The tendering process
Tendering is a process for contractors to place a bid for a project, appoint a contractor, and agree on a price.
We’ve put together a guide to the process and different steps to look out for.
As a contractor, you will secure a contract by your formal offer of a bid, and the process involves being evaluated on price and quality at the selection process.
Steps to follow in the tendering process
There are a number of first steps to follow in the initial stage of the process. These are:
- Find out all you can about the client
- Take a look at the potential competition
- Develop an ideal solution to meet the business objective
- Start to work through the bid document
- Plan your bid
- Writing your bid
- Reviewing your bid
- Submitting your bid
Once these steps have each been followed, it’s time to submit your bid. Should you be successful, you will likely be asked to meet the client or present to them.
Understand what procurement teams are looking for
Procurement teams look for different aspects such as costs, competitive advantage, and any risks that can impact their supply chains as they are responsible to achieve cost savings for the business and to influence and improve ethical practices in the supply chain.
The Procurement team will manage all the activities in the bid process, including logistics and contract management. They make sure that the process is carried out in line with current legislation and requirements of the project, as well as making sure compliance with purchasing best practices and existing business policies and procedures are met.
What is involved in a tender?
There are several steps involved in the tender process.
An invitation to tender (ITT), is a formal procurement document that the client issues, inviting bids for the contract they are looking to achieve. This is often from suppliers or contractors who have been previously assessed for suitability via a supplier questionnaire (SQ) or pre-qualification questionnaire (PQQ).
Typically, the information required in the invitation to tender documents includes more detailed information about the goods or services you provide and specific considerations they would like you to evidence so they can select the most suitable candidate.
Ethical sourcing in the tender process
Businesses are increasingly embedding sustainability into procurement and purchasing decisions. Procurement will evaluate several different aspects such as:
- Overall impact of ethics and responsible procurement
- Risk assessment
- Due diligence, monitoring and audits
- Sustainability and its importance in procurement and supply decision making
- Modern Slavery and associated considerations
- Health and safety in the workplace
David Pictor, SVP of Sustainability at Alcumus, states “Sustainability isn’t a buzzword, it’s crucial to an organisation’s purpose and strategy to grow brand equity and trust. Heightened stakeholder expectations and growing public scrutiny mean that businesses need to prove they’re managing their operations without compromising on safety, sustainability or ethics.”
Additional factors in the tender process
Risk management is a critical and continuous process, and appropriate risk assessments will be undertaken and reviewed throughout the tender process.
Procurement assesses the risks to them as a client and will look at the following:
- Lack of capacity of the supplier
- Reduction in demand leading to higher costs
- Changes to the supplier’s business objectives
- Demand changes that cannot be met by the supplier
- Market fluctuations
A service-level agreement (SLA) may also be required, setting out the level of service the business expects from you.
Contract award stage
Once the evaluation team has reviewed each tender, they’ll either make recommendations to the business or will award the contract based on their assessment. An award decision notice must be sent to all tenderers once a decision has been reached. This will outline the reasons for their decision, the scores you received, and, if you weren’t the winning bidder, how your score differed from the winning bid – you can obtain feedback that will help you understand the aspects of what you need to include next time.
Whether you are successful or not, it is important to always ask the client for constructive feedback on your submission. This feedback will allow you to improve your tender process in the future.
Increase your tender success with our guide
Find out more and read our full guide on the tendering process and best practice.