingly important portion of AV integrators’ work it’s important that companies know how to cost these accurately and fairly and it’s a lot harder to put a price on services than equipment.
“You must understand the full requirements of the service being asked for,” says Hatfield. “Don’t get caught out. Ask yourself how critical the service is. If it’s very critical then it will need more oversight, it will need more management and it’s potentially going to cost more. Identifying and understanding the potential project and commercial risks is only the starting point, you need to think beyond that to the mitigation phases.
“Make sure there is a service level agreement,” she adds. “You must know what the minimum standard of service the commissioner is prepared to accept so you can cost for it. And if you are going to improve on it then know the costs associated with that and whether those are costs that you are going to absorb or whether they are going to be passed on.”
It can be hard to find out who your competition is when bidding for work but it can also be very helpful when constructing an offer. “Commissioners sometimes hold bidder conference days either right up front before the requirement hits the marketplace or during the tender process,” explains Hatfield. “Go to those bidder days,” she advises. “It gives you a good networking opportunity and you can get an idea of other firms that you might be competing against and any new entrants in the marketplace.”
Successfully negotiating the tender process is particularly important for companies working within the European Community as large public sector projects must go through the OJEU process. OJEU is the Official Journal of the European Union where tenders from the public sector, valued above a certain threshold and meeting particular criteria, must be published.
To provide a benchmark, when this article was written, Hatfield said that, in general, supply or service contracts for central government that were above £113k (approximately €131k) had to go through the OJEU process.
“If it’s not central government then at the moment we’re currently looking at an approximate threshold of about £173k,” she adds. “There are various exceptions particularly in the defence or security market, which may mean that a project does not have to be advertised and there are new changes set to come into force. It is essential that suppliers keep up to date with the changes to the EU Directives.”
In addition to the OJEU a wide range of public and private sector contracts will be advertised through numerous channels. Services such as Tenders Direct will alert subscribers to relevant public sector opportunities throughout Europe. In the UK the Government has specified that public sector contracts worth more than £10k should be advertised and have established a resource called Contracts Finder, also picked up by Tenders Direct.
“Another approach is to look at the Enterprise Europe Network, trade magazines and newspapers,” adds Hatfield. “Particularly for contracts up to £10k, these can be a good starting point for SMEs.” It’s just as important to know where these opportunities can be found as it is to know how to bid for them.
Missing these opportunities is not a risk you can afford to take according to Hatfield. “The missed opportunity might have been the one you would have won,” she says.
“You could be talking about a multi-million pound contract. Equally for smaller companies £10k-£20k can be a lot of money. “If it’s something that, when you looked at the profile of the missed opportunity, it was the right fit and you did not bid for it then you have to ask yourself ‘why did we miss it?’ “For me that says there is a problem with your bid management process. Is not bidding for the right opportunity a risk you want to take?”
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