I regularly encounter business people who have frustrating tendering experiences. In many cases, they avoid tendering like the plague. That’s fine if you can successfully grow your business without having to respond to tenders. However, to pursue lucrative government or large commercial opportunities, tendering will likely become a necessity.

Through my own experiences, I can empathise with frustration in the tendering environment. For example, during my tenure as director of a systems integration business, a strategic federal government agency opportunity was identified where we were confident of building a positive client relationship. We approached the tender in a textbook manner. A capture team was established, customer relationships were developed, competition analysis was conducted and a pursuit strategy was implemented.

The RFT was released. Our solution, team and experience were ideal and we had a compelling value proposition. However, the government agency threw a curve ball by issuing an addendum requiring a higher level of WHS compliance. Our existing certification did not meet this standard. We raised it with the agency project team and they encouraged us to submit our tender response anyway. We followed their advice, were subsequently shortlisted and presented our solution to the evaluation team.

The feedback was that we were the preferred supplier but could not be awarded the contract due to non-compliance with the WHS certification requirement. We were forced to withdraw, losing out on a multi million-dollar deal. It also adversely impacted the government agency, which had to appoint a lesser-qualified supplier, resulting in project delivery issues. Our initial response was to blame the government agency. The truth was that we were aware of the compliance risk, failed to adequately address it and instead gambled by relying on our existing certification. With the lesson learned and an investment made in implementing a sound tender process, the business subsequently got the certification and went on to dramatically increase their win rates to secure a range of more lucrative government opportunities.

When I seek to understand why business people are wary of tendering, the predominant theme is that it was someone or something else’s fault. For example, “we had the best solution but it was all about the lowest price”. This may be true in some cases but often it is due to a failing in tender process. For example, poor bid/no bid analysis lead to the investment of scarce resources into an opportunity that is not a good fit or a key aspect of the tender pursuit and response process is not executed.

Below are some more common reasons why organisations fail at tendering:

  • Failure to plan for the specific opportunity. If your initial investment into the tender opportunity follows the release of the tender then your chances of success are slim. You are planning to get lucky.
  • Failure to understand the buyer environment and context. This particularly applies to the government-tendering environment. For example, the NSW state government is currently: outcomes focused; influenced by statistics and facts to support your solution; looks favourably on innovative approaches to service delivery; and value collaborative partnerships.
  • Failure to understand the evaluation process. Many government agencies follow a consistent procurement model, an understanding of which can help you frame an effective response.
  • Failure to meet compliance requirements. The buyer is seeking specific deliverables and your solution must, at a minimum, meet the mandatory compliance requirements.
  • Failure to understand and demonstrate value for money. Being able to frame your solution in terms of value (the price and quality of your offering) is essential in government responses.
  • Failure to focus on the mechanics of the response. For example
    a. Poor writing. To win a tender response you must communicate your solution in a manner that is clear and compelling.
    b. Failure to back up statements with facts.

In not recognising the importance of implementing a sound tender process, businesses will often make the above mistakes, leading to frustration within the tender environment. However, as my example above illustrates, if you can recognise and address shortcomings then it is only a matter of time before your tender win rates improve.