A Guide To Tendering For Contracts - June 2012

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A Guide To Tendering For Contracts - June 2012

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A Guide To Tendering For Contracts - June 2012

  1. 1. Active Practice Updates JUNE 2012 <<Company File Name>> <<PDF Description 1>>A guide to tendering forcontractsWhen a business bids for a job, usually you will draw up a quotationor an estimate and the contract will be negotiated on that basis. But Business UPDATEfor large jobs, extended periods of supply, and most public sectorcontracts, a more formal process of tendering may be required.It is advisable to carefully weigh up the pros Thought should also be given to other factors • Will the contract be sufficientlyand cons before launching into preparing a or demands such as human resources that profitable?tender. will be tied up in the tendering process and • What do you estimate the cost of how they might otherwise be deployed, preparing the tender to be and is itPotential benefits perhaps to greater effect. realistic to commit those funds at this stage?Besides affording a degree of security and Preliminary considerationsconfidence to a business, winning major If necessary, contact the customer directly tocontracts can raise your profile both in the Before committing resources to preparing clarify any outstanding questions. Above all,marketplace and among other potential a tender, obtain sight of the necessary satisfy yourself that the customer is seriouscustomers or clients. It can also help with documentation and check the following and not just inviting a tender to make upretaining and recruiting quality staff. carefully: numbers or simply test the market. • Does the work fit in with your strategicAnd there can be benefits from engaging in Beware also that the information you plans and overall business objectives?the tendering process even when you are not include in a tender could be potentiallysuccessful in your bid because it can help • Do you have all the necessary skills and useful to others such as competitors. Whereyou assess your strengths and weaknesses, resources required by the customer and appropriate protect your interests by requiringfine tune your business plans, and gain if not what would be the additional cost the customer to sign a non-disclosurea greater understanding of the needs of of acquiring them? agreement.specific customers or clients. Importantly, this • How would the work impact on othercan help with identifying and bidding for aspects of your business? Preparing a tenderfuture contracts. • Are there requirements to comply with specific standards relating to the Having considered the above points andPotential disadvantages environment, diversity, sustainability or decided to proceed, the next stage is to health and safety matters, and if so can assign a team to gather all the necessaryDepending on the size and nature of the information, analyse the costs, prepare a you meet them?contract, the process of preparing and pricing schedule, and finally write and submitsubmitting a tender can incur considerable • How important is it for your business the tender. These are all areas in which wecosts, most or all of which will be lost if to win/retain this particular customer/ will be able to advise.the bid is unsuccessful. You will need to be contract?confident that you can withstand the potentialloss before proceeding.18 Hyde Gardens www.plummer-parsons.co.ukEastbourne BN21 4PT01323 431 200 eastbourne@plummer-parsons.co.uk
  2. 2. A guide to tendering for contractsCosting and pricing Resources and experience • The launch of SME product surgeries to give SMEs the opportunity to pitchThe costing and pricing in particular are You will also need to demonstrate that innovative products and services directcritical to the viability of the tender and it is you have the resources and experience to to a panel of senior procurement andessential that these are both accurate and manage the contract effectively, adhere operational professionals from centralthorough. While you want the tender to to schedules, deliver on time, deal with Government and the wider public sectorbe competitive, it also needs to deliver a contingencies, and have appropriate riskworthwhile profit. management procedures in place. The bad news is that the programme of ongoing public sector cuts the GovernmentOne key consideration in formulating your Finally, remember that with the tendering has embarked upon is likely to mean thereoffer is to understand whether the customer process timeliness is everything. Make sure will be fewer public sector contracts onis looking for value for money or is primarily you work within the customer’s timetable and offer, competition for them will be stiffer, andfocused on the lowest bid. Where value that the proposal and any other relevant margins will be squeezed as public sectorfor money and not just cost is an important information is presented in a timely manner. agencies seek to reduce costs.consideration, be sure to emphasise uniquefeatures and benefits that your competitors Do you have the prospect Traditionally SMEs have complained that tendering for public sector contracts is anare unlikely to provide. Quality, reliability,support, maintenance, and guarantees should of a public sector contract? arcane process that is stacked in favourall be emphasised in this context, as should of the big players with a culture in many For smaller businesses thinking of bidding fortestimonials from other customers where agencies of preferring to offer contracts to public sector contracts there is good newsappropriate. organisations that have previously worked for and bad news. them, making it even harder for new playersRemember, procurers will generally want The good news is that the Government has to enter the field.to consider the lifetime costs of a product taken a number of steps towards removingor service and will want to look at costs But with the new measures mentioned above barriers to small businesses bidding forassociated with aftercare, maintenance and and a corresponding commitment from the public sector contracts, promising greaterreplacement, not just the original purchase Government that a quarter of public sector transparency, less red tape and easier accessprice. Be sure to itemise these in your tender. contracts will now go to small businesses, it is to information. to be hoped that prospects will be brighter inSpecific qualifications Specific measures included: the future. • The launch of the Contracts Finder In any event, tendering for a public sectorWhere the customer lists specific website as the place to find public contract is a long and potentially complexqualifications it is important that you spell sector contracting opportunities over process and if you do not already haveout in detail how you will meet them. This is £10,000. From now on, all you need experience in this area we stronglyespecially true in the case of public sector to do is specify which contracts you are recommend you contact us for help andcontracts, where evidence of compliance interested in and details will be emailed advice before proceeding.with specific policies on matters such as to you free of chargesustainability, discrimination, and health andsafety is often required. • The elimination of the Pre-Qualification Questionnaires (PQQs) for all central We can advise and assist both withThe customer will want to know that you Government procurements under preparing and presenting tenders.fully understand their needs and that you Specifically, we can help with the £100,000 so that procurers will be free background work especially the cost andhave the skills, resources, and experience to choose the best route to market for pricing analysis, write up the proposal, orto meet them. Generally, the more specific their individual circumstances simply provide a fresh pair of eyes to lookyou can be in this area, and the more you • Allowing businesses to submit their over the proposal before you present it.can demonstrate that you can bring practical Contact us to discuss further. pre-qualification data once for allideas and solutions to the table, the more procurements in common commoditieschance you have of your offer being given instead of having to submit the sameserious consideration. data time and time again

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