A quick guide to developing a winning tender strategy

Posted by Oliver Hogue on 02/04/2015

A tender process is a bit like a long and tiring journey – if you reach your goal it seems like it was all worth it, but if you don’t, you’ve wasted your time.

A quick way to predict the outcome of your journey is to look at the tender, and ask:

  • Can we win this, do we have what it takes?
  • If we win it, can we deliver what they want?
  • Is it something we want the business to be doing?
  • Will we make money out of it?

If your answer is yes to all of these, then you should go ahead and bid. But that ‘yes’ has to be based on careful consideration, research and self-knowledge.

To simplify the tender process, here are some strategies to help ensure that your tender journey will be enjoyable and profitable.

Self-assessment and bid strategy

Any tender strategy begins with self-knowledge – knowing your business’s strengths and what sort of financial position you are in is the first step.

If you have bases in only two states, are you really in a position to bid for a nationally networked service? How likely is it that you can establish new bases in other states in the timeframe given by the tender?

Sometimes it’s better to admit you are not ready. The time and resources wasted on an unattainable goal take a toll both on your business and on staff morale.

Once you know what you are capable of, look at what the bid requires, then work out what it is that your company does that differentiates it from others.

Perhaps you are bidding for the supply of medical equipment to a healthcare service and you already have a tender to supply second-hand medical equipment to a foreign aid charity. Your bid strategy could include an undertaking to buy back old equipment from the health service to send to the charity.

A firm understanding of the timeframe and stages of the process is also important – missing a deadline for a Request For Information could have severe implications. Take every step of the process as seriously as if it is the final one.

Deal-breakers and compromises

The most rigid deal-breaker in a tender process has to be the contract. You must decide the minimum contract value you are prepared to offer.

Sounds simple, right?

But what if during negotiations with the organisation you get a strong hint that the successful bidder will be first choice for other, more lucrative contracts? Your bottom line needs to be predicated on the additional benefits that winning the bit will deliver.

Consider your staff – if you put in a bid for a contract that requires your staff to work 16 hour days, six days a week, are you going to be able to deliver? Will the cost of taking on additional staff be covered by the financial returns?

Deal-breakers can work the other way too. The contracting organisation may require proof of financial stability in the form of three years of audited accounts and a minimum amount of capital, either in the form of a guarantor or in the bank. If you don’t have that, perhaps you should bow out this time.

A flow chart will help to determine deal-breakers and compromises that may crop up during a bid – ‘If X happens, then we do Y’. Doing this means your team members know where they are when negotiations are at the pointy end. It can also help you handle scope creep.

Scope creep and how to handle it

The term ‘scope creep’ describes a project whose scope changes as it develops, either because it was poorly defined to begin with, or because it is not being effectively controlled.

Scope creep is almost always bad, because when you won the tender, you signed a contract that required you to deliver X products at Y price to location Z. Now, thanks to scope creep, you are being asked to deliver A products at B price to C, D and E!

Scope creep can become a nightmare, especially on government projects where a change of leadership can alter significant elements. To keep the tender, you may feel that you need to say yes to whatever is asked, even though it may be beyond the scope of the original contract.

 Scope creep can be avoided by building a change control procedure into the contract. This can include requesting the reason for the change, who will bear the cost of the change, and whether financial arrangements need to be altered to accommodate the change.

The perfect tender document would be like a crystal ball that predicted every possible twist and turn the future might bring.

To help guide you through your tender journey, you should consider talking to a professional tender writer before you set off. That way, having made the same journey many times before, their experience can assist you to your own destination.

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Bluegum Communication – Australia
Sydney, NSW 2000
P: 02 8018 8589
E: contact@bluegumcommunication.com