Why SMEs should be bothered about competitive tendering

If you went into business looking for excitement, then taking part in a competitive tendering process probably wasn’t top of your list when it came to the peak experiences you might have imagined.

Not only does it not sound very interesting (and to be frank, it isn’t), but you’ve also probably heard that it involves several late nights writing the equivalent of a small novel, answering questions to which you don’t have answers, while you continue to try to run your business suffering from over-caffeinated sleep deprivation.

The good news is, it needn’t be that bad (or uninteresting), and help is at hand.

If you want to seriously grow your business with sizeable, prestigious clients, then the competitive tendering process is becoming one of the few gateways to a whole new world of achievement, success, and yes, excitement (being crowned bid winner on a large contract, with no second place for your rivals, is hard to beat when it comes to business milestones). Choose not to enter that world, and you may well be denied its riches.

SMEs are becoming more aware of the competitive tendering process but don’t yet understand the art of navigating the techniques and intricacies of tendering. They’re not always sure which opportunities to go for, and when they do, the tender process feels alien, confusing and frustrating. If they lose they’re not sure why, and they become disheartened.

We were approached by one company who had tendered for fifty contracts and not won one. Morale was at rock bottom. One of the first things we identified when we undertook a win-rate analysis for them was that they were simply bidding for the wrong contracts. When they began to evaluate opportunities more critically, they started getting their first wins.

The training events run by BidWrite are designed to help you become familiar with tendering, and to provide you with new skills and insight that will see you bidding confidently for the right type of work, with a higher chance of winning. See the end of this post for details of the Pitch Perfect workshop.

For SMEs new to the competitive tendering process, knowing what it is would be a helpful start. So, let’s do a bit of demystifying.

Competitive tendering is the formal process by which an invited group of competing organisations submit a tender (aka bid, proposal or submission) to a prospective client in order to secure a project or contract. The process differs from submitting a quote in several ways.

First, it’s the prospective client who decides what you submit. You can’t just hand them that polished sales pitch: the one that usually has clients reaching enthusiastically for their purchase order pad (in fact, you’ll often be asked not to include sales material). You will be asked to submit your proposal in a specific format, and to answer a wide range of very detailed questions, covering everything from your approach to the work, to your approach to the environment.

Second, you’ll be marked against specific evaluation criteria. Your brand new website and company brochure will have little or no effect on the decision, as lovely as they no doubt are, nor will delivering your bid with a bottle of single malt whiskey labelled ‘for the procurement manager’. The latter is likely to get you removed from the process. It all comes down to the quality of information in your bid and how competently you respond to the questions asked.

If you’re the incumbent (ie you already hold the contract), then to some extent you can draw on your glories as a model service provider with an unblemished record of going the extra mile, and this may count in your favour. I’ve also known existing providers – good ones – lose a contract by just a few marks. The European tendering model used by some large organisations can be particularly brutal.

Third – and here’s the good part – when you take part in a tendering opportunity, you’ll almost always be bidding for a large project or contract. They’re worth going for because they’re usually worth winning. For the client, it’s one of the primary reasons that the process exists. They will be spending a great deal of money on buying a project or service that is very important to them. Competitive tendering, done well – and all its many hoops through which you’ll be expected to jump – will usually find the best provider.

For SMEs, tendering for new business can be tough, but the rewards are great. A big win can launch your organisation into the next stage of its growth. It can provide security of cashflow and employment, and you can then use your new-found ‘King of the Hill’ (or Queen) status to bid for similar projects. Winning a tender opportunity is not only good for your business, it’s a validation of your people and processes, your culture and the way you work. There is well-deserved pride as well as profit for successful bidders.

More and more, the tendering process is the only way to secure large projects and contracts. If you want to secure sizeable work in the public sector, then without a doubt you will have to gear your business up for competitive tendering. Councils vary in their thresholds, but if you want their work, at some point you’ll find yourself receiving a Pre-Qualification Questionnaire (PQQ) or Invitation To Tender (ITT): the start of the tendering process.

Eastbourne Borough Council will accept a single quotation for goods, services or works under £5k. Between £5k and £50k (£100k for works), three suppliers will be asked to provide a quotation. Over £50k, goods and services will only be offered through the competitive tendering process.

As you can see, the projects or contracts can be big, but not huge, for the competitive tendering process to kick in. At Brighton & Hove Council, the tendering threshold is just £25k, and for consultancy services that drops to £10k. Both councils claim to encourage SMEs to bid for work, and both prefer to source their goods and services locally.

If you’re at the smaller end of the SME spectrum, those threshold figures may be higher than any single project or contract you could, or would want to, handle, so maybe you don’t need to turn that spare room into a bid management operations centre just yet. But consider this: smaller tender opportunities do exist for the smaller organisation, and furthermore, many of the processes, policies and documents that you’ll be required to put in place for tendering are also excellent pieces of company information for impressing any client. When a tender asks for your statement on corporate and social responsibility (CSR), as they always do, once you’ve made some formal commitments to CSR, and written it into your company’s library of great things you do, you’ll find yourself using it over and over again when pitching for work, inside or outside the competitive tendering process. Good tender content, as a rule, is good content for marketing your business anywhere.

OK, so no-one particularly enjoys putting together a tender submission. It’s hard work, time-consuming and it costs money (in time if not in actual paid-for help). And, yes, it can be a bit dull: just you, your laptop, an empty pizza box and the midnight news. But it gets easier. As you build your library of content from each tender submission, you’ll find yourself responding more quickly and confidently on every new opportunity.

And if you need a much-needed energy boost to propel you through your next tender submission, then win one. It’s a great feeling, and one that lasts.

On 12th July, BidWrite will be running a full-day workshop in Eastbourne called ‘Pitch Perfect’, organised by McCrudden Training. We’ll guide you through finding and evaluating tender opportunities, building a bid team, achieving a high win rate, and writing compelling proposals. You can find out more about the workshop and book your space here.

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