In the second in his series of articles for Construction Management, bidding and tender expert David Gray shares some insights on some of the questions you should ask when considering whether to bid for a new business opportunity, and how to identify the opportunities with the highest probability of success.
Can you deliver it (and prove it)?
It is clearly very risky to bid for an opportunity that you are not sure you can deliver – a failure to deliver could have serious financial or reputational impacts for your business. But if you cannot provide evidence that you can deliver a contract, don’t be tempted to try to ‘blag it’ and bid anyway.
Procurement evaluators will quickly see through any baseless claims in your bid that are not backed up by a proven track record (evidenced by the delivery of previous projects of a similar size and scope), or by the inclusion of a detailed and considered delivery plan, demonstrating how you will fulfil the contract requirements.
Sometimes even the plan is not enough, without the proven track record, so don’t waste time and energy bidding for something you cannot prove you can deliver.
Do you have an existing relationship with the buyer?
Many companies don’t bid for anything unless they have first met with the client to learn about their business and their needs before the tender stage. This is less of a consideration when bidding for public contracts (due to open procurement processes with published evaluation criteria) but for private sector bids and RFPs, it’s definitely worth considering how likely you are to win the work without an existing relationship. Without one, it means that at least one – and possibly all – of your competitors will be bidding from a stronger position, with greater client intelligence and established connections in place.
How well do you know the competition?
If you wanted to win a sports event, you probably wouldn’t enter without first knowing what the level of competition would be like, right? So why invest time and effort in bidding for a contract if you have no idea who you will be up against?
Take the time to research the market and identify your likely competitors. What are their comparative strengths and weaknesses? Knowing this will help you shape your unique selling points and differentiators, i.e. why the buyer should choose you and not one of the other bidders. These are key elements of a strong bid and need to be well-defined to achieve success.
How important is the bid price?
Of course, the commercials will always be an important determining factor in any competitive bid process, but their weighting on the final decision will vary. If you are a high-quality and high-cost provider, steer away from opportunities where price accounts for 60% or more of the overall evaluation criteria, as this shows the buyer’s primary concern is cost, not quality.
Similarly, if you are a low-cost/budget provider, you should consider avoiding opportunities where quality is the predominant evaluation criterion, as a ‘no frills’ solution is unlikely to attract high scoring.
How profitable is the opportunity?
Try to avoid being sucked in to a ‘race to the bottom’ on price. Think about tendering a realistic price that makes an acceptable contribution to your margin, rather than being unduly influenced by what you think the ‘winning price’ may be. If the only way to win the tender is with a price that will leave you on the hook to deliver loss-making work, you are better off not bidding and focusing your efforts on more profitable opportunities.
David Gray is managing director of AM Bid, one of the UK’s leading bid specialists and creator of Ultimate Tender Coach, an online bid training programme designed to help SMEs win more public contracts.
