A very simple definition: – a tender is a detailed proposal which will be assessed against specified criteria
As well as being the vehicle for your proposal, the tender document should present a positive, powerful and persuasive case for your organisation. It therefore has the potential to be both a marketing and educational document, informing the tender caller (ie whoever is inviting tenders) of the uniqueness and strength of your organisation, and the benefits for them in accepting your offer and entering into negotiations prior to signing the contract and commencing the project.
Your proposal should be based on an assessment of the need, problem or opportunity, sufficient project detail to show that you are able and willing to fulfil their requirements and assurances as to costing, budgeting, scheduling and evaluation procedures. When you have won the tender and commenced implementation of the project, your tender remains a live document, together with tender brief and contract, through the duration of the tender project period.
Competitive tendering is a core business activity: it is a means to an end, not an end in itself. Tendering can lead to:
- new or increased sales,
- a new or extended product or service possibility,
- addressing or satisfying a need,
- opening up a new market or a new market opportunity,
- enabling you to redress a resource deficiency or create a resource opportunity, or
- enabling you to achieve or improve a recognised status, accreditation or certification.
You will need to carefully define and assess tendering opportunities, select the opportunities which will benefit your organisation or your client/customer base and then set out to win the opportunities you select. In particular, you will be looking for product, service, customer or market opportunities which will lead to either introducing a new or extended product or service in an existing market, or an existing product or service in a new or extended market.
Always remember that tenders are not a one-off activity, they are a means of doing business and are therefore a core business activity. As a core business activity, tenders must contribute to the success of your organisation’s business. They should be treated as a core strategy in achieving your business objectives.
You can be entrepreneurial in your tendering by expanding your awareness of the function and process of tendering, and improving the nature, extent and results of tendering as a core strategy to achieve your business objectives.
Mostly importantly, aim to increase your strike rate. If you are winning 40% of your tenders, you are missing 60% of your tenders! And the cost of tendering is the cost of preparing 100% – not just those you win.
As a repetitive function, you need an internal policy and procedure to ensure consistency in the content, format and purpose of tendering throughout your organisation. To explain these terms further:
- content = a genuine response to the tender brief plus added value that benefits both your business and the organisation calling the tender
- format = accuracy plus clarity plus conciseness in order to ensure your tender is a powerful, persuasive and positive marketing tool for your organisation
- purpose = to enhance your business effectiveness, which may be:
- making a profit or surplus,
- ensuring cashflow and therefore financial viability,
- satisfying the needs or demands of your customers/clients,
- sustaining or increasing order intake and work-in-hand, or
- achieving business growth.
Using competitive tendering cleverly gives you the opportunity to:
1. Expand your business
- into a new industry sector
- into a new geographic location or region
- industry/profession/customer/competitor recognition
2. Expand your contract or order opportunities
- a new client/customer
- additional or repeat work with an existing client/customer
- breaking into a new market segment or niche
- creating a new market niche
- challenging a competitor or competing sector
3. Provide a service
Services are intangible, usually produced or consumed at a close proximity and with significant social inter-action: it is difficult or impossible to re-work deficiencies in services once they are delivered.
4. Manufacture a product or product components
Products or product components can be for use in manufacture by the client/customer or for on-sale to their own customers.
5. Import a product or product components
Products or product components that are imported can be for use in manufacture by the client/customer or for on-sale to their own customers
6. Research and develop/design a product, component of a product or service
- a research and development (R&D) tender is simply that: to research a problem, need or opportunity and develop an appropriate process, procedure or product for manufacture or implementation
- an R&D tender rarely moves beyond the development stage which means that a further tender process is required to proceed to manufacture or implementation