“By rights, the issuing of a tender should mean the company is serious about placing orders – after all, respondents approach tenders with a belief that the company has realised a pressing need for the equipment, system and or services in question,” Billy Bell of Bell Output Strategies told Smart Procurement. “However, in many instances the tender (expecially tenders for Printers, Faxes and Photocopiers) is used to benchmark existing contracts, has not been through a thorough needs analysis, has no prepared business case and is an attempt only to ‘see’ the market.”
“Yet in all of these scenarios the responding players make enormous time and financial investments. The consequence of this has been a level of scepticism that negates the basic reasons for issuing a tender – inviting potential providers to expose their value propositions in an effort to identify those best suited for the company’s requirements.”
FAIR PLAYING FIELD
“It is important that the tender contain the vision of the future technological environment, the project objectives and the expected deliverables. Without this, the respondent is unable to customise the solution or services proposed, and the tender committee is similarly unable to gauge whether the respondent is capable of delivering the vision.
In principle, the tender should provide reasonable assurance that all respondents have an equal chance of success and that tenders will be taken sincerely and adjudicated evenly. It is not uncommon to find tender documents that actually name brands as a prerequisite or have been written around certain manufacturers’ specifications,” says Bell.
“Additionally, vendors believe that in many tenders, the current supplier will be retained and that the tender is really a ‘process of policy’ rather than a fair playing field!”
Of course, vendors may choose not to participate in tenders; however, companies need to consider whether this negates the principles of the tender process and an optimal outcome for themselves.
Ideally, the tender committee should contain a cross-functional view. ”
“Commonly, tender writers will orient the tender around their own discipline with procurement officers focusing on pricing and IT on problem resolution. “Nevertheless, a multi-faceted app-roach ensures that the adjudication criteria encompasses the full business requirement and ultimately delivers a wider range of benefits to the company.”
“So how can companies make the tender process legitimate?”
Firstly, current suppliers can only have a negative start – after all, if your current supplier is giving you bad service now, is it likely to change because of a new tender? And why else would you put the area out for tender?
“Furthermore, tenders should not be issued in any form unless there has been justification and approval at executive committee level for the business case. Having established intent, companies must provide a clear vision of the future environment that is both stated and fundamental to the design of the document. And this should be supported by a set of adjudication criteria that clearly sets out and encompasses the purpose, objectives and vision of the project, so that respondents can orient their value proposition to assist their achievement. Importantly, this procedure leads the committee away from price as the single selection factor, towards other ‘essential to success’ factors, such as cultural fit, service level achievement capability, business relationship proposal and references of deliverability. For some businesses, it could be important to state in the preamble to the tender that unsuccessful respondents will be allowed to audit the process using independent third parties on a confidential basis. And this clause alone could potentially result in the quality of responses improving.”
POST AWARD ETTIQUETTE
“Finally, once tenders have been awarded it is important to inform non-successful candidates formally. Of course, one-line e-mails do not show appreciation for the effort – and the cost – that has been invested in the process. A letter handed over in a meeting, with a short explanation as to areas that could have been better, goes a long way towards maintaining respect.”
About the author: Billy Bell is the founder of independent consulting firm, Bell Output Strategies and can be contacted on 082 888 3218