How to: Analyze a tender request
Once you’ve put in your expression of interest, it’s time to thoroughly analyze that tender request. This is a vital decision to make; determining whether it’s in the best interest of your organization to put in the work on an official tender response depends on a variety of factors. You need to determine whether or not the tender on offer is a good choice for your business, if your organization can indeed get the job done, and whether to invest more time and money into the process of developing a competitive tender response.
Developing that official tender response can be a time, resource and money. Certain ISO systems like 9001 will help to streamline the process, no doubt, but there does remain a large mountain to climb before you submit your official response. Also important to consider is the detrimental impact of abandoning the development of a tender at a later stage, which can have serious consequences for your business, particularly small-to-medium sized business.
Things to consider in the Tender Analysis Checklist
-What goods or services is the buyer seeking to purchase?
-What are the evaluation criteria?
-What are the key dates?
-What are the submission requirements?
-Do any key section of the tender specification need highlighting for further discussion or clarification?
About the buyer
• What are the buyer’s key requirements?
• Does my business have any existing business relationships with the buyer?
• Does the business understand the policy environment that the buyer operates in?
About your business
• Is the tender a strategic fit for your business?
• What are your business’ strengths? What are your competitor’s strengths?
• Can you demonstrate a track record of previous successful tender delivery?
• What is your initial estimation of cost to bid for this tender?
• What is your potential profit from winning the tender?
• What resources do you require to bid and deliver a winning tender?
We’ll sum up this article with a few key tips while analyzing a tender. If you can’t deliver, don’t bid is without doubt the most important point to drive home here. Whilst yes, it may be profound to your business if you are ultimately awarded that tender, if you’re new to the game, haven’t worked on a project that large before, or don’t currently have the expertise or resources to complete that project, don’t bid. Detriment far outweighs the positives here, and you don’t want to spent weeks drawing up a tender response if your business is unqualified for the job; your time is better spent on other things.
Don’t assume that existing suppliers will automatically win the tender when a contract comes up for renewal. Make sure a contract notice represents a genuine tendering opportunity, rather than a request for quotation; this will save you embarrassment and countless hours drawing up a comprehensive proposal that could have been a few-pages of quotations. Don’t take on too many tender opportunities at once. It’s far better, and far more likely to actually win tenders if you’re putting 100% of your organization’s efforts into winning a single tender, rather than spreading your staff and your resources too thin. This will shine through in the decision-making process, as companies that have put their maximum effort into their proposals will be far better received from tender coordinators. Check the size of the contract and compare this to your turnover. This can be useful considering if the contract value is more than 20% of your business’ turnover, it could actually be used against you in the assessment of your tender response; they want to avoid risk-taking.
If applicable, consider nominating a staff member to scout for tender opportunities. The next stage of this process is for that person to determine whether projects will prove a sound return of investment, and whether or not the opportunity fits with your business’ long-term strategy; known as ‘loss leader tendering’ this strategy gives you access to a new market, as well as the forging of new relationships with potential customers. The last tip we can offer up is to be aware that the process of putting in a new tender bid will put a strain on both your staff, and your resources, so exercise some discretion when looking and applying for tenders, as both parts of the process are extremely resource-intensive.