Tender Process:A to Z
What is a tender?
A tender is an offer to do work or supply goods at a fixed price. The tender or bid process is designed to ensure that the work to be done is given out in a fair way. Although price is very important in the decision on which tender or bid to accept, it is not the only factor taken into account. Each client or government department calling for tenders does so according to its rules for tender adjudication or procurement policy. Once the client entity accepts a tender, it is binding on both parties. This means that the person or company that won the tender has to provide the goods or services in the manner agreed to and at the price offered, and the client entity must pay the agreed price at the agreed time. In other words, once accepted, a tender is a binding business contract. Even if you fail to win a particular tender, simply writing and submitting the tender can clarify your aims, strengths and weaknesses. By asking for feedback on your bid, you are able to learn from the experience. It raises your profile with the client and helps you understand the client’s needs. Tenders in South Africa are a lucrative source of income for small business, but can be challenging to win. Getting the process right not only saves time and effort but creates the potential to establish additional income streams.
How do you find out about tenders?
Tenders are published in a wide variety of places. Tender services began in 2001 and most tenders were published in the newspapers. Today, most tenders are published online on client websites. This means that searching for tender advertisements is a major undertaking for companies and professionals who need to tender for work. Alternatively, one can subscribe to tender services (like Government Gazette, simpletender etc) in order to obtain the latest tender notices as soon as they are published. This service includes searching and matching the tenders that are relevant to your business. These tenders are then emailed direct to your inbox on a daily basis.
Key points to consider
· Are you able to get hold of the bid documents and analyse them within the time provided?
· Are you able to match the technical, skill and experience required?
· How much will it cost to prepare your bid?
· Would the work fit in with your strategy and positioning of your business?
· Would the costs of fulfilling the contract be too high to make it worthwhile?
· How would the contract affect your other work, or affect your staffing and ability to take on other new business opportunities?
· You also need to consider how important the client is to your business contracts. Is this a good potential client or one you don\'t want to offend by not tendering? Try to understand things from the client\'s point of view
Collection of tender documentation
In order to get the tender document, check the tender advert and phone the contact person. There is no point in trying to decide whether to tender until you have read and understood what the tender is about by reading the tender document. This may not provide all your answers as whether you will be able to carry out the service or not. In most instances most requirements are listed on the tender advert and in some cases it forms the functionality criteria on the tender document with a scoring system and a minimum score requirement.
Finding out what the client really wants:
If the tender document is unclear, you should always raise questions by phone or email to the enquiries contact person listed on the document. Site inspections are one way in which clients are able to disseminate information on the project to the interested bidders. Such briefings enable bidders to ask questions in order to clarify what is required. Some site meetings are compulsory, which means that by not attending the meeting you will automatically be disqualified from tendering. Therefore, check the tender advert as soon as it is released, and clarify how to attend the site inspection by telephoning the client and requesting confirmation of the site inspection details.
What to put in your tender proposal?
· Focus on the client. Talk about the client’s needs and how you can solve its problems. When you write about yourself, it should be to prove you have the skills, experience and the organization to fulfil the client\'s requirements.
· Help the client by coming up with ideas - from alternative ways of doing things to how to tackle possible worries about future maintenance and staffing implications.
· If the client has provided a prequalification document, make sure that you cover everything in the document.
· Value for money decides most bids, not simply the cost. Mention aspects of the work that the client is unable to do with its current work force. Emphasise business benefits, service improvements, risk reduction, low maintenance, high quality, reliability, plus lifetime costs.
· Analyse all the cost and pricing factors of the contract. Do not ignore long term costs such as wages for staff who could be working on something else. Spell out all the costs.
· Contract management. Demonstrate that you have the resources to do the work in a cost-effective way to meet the client\'s needs, meet the set deadlines, and respond flexibly to changing situations.
· Show that you have thought about and can manage potential financial, commercial, and legal risks that could cause contract failure.
· Provide details of your team. Emphasize stre