We often find ourselves approached by organisations who as the incumbent provider want to defend their position and retain contracts they currently hold. They are confident in their proven track record, have strong relationships with members of the buying authority, and feel that the tendering process is just a formality, and they are in fact guaranteed the contract. The reality is often very different, and we explore how large-scale contracts such as The National Lottery act as a warning to other organisations.
Camelot has run the National Lottery since its inception in 1994, raising more than £45bn for 660,000 causes nationally including for charitable organisations, and the British Olympic and Paralympic teams. However, following the highest number of applicants since it began, Camelot has lost out on the next licence which starts in 2024.
We are in no way saying that Camelot were so confident in their abilities that their submission was not carefully thought through, or substandard in any way. However, they do evidence that just because you have held a contract for a long time, have the right experience and infrastructure, and are fully capable, the buyer will not choose you every time. Other suppliers (such as Allwyn Entertainment who have been announced as the preferred applicant) may be just as capable, have similar experience, and may in fact have some sort of competitive advantage that you have either not thought about, or overlooked due to your own confidence.
An article published by the BBC references Allwyn Entertainment Ltd’s statement following the announcement which said that its proposal was “judged to be the best way of growing returns to good causes by revitalising the National Lottery in a safe and sustainable way” and that their appointment will “breathe fresh life into the National Lottery”. This comment on the surface may appear to be superficial; however, in reality a new, fresh perspective, filled with ideas and innovation can often on paper be received favourably by buyers, especially compared to an incumbent who has taken the approach of it’s not broken so why fix it?
Below we explain why incumbents should never treat the tendering process as a formality, and why tenders are regularly awarded to alternative suppliers based on their quality proposal and pricing.
The person evaluating the tender isn’t the person you work with every day
We hear organisations regularly talking about their excellent working relationships with the contract manager, and other buyer representatives. What they often don’t realise (or choose to overlook) is that those people that they interface with every day are most likely not the ones reviewing the tender submissions. This is often down to the procurement team (or sometimes outsourced to a consultancy). They therefore don’t know that you have the contract manager on speed dial, or that they regularly comment on the quality of your service. Based on this we suggest not leaving anything out of your tender, explain everything and don’t leave the buyer to read between the lines. If you have a good relationship, talk about this, and provide evidence of how this will be beneficial in the future. It is not enough to say we work well together and leave it at that; always emphasise the benefit to the client and explain how it will benefit them.
One of our quality managers, Rachel, provides her insight on how to bid as the incumbent and successfully retain a contract here.
You still need to answer the question
We often see tender questions targeted more generally to new suppliers rather than the incumbent specifically around topics such as mobilisation. The immediate reaction of many of our clients is to brush it off as not applicable and move on. However, if you don’t answer the question and provide any detail then how can you be marked? Instead, try and approach these types of questions from an alternative perspective, explain the benefits of staying with you such as the existing infrastructure, low risk etc. whilst also explaining how the mobilisation phase can be used to embed improvements.
Just because it works now doesn’t mean you can’t improve
Once again, Camelot has been seen by some as the poster child of resting on your laurels. Rivals accused it of allowing the lottery to stagnate, with declining sales attributed to their lack of change/innovation. This idea can be applied almost universally to the tendering process, with organisations regularly telling us that they’ve been delivering a contract for many years and have no plans to deviate from their existing delivery model. Whilst this in practice may be the case, you will not be seen as competitive by the buyer if you are offering a ’basic’ service based on what you currently do, when competitors are talking about introducing innovations, cost-saving measures and contract enhancements. As such, when drafting responses try to look at things from an outsider’s perspective, using your knowledge as the incumbent to offer relevant, highly-tailored adaptions.
Whilst Camelot may have submitted a technically sound bid, someone else’s (Allwyn’s) was better. With their position as Europe’s largest lottery operator and willingness to use technology/innovation, they tipped the scales in a winner-takes-all scenario. For us, it neatly evidences why providers need to remain innovative, aware of market changes/needs, and why they need to continue evidencing this in their tenders to ensure, as the incumbent, that they retain these contracts rather than losing them to similar organisations, of a similar size, who just do things a little better.
For support in any stage of the tender process, contact our team of bid writers today to discuss how we can support your organisation.
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