| Preparing for Inviting Submissions, Grant Applications, Proposals |  |
Tools & Checklists |
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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:
Using
competitive tendering cleverly give you the opportunity to:
Article
posted Winter 2007
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| a) | the tenderer – ie the party that will provide the expertise, knowledge, equipment, etc, and/or perform a function in return for payment, and |
| b) | the outsourcer – ie the party that will pay to receive the expertise and/or function and integrate it into their organisation’s performance |
The
usual procedure is for the outsourcer to determine their need
or opportunity, prepare a tender brief setting out the nature,
scope and specification of their requirement and then arrange
to receive an offer from people interested, capable and willing
to meet the specifications and satisfy the requirement. Such an
offer may be referred to as a bid, quote, estimate, tender response
or proposal.
When
the offers from a number of tenderers has been assessed by the
outsourcer against a pre-determined set of criteria (which would
have been included in the tender brief), a short-list may be agreed
upon for interview and subsequent negotiation with the preferred
supplier – followed by the signing of a contract. The successful
tenderer becomes the supplier to the outsourcer: the outsourcer
becomes the client of the supplier.
Documentation
There
are by now a number of documents that are critical to the success
of the outsourcing project:
For
the outsourcer:
| 1. | the working papers they have developed, and from which they prepared the tender brief |
| 2. | record of the assessment procedure and process to ensure compliance with transparency, confidentiality, quality standards and industry codes |
| 3. | the tender document, complete with project plan to satisfactorily meet the specifications and comply with the assessment criteria, and |
| 4. | the contract with the successful tenderer. |
For
the successful tenderer:
| 1. | the working papers they have developed, and from which they prepared their tender response |
| 2. | the tender brief, complete with specifications and assessment criteria |
| 3. | the tender document, complete with project plan to satisfactorily meet the specifications and comply with the assessment criteria, and |
| 4. | the contract with the outsourcer. |
When
the contract period commences, the critical function is that of
project management, ie a designated person in the successful tenderer’s
organisation, and a designated person in the outsourcing organisation.
Together, they ensure that the contract is undertaken and completed
to the agreed specifications and schedule.
Remember
- a ‘successful tender’ is one that not only wins the
contract, but also fulfils the specifications, terms and conditions
of the contract to the satisfaction of the client.
The
starting point for the outsourcer is to identify their organisation’s
core competencies (those in which they have some sort of competitive
advantage) which must remain in-house – and decide whether
to outsource any or all non-core competencies. The decision to
outsource begins with the recognition of a need or an opportunity.
In the flowchart in this Unit, the ‘need or opportunity’
is referred to as ‘the catalyst’.
Organisations
need to focus their internal resources on sustaining and advancing
their uniqueness (eg a particular competency, their knowledge
base, a specific procedure, a product or component), then outsource
those functions that are peripheral to the maintenance or development
of their uniqueness.
Internal
staff then oversee and manage outsourcing relationships and contracts.
One organisation can outsource their non-core competencies, while
at the same time tendering to supply their own core competencies
to other organisations: one organisation can be both tenderer
and outsourcer at the same time – but on separate contracts.
‘Uniqueness’
is often described as an organisation’s competitive advantage,
winning edge or point of difference. The intellectual property
or intellectual capital related to uniqueness must be protected
at all costs, and should never be the subject of outsourcing.
Benefits of outsourcing
Outsourcing
can bring real benefits to an organisation. Some examples are:
| a) | the opportunity to access state-of-the-art equipment, processes or knowledge without the cost of buying, developing or leasing same, eg machinery, software, research capacity, printing machines |
| b) | traditional working hours are expanded when work is performed off-site by specialists |
| c) | specialists can reduce costs related to time, due to their expertise, expertness and creativity related to their capability or capacity being purchased by the outsourcer, or |
| d) | services are purchased only as needed. |
The
matrix shown here will facilitate an internal identification
of the outsourcing organisation’s core competencies, ie competencies
that are central to the maintenance or expansion of the organisation’s
competitive advantage. The steps are these:
| 1. | identify competencies on the vertical | ||||
| 2. | identify direct service or product activities on the horizontal | ||||
| 3. | under
each activity, identify those competencies that are critical
to the effectiveness, efficiency or quality of each activity
to determine your core competencies
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| 4. | assess
the nature and extent of risk associated with possibilities
for outsourcing:
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Competency
and Direct Service Activity Matrix
– examples offered to illustrate the matrix
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Competencies > Direct Service Activities V |
A
Payroll |
B Information Technology |
C Event Management |
D Computer Training |
E One-off, Specialised Projects |
| 1
Counselling Sessions |
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| 2 Temporary Accommodation |
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| 3 Employment Support |
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| 4 Educational Booklets |
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| 5 Health Education |
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6 Remedial Assistance |
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| 7
Professional Development |
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| 8 Independent Living Skill Training |
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| 9 Recreation Activities |
Checklist
to guide decisions about outsourcing
| 1. | Ensure a thorough analysis and comparison of competencies and direct service or product activities | ||||
| 2. | Carry out a thorough assessment of likely associated risk, including both the potential for risk and the problems and costs associated with managing or avoiding such risk | ||||
| 3. | Establish a set of criteria to assess each competency or special project for outsourcing | ||||
| 4. | Strategically select which competencies or special projects could be considered for outsourcing | ||||
| 5. | Prepare a detailed specification of your requirements, and draft and detail the terms and conditions of contract | ||||
| 6. | Prepare your assessment criteria, quality standards of performance, and procedure to select your preferred tenderer (ie potential supplier) | ||||
| 7. | Carry out your selection and appointment process, which may include a detailed negotiation process prior to finalizing the contract | ||||
| 8. | Be sure each party fully understands and accepts the parameters and components of the contract | ||||
| 9. | Ensure
mutual and documented agreement on anticipated outcomes, time
schedule and terms of payment
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| 10. | Consider short and long-term costs and benefits, both internal and external. |
Risk analysis
It
is critical to undertake a thorough risk analysis prior to commencing
any outsourcing activity, and this checklist is offered as a guide:
| 1. | Identify potential risk – real and imagined |
| 2. | Choose potential suppliers carefully, and be sure to ask for references and client lists |
| 3. | Check the supplier’s reputation and professional or trade credentials |
| 4. | Make sure the culture of the supplier fits the culture of your organisation |
| 5. | Be willing to accept that you may not know exactly who does the job or when or how, so be prepared to monitor process and progress through your own project manager |
| 6. | Establish reporting criteria and design methods and proformas to receive information throughout the contract period that will effectively and efficiently monitor progress in line with the agreed specifications, schedule and budget, including dissemination of key data regarding the project’s status |
| 7. | Calculate the real and total cost of retaining a competency or project in-house as a basis for comparison to evaluate the cost of outsourcing |
| 8. | Consider the level of expertise, experience and speed of the likely supplier in comparison with retaining the competency in-house |
| 9. | Consider factors that could influence pricing |
| 10. | Ask
if the supplier will share the financial risk by negotiating
payment terms and conditions |
| 11. | The lower the fixed return for the supplier, the greater the perceived risk by the supplier |
| 12. | Allow sufficient time to assess progress and outcomes, and be wary of added costs over and above the terms and conditions of contract |
| 13. | Anticipate variations and agree on a procedure to deal with them when negotiating the contract |
| 14. | Where the contract is ongoing or of a considerable duration, be sure that your people gain as much benefit as possible from having the supplier ‘in-house’ or ‘on-site’. |
Is
your submission for a project of limited duration?
I
recall one time-limited project that resulted from a successful
submission, with funding for six-months and no possibility of
further funding. The six months commenced from advice that our
submission had been funded – but the cheque didn’t arrive
for another 3 weeks. In our submission, we had allowed 4 weeks
from receipt of funds to:
| a) | contract
a project team of 8 people for a six-month period, one of
whom would be appointed as project leader: • the whole project team were to be currently unemployed mature-aged people • the project was to involve the project team in school-based activities through a 5-month period, |
| b) | rent and equip a shop-front, |
| c) | arrange vehicle availability, |
| d) | liaise with local media, advertise and promote the project, |
| e) | introduce
the project team to the local network of 10 schools: • the schools had all been involved in designing the project, including the individual school activities, and preparing the submission, and |
| f) | commence the project evaluation. |
The project plan was designed to allow:
| a) | first month for preparation and establishment, |
| b) | second, third and fourth months for 10 school-based activities to be undertaken, |
| c) | fifth month for a major activity involving all schools, which was a multi-cultural art and craft festival, and |
| d) | sixth month to wind-down, complete the evaluation and write the project and evaluation reports. |
The project achieved everything we had planned – and a
great deal more.
The
secret of success was:
| • | extensive discussion and agreement with key people prior to preparing the submission, |
| • | keeping the project to a manageable size, and |
| • | scheduling and monitoring preparation, implementation and evaluation within the limited time and resources. |
Organisations
are preparing submissions, grant applications or proposals to
access funds to support the provision of services, programs or
activities. Such services, programs or activities should result
in an enhancement or improvement in the life or lifestyle of service-users.
Preparation of these documents is divided into two separate stages:
1) The project – designing the ‘project’
to be undertaken or achieved as a result of the submission
2) The submission document – writing the
document to include detail explaining:
purpose and detail of the project
how the project is going to be managed and staffed
why your organisation is the best one to undertake or fulfil the
project
total project costs, often broken down into units, activities
or budget categories
the period of time it will run for
benefits and outcomes for the sponsor (to whom the submission
is being presented), your own organization and people who will
be involved with or benefit from the project itself
how these benefits and outcomes are going to be either measured
or recognised
what happens at the end of the project
The work of preparing, writing and presenting a submission often
falls to staff members, yet the committee or board and senior
management have a responsible role in:
attracting funds
ensuring provision of services, programs and activities or products
are of a consistent quality and provided in an effective, efficient
and humane manner, and
ensuring operational responsibility and financial viability
Submissions are prepared either by responding to a known, advertised
or regular advertisement or direct approach.
Being financially responsible for the organisation, the committee
or board and senior management need to be, and be seen to be,
the ‘owner’ of all submissions forwarded in the name
of the organisation .. which means that they:
| 1. | know and understand each submission submitted in the name of the organisation |
| 2. | are committed to each submission, with a formal motion to this effect recorded in appropriate minutes or reports |
| 3. | are satisfied that each submission (both the project and the document) is in line with the organisation’s philosophy, purpose, strategic and policy framework and financial priorities |
| 4. | have formally accepted each submission in detail, including consideration of the full ramifications of implementation |
| 5. | are willing to approve additional resources if necessary to ensure a successful implementation of each project, ie willing to consider any necessary changes if the successful outcome of a project comes under challenge: an example would be where funds are suddenly withdrawn or additional resources are needed to maintain and complete the project |
| 6. | are assured that all staff affected by a potential project have been advised of the preparation of any submission: such preparation should avoid any later misunderstanding or misinterpretation |
| 7. | are aware of any possible negative effects of a proposed project on existing commitment or obligations. |
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