Guide to bidding for and winning contracts

Introduction

Almost all public sector contracts worth more than the value set in the EU procurement directives must be published in the daily supplement to the Official Journal of the European Union (OJEU – formerly called OJEC). This provides information on the current requirements and invites suppliers to express and interest, or to tender directly, depending on the contract procedure. It also sets out information about contracts that have been awarded.

There are some exceptions to this rule, including some services that do not need to be advertised – for example legal services – but most do and many departments have made it their policy to advertise more widely in the OJEU than they have to.

Tenders is an official licensee of OJEU data, updated daily, everything that is published can be found on the service.

The thresholds for the value set in the procurement directives can be found here. Remember than thresholds apply to the life of the contract, so that, for example, a contract of £100,000 over 3 years is only worth 33,000 per year.

Why Bid for Public-sector Contracts?

Public sector organisations are good customers. They have to be fair, honest and professional in the way they choose suppliers and in any dealings with them. Most are also long-standing, stable customers and have to pay in good time and in line with agreed contract terms, Public-sector organisations have to pay within 30 days (or any other agreed period) of receiving a valid bill or invoice.

Public sector organisations must try to get the best value for money. Remember that this does not always mean the lowest price, but also the quality and 'fitness for purpose' of the goods or services they require. It is important to realise that the bidding procedures are tough because they must ensure they get the best value for money for the taxpayer.

Public sector organisations in the UK include:

We're a small business, what chances do we have?

At first sight, if you are a small or medium sized business you may think that you do not have a chance to win higher value public-sector contracts. But last year, 50% of local-authority and 20% of central government contracts were won by smaller businesses. Even if your organisation is a 'micro' (10 or less employees) there is still significant opportunity: 16% of all businesses that have won EU contracts are of this size.

Also, while many of the highest value government contracts go to larger companies, smaller businesses can still play a part in these contracts, perhaps as subcontractors or by forming a consortium with other companies.

Smaller businesses can offer:

The UK government is committed to supporting small businesses, and there are many resources available to aid you in winning business.

Applying for Tenders

Below is the outline for a typical bidding process for contracts within the public sector.

Defining the procurement strategy

The public sector organisation defines its aims, decides what is needed and then prepares the business case which includes how the bidding process will be carried out. It will take into account market conditions, laws and public-sector policies.

The organisation advertises its contracts in the OJEU (and so can be found on Tenders). Advertisements should list what the organisation wants to buy, what is expected of you in terms of the information that you will need to send them, and details of how your bid will be considered. There will be important deadlines you must meet and late bids probably will not be considered.

Pre-qualification

There may be a pre-qualification stage that you are asked to go through before being asked to make a bid. If you have shown an interest in the contract, you may then be asked to send in information, such as evidence of your financial position, previous experience and references (see below, Key items to consider when making a tender). You must provide all the information you are asked for – this may be in the form of a questionnaire that is sent to you directly. The information that you provide at this stage will be assessed and a decision made on whether you go through to the next stage. If you are in any doubt about what is needed, ask.

Inviting Tenders

If the buyer is happy with the information you provided at the previous stage, the public-sector organisation asks you to put in a bid or sends you an 'invitation to tender' (ITT). The ITT is likely to include a letter giving you further instructions, a timetable showing when you should respond and a letter for you to return to show whether you will bid for the contract or not. If you find an address label or self-addressed envelope, use it to send in your bid.

You will also find details of what the organisation wants to buy, which will set out what they want you to provide, along with a draft copy of the contract terms and conditions for your appraisal. A list of criteria that explains how your bid will be assessed will also be included. If you do not receive some of these items, tell the organisation.

Invitation to tender (ITT)

If you receive an ITT, you are being asked to make an offer that the buyer may then accept. You must keep to all the requirements set out in the invitation. The decision about who is chosen is based on criteria that are usually listed in the ITT. It is important to concentrate on the most important criteria, but you must ensure that you provide information on all criteria. If you are not sure, contact the buyer. Of course, you need to ensure that your offer is competitive and represents value for money.

Evaluating and refining tenders

The public-sector organisation assesses the bid against set criteria, primarily value for money and fitness for purpose, but also criteria such as environmental sustainability and so on may be important. This stage can include a period of getting more details on the bid before it is accepted.

Awarding the contract

The public-sector organisation announces to whom it intends to award the contract. There will follow a 'standstill' period where suppliers can ask for feedback on the award decision. Finally the contract is awarded.

Putting the contract in place and understanding the terms and conditions

Buyer and supplier then work together to put things in place for the contract. You should not bid for a contract if you cannot meet the terms and conditions and it is important that you fully understand the responsibilities both sides have under the contract.

Managing the contract

You and the buyer manage the contract and your performance is checked and monitored by the buyer. The contract will be reviewed regularly.

Feedback

Whatever the outcome, you should ask for feedback on your bid and how you presented it. Under EU procurement directives, a public-sector organisation has to provide feedback. Use that information to help you to success in the future!

Key items to consider when making a tender

When making a tender is there sufficient understanding and capability to give credible answers to the following in any Expression of Interest, PQQ, Proposal or Tender? (See Tenders document types for further information).

Is there is in place the following documentation that can be evidenced in any Expression of Interest, PQQ, Proposal or Tender?

Is this tender right for my company?

The tendering process is used to help buyers choose the right supplier(s) at the best value for money and to help them minimise risk. Not only do you need to ensure that everything mentioned above is in place but you also need be confident that you can win the tender.

Is my company big enough?

As a guide, buyers will be checking that the tender contract value does not exceed 20-30% of the tendering company's turnover (this is a guide, not a rule). This is because the buyer wants to be sure the contract value will not be too much for the company to handle. The size of your company dictates the maximum size of contract it is likely to win.

Can my company meet the buyer's needs?

You may look at a contract and think that your company can do most of the work but if there are areas that it cannot manage, your chances of qualifying or winning can be seriously reduced - this may be in terms of specification, geographical location/coverage, mandatory accreditations and so on. Know about any quality-assurance standards that affect your industry and may be required.

Can I show relevant experience?

Buyers like to see that suppliers can prove they can do the job, therefore references from similar organisations for similar work are ideal. If you haven't got these, you will need to show you have 'transferable skills' from customers with similar needs.

If the work you are bidding for is not a 'core competence' (ie it represents only a small element of your company's overall turnover) it can reduce your chances of success.

Has my company got sufficient trading history?

Public sector buyers generally ask for audited accounts for the last 3 years (sometimes 2 years is enough). This means that Start-Ups are not always in the best position to win bids.

Has my company got sufficient resources, time & tendering expertise?

Tendering is time consuming – you will need to invest a lot of your time and resources to create a winning bid.

Tips and tricks for making a successful Tender

Tendering can be a complex and daunting process, but there are many ways to improve your chances. Also if, if your bid is unsuccessful, there is information as to who won the contract and why - as well as why your bid was unsuccessful. Next time round, you'll have a better chance based on your experiences.

Remember you are selling

Because large tenders are so complex (and often overwhelming) they seem more like an administrative task than a pitch for business; therefore many lose sight that tendering is merely a very formal part of the sales process: you need to sell your company and its services or products.

While you need to respond to the tender in exactly the way as specified within the tender documentation (which requires good administration and attention to detail) but it is important to remember to sell the company properly: explain how good you are, expand on how good your solution is and how it would benefit your customer.

Start early

The earlier you start, the more time you have. Also getting started early takes away some of the pressure of the task looming ahead.

Start a bid file

Get everything you need in one place for easy access and reference. This will save time in future.

Plan & project manage

Setting timescales and making sure they are met will help you meet deadlines. Plan your bid around the timetable the buyer gives you so you can make sure you can meet all deadlines.

Read the ITT (Invitations To Tender) and the instructions carefully

You can easily miss things first time around so always re-read. Also, get other members of your team to read to make sure you have not missed or misunderstood anything.

Check commercial conditions

Firstly you need to make sure you are happy signing up to their contract. Secondly there may be some important information hidden away in the conditions e.g. monthly meetings or service level agreements (you may need to respond to these in your tender submission).

Create check list

  1. Requirements – what's needed?
  2. Deadlines – by when?
  3. Responsibilities – who's doing what?

Try to understand what they really want

Most tenders want 'best quality' and 'best value for money' but what else is required? A bit of research may reveal what they really want to achieve – if you can show understanding and then meet this, you stand a far better chance of success.

Research prospect & competitors

A better understanding of the prospect and the competition always helps.

Big bids take time & money!

Be aware of this so make sure you have the resources.

Wait for the tender opportunity that is right for your company

It is a waste of time tendering for contracts that you are not going to win! Often failure is due to over-ambition and not competing on your strengths and core competencies. Ask yourself "Can we win it? Is it really our business?" Things to consider are:

If you think you might struggle to be successful, consider:

Go for quality not quantity

Being selective about the Tenders you apply for will improve your hit rates. Time is too short to waste on tenders that you are probably not going to win!

Provide the information that you are asked for

Make sure you can accurately answer all the questions and if you can't check with the buyer whether your bid will be acceptable before you send it back.

Remember to communicate!

If you are not sure of anything, ask the buyer in good time and don't miss the given deadline. If your bid is unclear and the buyer asks you to explain something, you must give your explanation by the original deadline, unless they tell you otherwise. Ask the buyer about any policies they have on quality assurance standards or anything else.

What do to if you're unsuccessful

Firstly, don't be disheartened. Remember it is a difficult and time-consuming process. Secondly review the information in this guide. Is there anything you missed, or feel you could have done better or differently? Finally, remember that there is plenty of information you can get about your bid and why it was unsuccessful via debriefing.

Debriefing

Under the EU procurement directives, buyers must debrief suppliers after they have made a bid. If your bid for a contract is not successful, you can contact the buyer and ask why. The buyer then has 15 days to provide those reasons.

Contracting authorities must let 10 days pass before officially signing a contract with a supplier. Feedback asked for in the first two days of this period must be given before the 10 days is up. Feedback asked for on the third day onwards will be answered within the normal 15 days.

If you your bid is not successful, the public authority must let you know who they are going to offer the contract to and why. Even if you're successful, it is a good idea to ask for feedback!

Finally…

Good luck in winning new business for your company! Let us know if you found this guide useful, or there is anything we could add to improve it.