Many people have the mistaken impression that responding to bids and tenders is like buying a lottery ticket: if you do it often enough, you’re sure to win at least once. This is sadly not the case.
Bids and tenders are used by large commercial organisations and governments in order to try to get the best deal from multiple possible suppliers, and (particularly in the case of governments) give at least the impression that the whole buying process is completely open, transparent and above board.
If you’re new to bids and tenders, here’s some terms you should really know:
Vendors: that’s you and your competitors.
Procurement: a department within the buying organisation that (among other things) organizes bids and tenders.
Bid, tender, request for tender, approach to market: all just different terms for the same thing. Generally the document that procurement publishes and makes available to vendors.
Bid response, tender response: the document you write and send back in response to the bid, tender, etc.
Traps for young players
You have very little chance of winning a bid from a customer that doesn’t already know you. That means that you have to use traditional sales methods (ie pick up the phone) to get to know them before they publish a tender.
If they already have a supplier that they like, they’ll probably win the bid. An existing supplier is called an ‘incumbent’, and they win about 80% of the time.
Bid responses are evaluated by people who would rather be doing something else, so in general the more extraneous material (brochures, case studies) you put in over and above what’s necessary, the lower your chance of winning.
Don’t wait until the bid is published before you start work on it. If the first you know about a bid is when it’s published, you’re probably not going to win. Once a bid is out, the customer generally won’t talk to you. This is covered by what’s called ‘probity’, which is a set of rules intended to make sure that the bid is ‘fair’. In practice, this means that you’ll have to find out what the customer really wants (which is often not fully spelled out in the bid or tender) before it’s published.
How to begin
There are some pieces of documentation that you’re almost sure to need when you’re responding to a bid, so it’s a good idea to get them together in a ‘bid library’.
If you offer consulting of any kind, get staff resumes together and try to get them to look at least similar to each other.
If you do major projects, start collecting photos and stories about them.
You’ll need your insurance and other certificates to hand.
Often you’ll need to provide copies of key policies and procedures (particularly around OH&S, but also these days anti-discrimination, modern slavery and other social goals).
When to begin
If you’re selling to government, you’ll find that all of the tender winners are published on sites like tenders.gov.au, tenders.nsw.gov.au and so on. Many of the tenders are for supply arrangements for one, two or three years, so you can pretty easily work out when they’re going to go to market next time. Make sure you’re talking to the customer well before then because (as mentioned above) once the tender is out it’s too late to try to get to know them.
Commercial organisations don’t tend to publish tender results, so you’ll have to just call them and ask when they’re likely to want to review their current suppliers, or buy a new system, or whatever it is you’re selling.
Get with the program
You should do some training. There are a number of organisations in Australia that provide this, but we recommend Shipley (www.shipleywins.com.au), because one of our directors used to work there so we know their materials really well, and they’re excellent.
You should also encourage someone on staff to join to Association of Proposal Management Professionals (www.apmp.org). They have a lot of support for bid people, including meetings (yes, in Australia), and also a certification scheme.
You might also want to buy a copy of this book “Managing Bids, Tenders and Proposals”, which gives a good framework for your bid process and how it fits into the rest of your organisation.