Good Practice
Bidding for Public Contracts – Why Don’t More Boards Get Involved?

When I’m not writing for Spend Matters, and doing everything else that is linked to that core task, I still do a little bit of consulting work. These days, that is more often on the “sales side” than working with buyers. I give usually short and sharp advice to firms bidding for public contracts, in sectors including professional services such as consulting or legal services.

There is one misunderstanding that I have found many suppliers have when they are bidding for major contracts. They assume that important people in the contracting authority read their bids. They believe that the procurement director, perhaps the chief executive, perhaps even the politician who sets policy, is closely involved in the evaluation process.

Of course, that is rarely true. In most cases, it is more junior people who carry out the detailed evaluation and mark the tender. In fact, if senior people want to get closely involved it can be a sign of potential corruption! So the message for firms bidding for contracts is this.

Don’t rely on “having a good relationship with the senior people” to win you the contract. You have to complete the tender and go through the bid process, being as professional as you possibly can, so whoever is marking your proposal is forced to give you the best possible scores.

I was talking about this to a good friend who retired quite recently from one of the biggest procurement jobs in the European public sector. He is also now doing some work on the bidding side of the equation. And he agreed with me on this point, but raised another interesting issue.

“How many Board level people in the bidding firms actually read their firms’ bids before they submit them”? That was his question. And the answer – not many, in our experience.

Even for huge bids, that could be worth hundreds of millions of Euros or pounds to the winners, and tens of millions in annual profits, are often put together by quite junior staff and then signed off by a somewhat more senior person – but not the very top people. Yet winning this contract might be one of the most important events for the firm in that year.

“If the top team in the bidding firm don’t care what is being submitted, why should I care as the procurement director, or the person in the contracting authority who is in charge of assessing the bid”? That is the key question.

And often, in our experience, there are fairly basic mistakes, errors and omissions that really should be picked up before the bid is ever submitted. However well you might actually perform the work, if you win the contract, you have to demonstrate that as well as you can through competing the tender documents thoroughly, intelligently and capably.

We also think that this explains why we hear a lot of noise from suppliers around bids being decided purely on price – which in our experience is rarely true, certainly for more complex services. It may be that the sales people find it easier to tell their Board that “those buyers just went on lowest price, so we lost out” – rather than admitting “we put in a really poor bid, we didn’t check carefully enough that we had answered all the questions accurately”.

If winning a tender is important, then it is worth putting the effort in, and that includes senior management talking a bit of time to get involved and at least provide some checking and sign-off.

Voices (2)

  1. Les Mosco says:

    Quite right. In my 7 years as MOD Commercial Director, We received thousands of bids, but I reviewed and scored incoming bids only a handful of times. They’re always scored by the relevant project team, not the top of the shop. The ones I did were because I was – by exception – a part of the project team. Politicians and the CEO equivalent are hardly ever involved. Evaluation is carried out by a mixed team of engineers, end users, finance and procurement. There’s nothing wrong with that, it just reinforces that the bids must be written to address the requirements of the ITT, and that those who evaluate will read the bid submission and score that. So senior relationships cut no ice; suppliers must write the bid to address the stated requirements and yes, it’s a good idea for someone senior in the bidder to read it before it’s submitted!

  2. Peter Stuttard says:

    Senior personnel on both sides of the fence should get involved in the process to greater extent.

    I am acutely aware of damage done, by both large contractors and government departments, because the people at the working level were simply not applying the sound commercial policies that were already in place.

    Any company board that does not get involved in a tender which could make or break the company is not doing its job, a case could be made that the directors were guilty of a dereliction of their duty, duties which are not only agreed with the company, but which are enshrined in law.

    I also see tender documents released by Government departments which are appalling badly conceived and implemented incompetently, sometimes they are of debatable legality.

    All too often however senior people are apathetic to such matters, being involved more in politics than they are in policy and effective governance.