You have received Prior Information Notification of Contract and at first glance it seems to be the sort of thing you should be applying for, but life is never that simple. Bidding for a major contract can be a very consuming process – in terms of time, effort and resources. The cost may far outweigh the benefits gained while you end up allocating valuable bid team time that could be far more profitably and productively spent elsewhere.
There are number of pertinent questions to be asked before making such a commitment. This is determined by a bid/no-bid process which thoroughly examines key implications before you go down the tendering route:
- Does the contract fit our strategic direction and the overall business plan? If the answer is no, it’s a no-bid. If the answer is yes, then:
- Do we have a strong client relationship? If the answer is no, and it cannot be improved then it’s a no-bid. If the answer is yes, the next stage is:
- Do we have a competitive advantage? If the answer is no and the client favours a competitor then again you are looking at a no-bid. All is not lost, however. A partner may be able to improve the odds of winning. More and more organisations are looking towards mechanisms such as a Joint Venture Agreement to strengthen their contract-winning power. This could help to enhance the resources you have to offer in terms of skilled staff or an increase in critical mass that gives a commercial advantage. Finding a suitable partner can take you to the next decision step:
- Do we fully understand the client’s needs and issues? If the answer is no, but you can get access to further information in order to understand them, then yes you will wish to proceed to the next decision:
- Do we have the resources and skills available? If the answer is no and you are operating in a sector where the demand for specialist skills is high, then the likelihood of not tendering is high. However, if you have the ability to recruit skilled staff at short notice, it can influence your decision to go ahead. As described in point 3, you may decide to go down the route of finding a partner who has the skilled resource. The synergy of a partnership could be a great factor in deciding who wins the bid.
- What is the risk, and is it acceptable? The risk inherent in the contract can be defined in a number of ways but they all need to be considered before the final bid/no-bid decision is made.
Some risk may be defined as acceptable/unacceptable e.g. unlimited liability whereas other risks may need to be scored, combined with a weighting of probability; e.g. is a low price a major factor in winning this bid?
The risks involved in tendering for an overseas contract can also include serious commercial complications such as socio-political stability and currency exchange implications.
Usually, the larger the contract, the greater are the risks that need to be considered and evaluated. However, for many organisations who are bidding for a contract with a new client, the benefits associated with winning will far outweigh the risks.
The bid/no-bid process is in itself something that needs to be carefully considered before precious time and resources are committed. Executive Compass offers an informed and experienced view of the tender process, and can provide you with an appraisal of the suitability of your business to tender for a contract.
To see how we can assist your business, fill out our contact form and one of our bid team will be in touch to discuss your requirements. Alternatively you can call us free on 0800 6125563.
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Posted on 07-01-2022