When bidding for contracts there are two main types of procedure: restricted and open, also known as the one- and two-stage processes. We discuss the move in the bidding world to the 'one-stage process' and the pros and cons of both approaches.
The more traditional ‘restricted procedure’ includes an initial pre-qualification questionnaire (PQQ) or selection questionnaire (SQ) stage to select a handful of firms to go through to the tender stage: this questionnaire is typically used to exclude bidders who do not meet a certain threshold. The successful companies will then be selected following the second stage – the tender.
The ‘open procedure’ or ‘one-stage process’ incorporates both the questionnaire and the tender documents at the same time, meaning companies are evaluated across the board at one single stage. Currently, both methods are used within competitive tendering, however the move is towards the one-stage tender process.
The restricted procedure
This is the more traditional two stages. The questionnaire stage in the restricted procedure will typically ask for all your company information, financial accounts, relevant memberships or accreditations you have in place, and references or case studies. This is usually presented in a pass/fail format and is designed to exclude bidders who are not suitable or who cannot deliver the contract in question.
The two-stage process can be seen to save authorities time and money, by eliminating the majority of companies at the first hurdle, rather than having to evaluate lengthy tender submissions by companies who are not suitable for the contract.
A strong PQQ or SQ document can lead what happens at the tender stage. Authorities often provide a draft tender document throughout the procurement process, but it is common that ideas presented by contenders in the first stage of the process can then guide the tender document content and what the buyer is looking for. This is an advantage if you are the top bidder at the PQQ stage and have an element of early involvement in the contract.
The process is more time consuming for the bidder, as evaluation periods of two stages can take longer – usually 4 weeks for completion of the PQQ, then an evaluation period, then another 4 weeks for completion of the tender, and another evaluation period to decide upon the successful organisation.
The two-stage process may exclude some SMEs from bidding if there are high minimum requirements in place, which goes against the government’s bid for transparency and access to more contracts for SMEs.
The open procedure
Inviting all bidders to complete the questionnaire and tender submission at the same time is becoming increasingly common, as contracting authorities try to streamline the bidding process. In reality, single stage tenders can become a larger undertaking as evaluators have lengthy bid documents to mark for each contract, which involves larger project teams.
The open procedure is a quicker process for your bid team as you can tackle the bid submission in one go, although it may be lengthier. You can allocate time and resources (and have cost certainty) at just one stage, rather than having the uncertainty of two stages and timescales that can be quite vague.
The open procedure is more inclusive, as all bidders get the chance to complete a tender submission, allowing you to put forward your ideas for delivering the contract and really sell your company. In specific sectors, such as the construction industry, this process is more inclusive for contractor selection and construction projects.
It can be time consuming if you are bidding for a contract that may have high competition, as you won’t be excluded at the first stage so will have already spent resources on the whole bid.
The evaluation period can be quite lengthy as the number of tender bids is not contained to a small group – it may take the evaluators longer than expected to mark all the tenders received and award the contract.
For support with either a PQQ, SQ or tender document contact our bid team today to discuss the ways in which we can support you to secure more contracts.