In all of the conversations I have had with Bid Directors about their lessons learnt, there is one that comes up time and again: be selective about what you bid for.
One of the major regrets from so many Bid Directors is that they wasted time, effort, resources and budget on bids that they shouldn’t have been bidding. Bids that they knew they wouldn’t win. Even bids that they didn’t want to win.
For people who have experience in bidding, they know with certainty that bidding is a ‘boots and all’ exercise. There is no room for throwing your hat in the ring – that’s just throwing away a hat.
For major projects in Australia, bid costs can easily reach $40-50 Million dollars to submit a competitive Public Private Partnership bid. And bid teams can invest as much as 2 years, or maybe even 3 years in the tendering process. It is a big commitment and a lot is at stake for companies to invest in a gamble.
Recently, one very experienced Bid Director said to me that success in bidding comes from total commitment. He said: “If you throw absolutely everything that the company can muster at a bid, then you might win. All of your competitors are doing their best, so you need to totally commit just to have an equal chance of winning. As soon as you throw less than 100%, you’re gone. You just don’t bother.”
And from his experience, he went on to say that it has to be full commitment from the company, not just from the team. Otherwise it’s just a team of people with limited authority trying to make things happen. The company has to fully commit the best resources and sufficient funding, and accept the risks of the project, or the bid is doomed.
Another Bid Director said almost the exact same thing: “The company must be fully committed to the bid for it to be successful. It is very simple: if the tender doesn’t have the full endorsement of the company, don’t bother. Another bidder will be serious. Any investment made, in time, resources or dollars, will be wasted.”
This second Bid Director went on to say that success also depends very much on whether an ‘A team’ can be assembled to cover all disciplines in the bid, from technical through to marketing and sales, and if the team members are all fully dedicated and separated from the day-to-day business. Anything less than a fully committed ‘A team’ is not enough to develop the solution you need to win.
These conversations remind me of the metaphor of the bacon-and-egg breakfast. It goes like this: in a bacon-and-egg breakfast, what’s the difference between the chicken and the pig? The Chicken is involved, but the Pig is committed!
And tendering is like that: you can’t be involved, you need to be committed.
Almost every Bid Director says that the key to winning is to select the right tenders and then really commit. Be brutal in selecting the right tenders. It is far better to invest your time in winning one tender than in bidding for several and losing them all.
So, how do you choose?
Easy – you need a Go / No Go process.
At Aurora Marketing, we’ve developed a 5-part 25-question analysis to help clients decide which bids they should pursue.
The first part we analyse is Expertise and Client Relationship:
- Do you know – and respect – the client?
2. Does the client know – and respect – you?
3. Do you have impressive relevant experience?
4. Do you have credibility in this field?
5. Do you have anything genuinely different to offer?
Secondly, we look at Strategic Value:
- Is this the right strategic direction for you?
2. Would winning this contract further your goals?
3. Is this client likely to be a strong partner in future?
4. Do the benefits outweigh the risks?
5. Do you have the capability to deliver this contract?
Next, we look at the Competitive Landscape:
- Who is the incumbent?
2. Is the client happy with the incumbent’s performance?
3. If the client is unhappy, do you know why?
4. Is the RFP slanted toward a competitor?
5. If you win, will it unsettle or damage your competitors?
Then, Bid Certainty:
- Is this project or acquisition properly funded?
2. Is the client serious about making a decision?
3. What are the consequences to the client of choosing us?
4. Are there political considerations to be aware of?
5. Will costs be reimbursed if the project doesn’t proceed?
And lastly, the all-important issue of Corporate Commitment:
- Do you have full corporate support and approval?
2. Do you have the depth of commitment to this tender? (resources, budget)
3. Is the organisation comfortable with the contractual requirements?
4. Is the project commercially viable?
5. Have you already formed the partnerships you need?
Some of these questions should be deal breakers or red flags.
For instance, if you don’t have impressive or relevant experience… it is a big red flag. Similarly, if you don’t have any credibility in the field.
And all of the Corporate Commitment questions should be deal breakers.
But aside from deal breakers and major red flags, you should be scoring somewhere around 20 out of 25 in order to justify proceeding with the bid.
And for the questions where you score a negative, you should be able to identify how to resolve that gap before the tender period starts or at the least before the tender is submitted.
We recommend that you develop your own Go / No Go process and agree clear rules about which questions are mandatory for you to proceed.
The good news is that tendering is the gateway to big contracts, big clients and landmark deals.
BUT… tendering is a ‘boots and all’ exercise. Remember the bacon-and-egg breakfast.
Aurora Marketing specialises in helping companies win their tenders and position themselves for success.