I’ve written elsewhere about what a bad system I think tendering is. You pay more, because suppliers have to add their bid-writing costs to their bids, and not just once but to cover all the ones they don’t win. And you can’t really judge a supplier by their tender, it’s just a glossy document. And often the procurement department are buying something they don’t really understand, or are not qualified to judge, – and they are buying largely on price, which might be a false economy. (I have had training departments phone me up in despair because they have having useless cheap trainers forced upon them, and they know it’s just going to waste everyone’s time). Plus, you’re only choosing from the desperate ones – many good suppliers don’t need to enter the expensive and random tendering game, so they don’t. (I am lucky enough to be one of those nowadays).
But tendering exists and is unlikely to go away, so here are some thoughts about it, which I hope you’ll find interesting…
I have seen lots of ways that the edges get blurred. I’d better say that these are all bad, you really shouldn’t do them. But I thought it would be fun to list the ones I’ve seen. And by the way, this is not a list of tenders I’ve won, many of them are ones I’ve lost.
- Track record – some procurement departments feel that track record cannot be taken into account when reviewing a bid for a new contract. The bid must be taken on face value, as true, otherwise what’s the point, you may as well pick the supplier you like. So even if you know they lied last time, and the marvellous promises in their bid didn’t materialise once they won the contract, you have to believe them again this time. I can see the logic, but it seems rather a shame that track record counts for nothing! But the question is “How do you factor it in without destroying the process?”
This track record thing is quite close to my heart – I lost a regular client because their new incoming bid looked better – HR knew it was impossible to deliver that much, to a high quality, for a such a cheap price – the bid was basically lies – but they said that Procurement had to take the bid at face value, even though HR felt sure that mine, which looked slightly less good on paper, would really be delivered, because I’d already been doing that for them for the last few years. And sure enough, the new people won the contract and then didn’t live up to their impressive bid.
- One hopes that the internal customer department (in my case usually HR or training) might put some pressure on the procurement team to choose the person who HR think is the best, as opposed to the cheapest. The amount of pressure that can be applied varies a lot from one organisation to the next. Certainly it didn’t happen in the above case!
- There are often weightings, maybe 60% price and 40% quality. But actually, how is that percentage worked out? Because if someone is £100 cheaper, you still have leeway about how you convert that to a weighted number. And how do you assign a number for better quality – is it 100 vs 20 or 100 vs 90, …which you then multiply by the 40%? So I’m thinking that the client could choose whoever they really want and then prove it with numbers afterwards, if they (BAD!) wanted to massage the process.
- Defining quality is such a minefield! If you’re buying a Time Management course it’s not like a car. Although even a car isn’t just 4 wheels and some seats, there’s the driving experience – which is a matter of opinion. So it’s impossible, stupid in fact, to try to define a time management course in words, and then buy the cheapest. “He’s got to talk about emails. He’s got to be interactive,” – doesn’t tell you much about the real value of the course does it?
- Sometimes suppliers can ask the client all about the bid – what will a successful one look like? You might as well get the inside track! In some cases the questions have to then be published for everyone else, but often they aren’t, especially if you can ask them verbally – which is sometimes allowed and sometimes not.
- We found a way to get three bites of the cherry. Particularly if you aren’t allowed to ask any questions or talk to the client, so you’re in the dark. Suppose they are asking for high quality and a low price, and there are similar percentages – which one do they REALLY want? We don’t know! So a good plan is put options in the bid – good, better, and best. ‘Good’ is the cheapest solution that we are still happy to offer (there are limits to what we will do for money!) in case they are choosing on price, ‘Better’ is with some good bits added in, a good compromise. And then ‘Best’ is the ultimate solution, if they are choosing based on quality. So we can cover all of the bases. I think this a really useful technique and worth considering for all bids. Especially if you’re in the compete dark. But ideally you’d talk to them and get some sort of steer on what they really want.
- I was once shocked to be told “If you price it at X, you’ll get the job”. I was quite surprised to be given that much help, but then I had done lots of good work for them in the past, working closely together and even having fun at times – in fact I’d become almost a friend. This shows the power of building a good strong relationship with a client, over and above doing a good job.
- Moving on further from the above, I was once asked for the names of a couple of “really expensive and useless” training companies who they could ask to tender, because they wanted me to get the job. How disgraceful of them! I was actually unable to help since I only know training companies who I like.
- Another time my client divided the training into small pieces so that each piece fell below the tendering threshold (I think it was 10k). This is also probably illegal, but then I suppose it’s hard to know what has to be clumped together and what genuinely does constitute separate items of work.
- If there’s a supplier that the client wants in particular, they can write the tender document in such a way (or get the procurement dept to write it in such a way) that only one person can do it, or others will be reluctant to apply, or so that their favoured person is likely to win it. I’m still waiting for a tender that asks for a trainer who knows about Project Management AND Happiness, is based in Poole, who can ride a unicycle, speak Norwegian, and whose name begins with C…..
PS – any comments? whats been your experience of the tendering process?