Do you know what a tender is? Why should you care?
Do you currently want to work with public sector buyers and need to complete a tender response? Perhaps you have put off securing contracts due to the sometimes confusing procurement process. Or have you lost a customer because they’re part of a consortium or group of customers who must go with suppliers out of a small group of named companies, and your name’s not on the list? What is a tender? And how do you complete a tender submission? Help is at hand, Executive Compass offer bid and tender writing services for companies of all sizes and across all industries. We’ll help to outline the tender process and exactly what you need to know to start successfully bidding for contracts.
What is a tender?
An invitation to tender document is a written request sent out to potential suppliers. This asks for information required for the buyer to then evaluate and select a preferred supplier. A tender document is the basis of a tendering process which helps a buyer select qualified and interested suppliers based on certain contract criteria. Broadly this is pricing documentation and quality criteria.
Let’s look at it from the point of view of a customer:
- They’ve got a big project to complete. This might be the construction of a retail unit, the supply of home carer services to the housebound and elderly, or grounds maintenance for some blocks of flats.
- They don’t have the capacity to do this in-house. Or perhaps they did have a construction, carer or grounds maintenance unit but have had to cut costs, leading to them outsourcing.
Sometimes, a group of companies or authorities will get together to form a consortium. Like a co-operative, they’re hoping that by getting together and advertising a huge contract, they can get better value for money from their suppliers for goods or services.
Either way, they need to choose someone else to do this work and make a formal offer. If they’re in the public sector or have a private-sector project worth over a specific amount, they are actually required by law to issue a call for tenders.
Now let’s look at it from the point of view from the company with the contract:
- The company looking to complete the project will issue a contract notice to the market. Typically, this will have some detail, for example, the scope, range, geographical location and other contract conditions of the work project, so suitable bidders understand the work in question.
- They will ask for expressions of interest, followed by more information in a pre-qualification questionnaire, followed by even more information in a tender document.
Your company and other potential suppliers will submit bids to supply this information. Some will fall at the first hurdle, others will get through to pre-qualification, and fewer still will be asked to complete the full tender response documentation. And after evaluation from the buyer, one (or more if the contract is a framework) suppliers will win the bid.
Why is the tender process marked this way?
A tender is evaluated this way to ensure transparency and fairness. All suppliers will be marked against a matrix of scores which ensure the company that offers the best value for money and products or services will be appointed as a supplier via a formal offer. This is particularly important, of course, when it comes to spending the public’s money, so it is not just evaluated on the bid price.
✓ So, what is a tender? It’s a vital way for you to win more business and get involved in more industry sectors.
What makes a quality tender submission?
As a business, you must impress the contracting authority and really stand out from the competition through innovative ideas. When it comes to tender writing, this may fall to the business development team or you may have a dedicated bid writer within your organisation. Whoever is bidding for contracts must be aware of the procurement process, and have great writing skills to complete a high-quality tender submission. To learn more about bid and tender writing, please see our video below on what makes a quality tender submission:
The importance of tenders
If you choose to ignore all projects that require a tender process, you will end up losing out on the opportunity to win bids that can keep your business busy, profitable and growing. Especially within the public sector, who have to abide by procurement regulations and use a tendering process for procuring virtually all goods and services.
If you ignore the tenders that are out there and you’ll be constricting the amount of new work you gather, and you’ll possibly lose customers to the tendering process, too.
Executive Compass can support you with the whole tendering process, through education, training and a full bid writing service for your tender submission. Contact our bid consultancy now. Now you know what a tender is, get submitting those tender applications!