Catherine Day and Associates’ Blog

GENERAL

Recently we were asked to help a large organisation with their tender response to a government agency, which prompted me to reflect on some of my previous tender experience gained as a logistics officer in the army, various sales management positions and as CEO of a civil engineering company.

Responding to tenders in itself is neither a fascinating nor particularly difficult exercise, but winning new business brings personal and corporate rewards and recognition.

Tenders are like job applications. The purpose of a covering letter and resume is different to you and your prospective employer. Often an astute employer will use the resume and covering letter as a first filter to reject multiple applicants who don’t fill the initial criteria. Similarly, the tender offeror, will reject tenders that don’t give them the information they need, in a form they can readily understand.

When you are responding to a job application, you need to cover all of the points in the selection criteria and mandatory experience, otherwise your resume will need interpretation by the employer. This is the case with tenders. It’s no good submitting a tender that doesn’t comply with the requirements of the lender document in an easily understandable form.

Why do Organisations go Out to Tender?

There can be any number of reasons for this. Some of them are:

• Statutory requirements for government departments and agencies. Where contracts are to be let over a certain dollar amount, there is a legislative requirement for them to go to public tender.

• The tender contract and extension period has finished.

• Dissatisfaction with the current supplier and a desire to research the market place for a better deal, or to force the incumbent contractor to “sharpen the pencil”.

• To find out what is available in the market place. This can be done through a registration of interest, in which the responses are used to formulate a requirement. Often called “specification by tender”.

• Desire to outsource functions. Many organisations are returning to their core businesses, to concentrate on that area which returns them the greatest profits. For instance a major retailer outsourced its in-house printing function, including personnel. Governments and the private sector are outsourcing their major non-core functions to either concentrate on their sources of revenue, or cut the costs of doing business.

• The proliferation of cost-cutting specialists. These firms examine their clients’ costs to find areas where savings can be made, and are rewarded on the basis of the amount they save. It’s really annoying, but a fact of life, if you are the incumbent supplier, doing what you think is a good job, only to find that you have to re-tender for the goods or services you provide. It also gives your opposition a chance to get a foot in the door. The moral here is to keep close to your client and regularly review the operation to ensure there are no issues left unaddressed.

Hofstadter’s Law: It always takes longer than you expect, even when you lake Hofstadter’s Law into account. Eric Hofstadter

Tender responses demand a lot of time and resources even when you are relatively well prepared. So, as every Boy Scout knows - be prepared! The level of information that some government authorities and large corporations require is phenomenally detailed and not often at the immediate disposal of the person preparing the tender, i.e., you! Vital time can be taken up searching for obscure information in the hands of others, to the detriment of preparing the solution-specific parts of your proposal.

Timing

An extension of Hofstadter’s Law is; don’t trust anyone to provide you with information you need within the time frame you need it. At the end of the day if you don’t get the tender in on time, or it is incomplete, the person who will be dodging the bullets fired by senior managers is you. If you attempt to deflect these with, “Personnel couldn’t give me the figures on time,” the response will probably be, ‘”You should have asked for it sooner”, or, “You should already have that information on hand”.

Start acquiring this information now! If you collate the information in this section, you will save yourself an incredible amount of time, exasperation and frustration. Remember, most stuff isn’t that technical or difficult, it’s just stuff, and assembling the background information for tenders isn’t difficult, just time-consuming. Along the way the bonus is that you gain a detailed understanding of many aspects of your business.

Useful Information to Have On Hand

Company Vision and Objectives

Some tenders will ask for copies of your vision statement.

If your company doesn’t have a vision, mission and objectives, you should really question where it is going and why. It’s a bit like driving without a road map. If you get where you want (assuming it you know where that is) it will be more by good luck than good management.

Annual Reports

Public companies are required to produce an annual report. Private companies must report ion, on their trading for the previous financial year to the Australian Securities and Industries Commission. Often a tender will ask you for a copy of your annual report or trading report for the previous tear. Your financial controller, or similar position, will know where to get this information, but the morning the tender closes is not the optimum time to start looking for it.

Even if the annual report is not required for submission with the tender, it is still a good source document for information about your company which has top managerial approval and you can use in your proposal. Just make sure it is up to date. Keep copies of other companies’ annual reports to see how they do it.

Company Profile

Nearly every tender requires you to give an outline of the history of the company and where it stands in relation to the rest of the industry. You would expect every company to already have an up-to-date one, but often this is not the case because of mergers, acquisitions and occasional sheer idleness.

Company profiles may be presented as outlandishly lavish annual four colour glossy reports for large public companies, or not exist at all. If you have to create one from scratch, it’s not a big task, but requires thought and time. Some headings I have been asked for are:

• Head office postal and regional address
• State office postal and regional address
• Name and country of origin of any international parent company
• When the company was established internationally, nationally and in the state
• Number of staff in company nationally
• Number and type of staff in state office
• Overview and history of the business of the company
• Number of customers both nationally and in state
• Details of audited accounts, e.g., annual reports
• The offerer’s standing within the industry
• Additional information considered relevant by the offerer

I would also include:

• Details of the products or services you provide and the benefits that accrue to the customer. In general customers aren’t interested in features, only benefits. For example a shovel manufacturer isn’t selling shovels, but holes. Stationery companies sell convenience and overall savings. If it is not written down anywhere, determine the true benefit of a client dealing with your company, and incorporate statements reflecting this into your company profile.
• Potential or typical solutions to your clients’ requirements. Include alternatives if appropriate
• Details of your annual revenue in graphical format.
• Your current capacity and room for expansion, or how you would expand to accommodate major new contracts.
• Your track record to date. A brag sheet on your largest or most prestigious clients and why they chose you. How you got to the position you are now.
• Details of your staffing in the region the tender is being sought, as well as a general statement on your national presence. Perhaps a map of Australia, if appropriate with your company presence.

It sounds like a lengthy document, but does not need to be so. I have included this information in less than three pages in previous proposals.
(This information might also be useful for inductions.)

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