Avoiding the tender trap

Large organisations and local authorities are continuing to outsource some of their key services in a bid to raise standards and find economies in terms of time and money, and businesses can benefit from the opportunities this offers. However, conventional ways of selling services don’t often count, as tendering is the preferred process. So what are the do’s and don’ts of this sometimes highly complex system? Pippa Jukes, Director of Sales for cleaning and FM specialist, Nviro, offers some impartial advice.

Identifying the opportunities

The word tender has many different meanings but the Concise Oxford Dictionary gives us one that is most relevant to the business world as: ‘an offer in writing to execute work or supply goods at a fixed price’. Tendering is a formalised process of bidding for work or contracts, and it has become an integral part of the cleaning and FM sectors.
The Official Journal of the European Union (OJEU) is the most well-known and used source of public sector contracts worth over £10,000 with the UK government and its agencies. It can be found at www.gov.uk/contracts-finder – and once on the site you can search for opportunities via key words related either to the services you provide, or particular geographical locations. It’s important that you carefully consider each opportunity from the point of view of your business in terms of experience, sector, location and finances.

Impending legislation and other issues

Many contracts run over several years, so if you are being asked to offer a fixed price for the length of the contract, you need to be mindful of any regulations that may come into force while the contract is underway, as this may affect your profitability.
Things such as workplace pensions and minimum wage regulations could have a significant impact and need to be considered, as does the issue of inheriting staff. In the majority of cases, whenever a company wins a tender there will be existing employees already in place. If they are already ‘contracted out’, perhaps to a competitor, they may not transfer over via TUPE. This means you will have to ensure that contingency plans are in place to be able to supply or recruit appropriately trained staff.

If the members of staff are employed ‘in house’, TUPE may have to occur. In these circumstances you must factor in the cost of pension provision, holiday entitlements, sick leave etc., which are already included in individuals’ contracts.

Next steps

Once you have identified the opportunities that are most relevant, you need to ‘express an interest’. This may involve sending an email or registering on another web-based portal, as directed by the information on OJEU. You will then receive a Pre-Qualifying Questionnaire (PQQ), which you should complete and return for assessment.

If your PQQ is successful you will receive a Request for Information (RFI) or Invitation to Tender (ITT). This will usually outline the background, rules of tender, precise contract specification, questions and information required, and a draft contract. The information needs to be read extremely carefully to assess your company’s ability to provide the services required in light of the facts provided. This usually includes staffing details for the organisation/location; specifications for the service/contract; length of contract; machinery requirements; and other services such as provision of consumables, etc.

Also, everything is scored by a weighting/points system so make sure you know how your submission with be evaluated. It could be weighted at 40% price/60% quality, for example, and each individual question will be allocated a number of points, so it’s essential that you are aware of how you will be ‘marked’!

Your submission

This is where the core of your hard work will take place. Don’t fall into the trap of cutting and pasting general information from a ‘tender template’ – every tender needs to be treated as an individual case. Potential clients want to see proof that you understand their specific needs and have the capability to deliver the services required, so every tender submission must be bespoke to the organisation in question.

It may seem obvious – but please actually answer the questions asked of you! This entails reading and understanding each question thoroughly, and following all instructions to the letter. If you are asked for 500 words, then provide this – even if you’re just one over, your submission may be marked down or even disqualified. In some instances you may be required to complete a text box which will only allow, for example, a maximum of 500 words and will not physically allow you to enter any more than this.
The same goes for the physical presentation of the document. If a particular font is specified, then you must use it. It’s essential that you build in sufficient time to review your submission. Once it has reached a stage where you think it is complete, always give it to someone else to read. A fresh pair of eyes can help identify anything from grammatical or spelling errors, to places where alternative information could make more of an impact.

Case studies count

Making reference to work or contracts already completed, or currently underway, for clients in a similar market or physical location gives concrete examples of how you work. It also shows that your company has experience which is particularly applicable to the organisation that is the subject of the tender.

Ensure that the case studies you include are relevant, precise, clear and structured, with references and testimonials to back up your claims. Providing evidence of how you have excelled on behalf of clients is invaluable. Perhaps you have managed a successful switch from night-time to day-time cleaning to reduce costs and increase responsiveness; or you have introduced new methods, machinery and equipment to create a more environmentally-friendly cleaning regime, cutting down chemical and energy usage.
A tender submission provides an opportunity to demonstrate your company’s expertise and capabilities, and by following all the correct procedures you will increase your chances of success. Good luck!

Published in FMJ – July 2014