Data driven bid management: how technology is reshaping the profession

Are you tracking win rates, team performance and analysing the market? Bid-related data is increasingly being used by companies to improve and enhance all bidding and tender related activities. We discuss why bid data is being increasingly being captured and analysed,...

What’s the difference between a non-compliant and non-conforming tender?

Non-compliance vs non-conformance in tendering Knowing the difference between a non-compliant and non-conforming tender can be make or break for bidding success. Tenders provide businesses of all sizes with access to various opportunities to sell to the government,...

Whitepaper #9: How predictive modelling improves bid economics and outcomes

Data science and bid management are converging Do you have line of sight visibility of your bid risk and performance? The cost to your business for the chance to win a contract is considerable, and winning the wrong project can financially ruin your organization. In...

1 in a million chance behind lost bid

REAL STORIES SHARED BY OUR READERS * Names have been changed Lost bid blame game all started over the non-compliance and subsequent disqualification of the bid submission. A major contractor has been shamefully disqualified from a major public sector works program for...

The benefits of a centralised bid system

Connect your sales, bid and estimating team – all in one place. Bid management is a process that brings together internal stakeholders across the business leading up to, and during, a tender. Strategy, bid/proposal solution, risk management and pricing are some of the...

Government procurement people unanimously decide to extend bid deadlines to just-after-holidays

REAL STORIES SHARED BY OUR READERS * Names have been changed Procurement tender deadlines after the holiday season are on trend. That's the word on the street after it was learned today that procurement departments across the world secretly banded together to sign a...

Our newest feature – Kayo integration – launching April 1

If there’s one thing standing in the way of bid teams as they return to the office or do a 40 hour week from a spare room it’s the struggle to regain work/life balance as many transition from pyjamas to business casual. Fear not bidding friends. We listened and we...

Advancing procurement 4.0 with artificial intelligence

Procurement 4.0 has been discussed by industry for years now, but it will be government that hits the go button to get the ecosystem going.  How can new technologies increase agility within the procurement function?  And what will the new procurement look like? This is one of the hottest topics being discussed in procurement circles right now after the industry lagged too long in modernising their systems, and subsequently suffering the fallout of supply chain disruption and COVID-related corruption.

Bidhive track changes is here

Collaborate on your bids and proposals with others in real time - no more emailing files back and forth. Fast-track your bid responses without ever having to leave the Bidhive interface. Bidhive's simple yet powerful editing tool provides an efficient way of managing...

Whitepaper #5 Being Antifragile: 7 Procurement Trends Impacting Bid Strategy

Procurement trends after the pandemic As the world begins to recover, what procurement trends are we likely to see and how will this affect bid strategy to win a contract?  We have so much to reflect on about adaptation and change...

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Data driven bid management: how technology is reshaping the profession

Are you tracking win rates, team performance and analysing the market?
Bid-related data is increasingly being used by companies to improve and enhance all bidding and tender related activities. We discuss why bid data is being increasingly being captured and analysed, and how it can help you achieve competitive advantage.
Bidding strategy is one of the important strategies in the early stages of a project’s lifecycle to shape a winning bid, and ultimately project success. The quality of decision making at the pre-contracts stage can enable a business to adapt quicker than competitors to the opportunities and threats presented in the market, and it can also unlock potential to develop other intangible competitive differentiators in the business identified through team dynamics, service methodologies, and technical expertise. Now, more than ever before, data is helping to round out the decision making process – making it less about gut feel, and more about getting the answers needed to win the work that the company wants.
Why is tracking bid data important?
Gone are the days of scatter gun bidding. This is expensive and draining on company resources. Knowing where to focus time and energy means the company can put their best teams on the bids they want to win.
By combining financial and non-financial data in bid analysis, we can provide deeper insights into relational factors behind bid success and failure.  Having this data paints a more complete picture, allowing the company to create a bidding profile to learn more about bid performance by team, by business line and by customer.
By adding external market data, companies can enrich their understanding by benchmarking their performance against competitors.  Additionally, with more meaningful insights companies can identify patterns and outliers, helping them quickly adapt to market forces, and arming them with intelligence that can improve their competitive strategies and win rate.
What bid data should bidders be tracking?
Getting started with analytics is about exploring the available data to generate new knowledge and insights.  For bidding companies starting on a bid analytics journey, a good starting point is to consider defining some questions and then identifying the data that you know is relevant to answering them.
For example:

Capturing number of incoming tender opportunities and creating a digital bid register (or bid board).
How many bids progress from open market to qualification, to bid/no bid, to number submitted, and to won / loss?
Bids submitted and won by value, and by volume
Win/loss ratio (won bids compared to lost bids)
Capture ratio (won bids divided by qualified submitted bids)
Win ratio for customers new and incumbent
Diversity of customers
% bids going to core customers (total bids from core customers / total number of submitted bids)
Opportunities month on month (increasing or declining? Are there seasonal trends?)
Mark up (or profit margin) % influence on win ratio
% bids across business lines.

Tracking tender and contract market data
In addition to tracking your previously awarded bid results, open market data published by public sector businesses (and aggregated by Bidhive) now makes it more accessible to capture topline tender and contract data to supplement the bid data you are already capturing within your business.  Combined, this data can be used to deliver you competitive advantage because it gives you access to:

Competitor price points
Market intelligence such as competitor contract durations, including renewal options
Previously awarded bid results
Upcoming planned public sector opportunities.

A key advantage of including market data in your bid analysis is the ability to use it for benchmarking against competitors; quote with more certainty; and optimally price your bids so that you neither price too high and lose the bid nor price too low to lose on margin (leaving ”money on the table”).
Bid teams bring incredible value to organisations and quantitative analysis allows them to put hard numbers to their successes and opportunities. Adding qualitative analysis to understand reasons for won/loss outcomes can help the business to uncover opportunities for additional training, resources or alternative teaming which can influence an outcome.
As with anything strategic, it will be the people, not the technology, who make sense of the data and give it meaning.  When embarking on a data analytics initiative, it is important to remember that business intelligence is the work of the people who apply it. The data warehouse is simply the enabler to support you in the process.
updated 21 July 2022. Originally published 7 August 2021.

 

What’s the difference between a non-compliant and non-conforming tender?

Non-compliance vs non-conformance in tendering
Knowing the difference between a non-compliant and non-conforming tender can be make or break for bidding success.
Tenders provide businesses of all sizes with access to various opportunities to sell to the government, but navigating the process can be daunting. In this article we explain the difference between a non-compliant, non-conforming and alternative offer (or alternative tender) and why understanding the language and interpretation of the definitions is important (and what trips people up).
What is a compliant tender?
Understanding the conditions of tendering and the rules you need to follow can save you a lot of time and money. Reading through the wordy tender Specifications is often considered a laborious part of the tender response process, but failure to meet compliance requirements or following the process properly can result in your submission being disqualified as being a non-compliant tender.
When a Request for Tender (RFT) – or Invitation to Tender (ITT) – is released, all respondents are given the same amount of time to prepare and submit their best offers. At the close of the competitive tender period an evaluation panel will initially examine all submissions (referred to as ‘bid submission’) for compliance with the conditions of tender. This is often listed in tender documentation as the mandatory criteria, which are pass or fail criteria but are not generally included in scoring submissions.  For example, a compliant tender is one that satisfies the conditions of tender.  Tender documentation will include very specific requirements for information in a format that can be compared to other bids.  Below is an example of a tender evaluation comparison matrix.

What are some examples of a non-compliant tender?

Missing the submission deadline
Exceeding word count
Failing to complete and execute all of the tender return schedules, and in the format required.

When these conditions are not met, the bid submission can be deemed non-compliant and eliminated from further consideration. In other words, the first step of evaluation is disqualification.
What is a non-conforming tender?
When bid submissions proceed to the next stage of evaluation, they will be assessed against the Specification. For example:

A statement of conformance to the tender Specification or a list of non-compliances (eg. minimum insurances)
Verification that the bid submission fully meets the requirements of the goods or services (eg. industry standards that must be adhered to ie. safety or ISO quality standards).

Non-conforming tenders may be set aside from further consideration, but sometimes a non-conforming tender may be considered provided a conforming Tender is also submitted.  This is what is usually termed an alternative offer.
What are some examples of non-conformance in tender responses?

Failure to meet quality requirements and major ISO standards
Substitute product or service (this could be evaluated as either inferior compared to the stated requirements, or an innovation if presented convincingly – see alternative offer below).

In quality management, non-conformity is a deviation from a specification, a standard, or expectation. In bidding and tendering, a non-conforming tender can also be an alternative offer.
What is an alternative offer (or alternative tender)?
An alternative offer, or alternative solution is where a supplier responds to a tender with a proposed different solution or approach to the Specification.
This is a non-conforming tender, however, it may still be considered and the tender documentation will specify the conditions and requirements for, and any limitations placed on, submission of alternative offers.
Usually, it must be lodged with a complying tender (eg. you might need to submit two bid submissions). If only an alternative offer is lodged then it might be assessed as non-conforming to the conditions of tender.
An alternative offer is a bid for a product or service that delivers improved functionality to the goods or services described in the Specification which could deliver greater value for money outcomes, including advancing sustainability goals.
What are some examples of an alternative offer (or alternative tender)?

Where a bidder proposes modifications to what has been described in the Specifications which may provide a better way to achieve an outcome. One example might be a call for tenders for petrol vehicles, with an Offer submitted for a more sustainable solution; another example might be a completely new product, technology or methodology you propose to use in an infrastructure project that will greatly reduce environmental impact
Alternative pricing model (eg. the tender may request a fixed price but a different pricing model could provide greater transparency and save significant money to the customer).

There are many arguments that support alternative offers as this allows innovation in both the process and solutions that can deliver greater value for money or other tangible benefits to taxpayers and stakeholders.
Procurement is opening up for all businesses
The main challenge for procurement is balancing outcomes versus governance to ensure fair and equitable consideration of Offers.
The procurement landscape is evolving. Governments at all levels are taking strong steps to ensure SME, regional, local-sourcing and sustainability criteria are applied to procurement arrangements, and many are standardising contracts for low-risk engagements (for example reducing the minimum levels of insurance).  While some bids encourage alternative tenders, others do not.  Check the documentation to be sure.
Where an alternative offer is accepted, it must not replace a compliant tender.  It must be submitted in addition to a compliant bid so that all bids can be evaluated like-for-like before alternative options are considered.
Whilst it creates more work, don’t dismiss the option to consider putting in an alternative offer if you truly have an innovation or better way of solving a customer problem. This can differentiate you from the competition.
If your organisation is inexperienced in tendering, or routinely leaves everything to the last minute,  it is easy to make mistakes that impact the compliance aspects of your bid submission rendering your submission being non-admissible for evaluation.  Bidding should be treated as an investment in time and resources, not a last minute scramble to throw your hat in the ring. It is therefore essential to understand how to deal with compliance issues in the tender. Read all of the documentation, take notice of the procedural rules and conditions of contract (handy tip: keep a checklist of all of the ”must have”, “should have” clauses).
Keeping a compliance matrix and using it as a working and review checklist is an efficient way to ensure you meet all of the compliance requirements.
If you’re prepared to do what is required to meet tender process requirements, can follow instructions and think you are a good fit to become a government supplier, then you can respond to a tender.
Looking for more help to understand how to improve your tender compliance?  Here’s another article that may interest you.
5 Tips to Avoid a Non-Compliant Tender

 

Whitepaper #9: How predictive modelling improves bid economics and outcomes

Data science and bid management are converging
Do you have line of sight visibility of your bid risk and performance?
The cost to your business for the chance to win a contract is considerable, and winning the wrong project can financially ruin your organization. In large corporations, the cost of bidding for work for a chance to win one in five bids is around three percent of a contract’s value.1,2 Smaller companies, meanwhile, pay as much as six percent of their turnover with even smaller odds of success.3
Too often, bidding teams focus on opportunities to fill their pipeline and submit proposals for the business, but an inherent risk exists within bidding when pursuit becomes a numbers game.  It is the processes and the decision-making that ultimately determine contractor bidding success.
Capability to accurately predict and effectively manage bidding risk and cost factors is critically important and can give your organization a major competitive advantage – if your bidding team captures the right data throughout the bidding cycle.
If your business runs multiple bids simultaneously, how are you tracking and reporting your key metrics and other time-series process measurements throughout your organisation?
Bid analytics in bid management
Until recently, bid analytics have been extremely difficult to implement. The challenge with measuring the true cost and return on investment in bidding boils down to the complexity of activities performed across the various stages of a bid and the sheer volume of variables that impact outcomes.
Since research into competitive bid modelling started in the 1950s, predictive analytics regarding bid outcomes has largely focused on pricing data4,5,6. But it is insight, not just hindsight, that delivers the greatest benefit for using analytics in bid management.
Today, new developments in bid automation, big data and machine learning are converging to solve long-held issues with bid risk management. This includes the capacity for an impartial bid/no bid decision, plus the ability to identify and understand problems or to identify a competitive advantage. The power to factor in qualitative and quantitative historical data, and to apply hypotheticals to scenarios and review their impact upon the business delivers the potential to transform an organization’s competitive performance.
Bid teams and organizations can take simple steps today that will build business value and lay a strong foundation for a roadmap of data, analytics, and advanced machine learning as this emerging technology matures for the bidding industry.
Closed-loop continuous improvement systems
Unlike their sales counterparts who rely on customer relationship management (CRM) systems, most bid teams have lacked effective systems for centralizing and standardizing bid management processes end-to-end. And, as a result, bid management practice has typically remained in silos and workflow digitized in patches. Perhaps this practice results from major decisions too often made on heuristic assumptions that key players will automatically learn strategies on their own.  That is why the solution design has traditionally relied on tacit knowledge from these key individuals.
Closed loop continuous improvement systems have been researched and successfully applied in quality management practices across industries such as manufacturing, banking, supply chain, and customer service.  A closed loop system facilitates the standardization and capture of data across an entire workflow or connected processes — making it ideal for bid management and analytics to work effectively as illustrated in Figure 1.
 

 
 Source: Nyree McKenzie, Bidhive
Figure 1: Bid management end-to-end process as a closed loop cycle
Among other benefits, by capturing all inputs and metrics across an end-to-end process, the closed-loop continuous improvement system and its data become more valuable to the bidding organization over time as it learns the relational factors and data variables generated by pricing, competitors, customer evaluation, or even different bid teams.
Machine learning now makes it possible to process tremendous amounts of data much faster and more comprehensively than human capabilities could manage. But first, companies must capture rich historical bid data – ideally in a closed loop continuous improvement system – for analysis.
Optimizing bidding data for analytics
The usefulness of bid data for analytics relies on training datasets of standardized and categorized data.
In its raw form, bidding data can be difficult to use. It’s often fragmented and inconsistent, but the primary issue with bid data for analytics is missing contextual information, such as the team who worked on the bid, the buyer that chose the solution, and the other bidders in the competition. As patterns change over time, the type of data can become extremely complex and unstructured.
To overcome these issues, new methods for capturing, aggregating, and correlating historical bidding data into machine-readable formats are now being made available.
Meanwhile, the bidding organization can start to build analytical capability by applying quality rules to data and processes. Embedding data standards into bid management systems via mandatory fields or drop-down lists will assist the bidding process with consistent data capture, categorization, and standardization. Implementing a culture of data quality and analysis, such as a documented win-loss review process after each bid is submitted will capture that critical contextual data required to drive the business to a point where analytics can provide reliable decision-making support.
What data should bid teams capture?
Whether a continuous improvement system for bid management has been implemented or not, the valuable bidding data that companies can begin to collect and categorize includes (but is not limited to):

Buyer/customer
Opportunity description
Procurement method
Company business line
Bid/no/bid decision
Bid team
Win/loss outcome
Contract award price
Competitors.

For companies starting on a bid analytics journey, a good starting point is to consider defining some questions and then identifying the data that you know is relevant to answering important issues.
As examples:

Capture the number of incoming tender opportunities and create a digital bid register (or bid board).
Track how many bids progress from open market to qualification, to bid/no bid, to submitted, and won/loss.
Analyze bids submitted and won by value, and by volume.
Compare win/loss ratio (won bids compared to lost bids).
Capture ratio (won bids divided by qualified submitted bids).
Determine win ratio for customers, both new and incumbent.
Cite reasons for bid/no bid decisions, and win/loss outcomes.
Determine diversity of customers.
Discover percent of bids to core customers (total bids from core customers/total number of submitted bids).
Research opportunities month-to-month (are they increasing or declining? Do seasonal trends exist?).
Mark up (or profit margin) the percent of influence on the win ratio.
Research the percent of bids across business lines.
Know your team resources and capacity.

Qualitative data of value includes reasons for won/loss outcomes that can help the business to uncover opportunities for additional training, resources, pricing strategy or alternative teaming which can influence an outcome.
What will we learn?
Predictive analytics can help you identify, with a high degree of probability, what will happen in the future. Then, more advanced prescriptive analytics can optimize the data to make recommendations for developing a strategy based on factors surrounding situations or scenarios, resources, and past or current performance.
In a practical setting, prescriptive analytics would help companies forecast their pipeline, and the resources that will be needed or impacted if anything changes. Summarizing and using this information could not only deliver substantial efficiencies but it would allow companies to free up their business development time to refocus on other, higher value pursuits or activities.
Within a bidding context, you can use predictions to provide scores in rank order of likely future performance such as the likelihood of a bid progressing to next stage; or its probable success or failure; and likely profit margin of the contract; plus, additional revenue opportunities which can ultimately determine a bid/no bid decision.
We can also use the data to optimize bid processes and support corporate strategy by using correlation analysis to drill down to diagnose why certain events took place. As an example, ask yourself, was the win-to-loss ratio low because of poor bid qualification, misaligned solution, or pricing strategy; or was it symptomatic of something greater within a business line or team?
Generally speaking, managers can reduce the variability of outcomes by using data analysis to identify root causes from correlations or to adapt their strategies with more clarity, such as reasons why a business line is consistently winning or losing bids in a particular market.
Other important implications for a closed loop continuous improvement system in the future include recommendation engines that use machine learning to enable suppliers to search appropriate bidders and vice versa. The technology would open competition for procurement to discover unknown companies which are suitable for its tender. Conversely, it could connect bidders to new opportunities that are not already in their pipeline. By working bio-directionally, the system would be able to unite people, processes, and information across the value chain.
Conclusion
For a mission critical function like bid management, designing a model that can drive decisions and actions to reduce risk in near real time will be a key differentiator for companies seeking to achieve competitive advantage. This will free up bid teams to make the most of their ability to strategize.
Companies that are already planning their data roadmap and analytical capability and understand the business context and how it applies to the bidding processes will achieve the greatest impact with the technology. But, as with anything strategic, it will be the people, not the technology, who make sense of the data and give it meaning.
 
END NOTES

Turner, J.R. (Ed). (2003) Contracting for project management. Burlington, VT, Aldershot, Hants, England: Gower, Ashgate Publishing Limited, p. 118.
Deloitte Access Economics (2015). Economic benefits of better procurement practices, Consult Australia. p. 22.
Dalrymple, J, Boxer, L., Staples, W. (2006). Cost of tendering: Adding cost without value? Clients Driving Innovation: Moving ideas into practice (12-14 March), Cooperative Research Centre (CRC) for Construction Innovation, p.9-10.
Rothkopf, M. H. (1969). A model of rational competitive bidding, Management Science 15(7): 362–373.
Rothkopf, M. H.; Harstad, R. M. (1994). Modeling competitive bidding: a critical essay, Management Science 40(3): 364– 384. http://dx.doi.org/10.1287/mnsc.40.3.364
Harstad, R. M.; SašaPekec, A. (2008). Relevance to practice and auction theory: a memorial essay for Michael Rothkopf, Interfaces 38(5): 367–380.

 
 

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Data driven bid management: how technology is reshaping the profession

Are you tracking win rates, team performance and analysing the market?
Bid-related data is increasingly being used by companies to improve and enhance all bidding and tender related activities. We discuss why bid data is being increasingly being captured and analysed, and how it can help you achieve competitive advantage.
Bidding strategy is one of the important strategies in the early stages of a project’s lifecycle to shape a winning bid, and ultimately project success. The quality of decision making at the pre-contracts stage can enable a business to adapt quicker than competitors to the opportunities and threats presented in the market, and it can also unlock potential to develop other intangible competitive differentiators in the business identified through team dynamics, service methodologies, and technical expertise. Now, more than ever before, data is helping to round out the decision making process – making it less about gut feel, and more about getting the answers needed to win the work that the company wants.
Why is tracking bid data important?
Gone are the days of scatter gun bidding. This is expensive and draining on company resources. Knowing where to focus time and energy means the company can put their best teams on the bids they want to win.
By combining financial and non-financial data in bid analysis, we can provide deeper insights into relational factors behind bid success and failure.  Having this data paints a more complete picture, allowing the company to create a bidding profile to learn more about bid performance by team, by business line and by customer.
By adding external market data, companies can enrich their understanding by benchmarking their performance against competitors.  Additionally, with more meaningful insights companies can identify patterns and outliers, helping them quickly adapt to market forces, and arming them with intelligence that can improve their competitive strategies and win rate.
What bid data should bidders be tracking?
Getting started with analytics is about exploring the available data to generate new knowledge and insights.  For bidding companies starting on a bid analytics journey, a good starting point is to consider defining some questions and then identifying the data that you know is relevant to answering them.
For example:

Capturing number of incoming tender opportunities and creating a digital bid register (or bid board).
How many bids progress from open market to qualification, to bid/no bid, to number submitted, and to won / loss?
Bids submitted and won by value, and by volume
Win/loss ratio (won bids compared to lost bids)
Capture ratio (won bids divided by qualified submitted bids)
Win ratio for customers new and incumbent
Diversity of customers
% bids going to core customers (total bids from core customers / total number of submitted bids)
Opportunities month on month (increasing or declining? Are there seasonal trends?)
Mark up (or profit margin) % influence on win ratio
% bids across business lines.

Tracking tender and contract market data
In addition to tracking your previously awarded bid results, open market data published by public sector businesses (and aggregated by Bidhive) now makes it more accessible to capture topline tender and contract data to supplement the bid data you are already capturing within your business.  Combined, this data can be used to deliver you competitive advantage because it gives you access to:

Competitor price points
Market intelligence such as competitor contract durations, including renewal options
Previously awarded bid results
Upcoming planned public sector opportunities.

A key advantage of including market data in your bid analysis is the ability to use it for benchmarking against competitors; quote with more certainty; and optimally price your bids so that you neither price too high and lose the bid nor price too low to lose on margin (leaving ”money on the table”).
Bid teams bring incredible value to organisations and quantitative analysis allows them to put hard numbers to their successes and opportunities. Adding qualitative analysis to understand reasons for won/loss outcomes can help the business to uncover opportunities for additional training, resources or alternative teaming which can influence an outcome.
As with anything strategic, it will be the people, not the technology, who make sense of the data and give it meaning.  When embarking on a data analytics initiative, it is important to remember that business intelligence is the work of the people who apply it. The data warehouse is simply the enabler to support you in the process.
updated 21 July 2022. Originally published 7 August 2021.

 

What’s the difference between a non-compliant and non-conforming tender?

Non-compliance vs non-conformance in tendering
Knowing the difference between a non-compliant and non-conforming tender can be make or break for bidding success.
Tenders provide businesses of all sizes with access to various opportunities to sell to the government, but navigating the process can be daunting. In this article we explain the difference between a non-compliant, non-conforming and alternative offer (or alternative tender) and why understanding the language and interpretation of the definitions is important (and what trips people up).
What is a compliant tender?
Understanding the conditions of tendering and the rules you need to follow can save you a lot of time and money. Reading through the wordy tender Specifications is often considered a laborious part of the tender response process, but failure to meet compliance requirements or following the process properly can result in your submission being disqualified as being a non-compliant tender.
When a Request for Tender (RFT) – or Invitation to Tender (ITT) – is released, all respondents are given the same amount of time to prepare and submit their best offers. At the close of the competitive tender period an evaluation panel will initially examine all submissions (referred to as ‘bid submission’) for compliance with the conditions of tender. This is often listed in tender documentation as the mandatory criteria, which are pass or fail criteria but are not generally included in scoring submissions.  For example, a compliant tender is one that satisfies the conditions of tender.  Tender documentation will include very specific requirements for information in a format that can be compared to other bids.  Below is an example of a tender evaluation comparison matrix.

What are some examples of a non-compliant tender?

Missing the submission deadline
Exceeding word count
Failing to complete and execute all of the tender return schedules, and in the format required.

When these conditions are not met, the bid submission can be deemed non-compliant and eliminated from further consideration. In other words, the first step of evaluation is disqualification.
What is a non-conforming tender?
When bid submissions proceed to the next stage of evaluation, they will be assessed against the Specification. For example:

A statement of conformance to the tender Specification or a list of non-compliances (eg. minimum insurances)
Verification that the bid submission fully meets the requirements of the goods or services (eg. industry standards that must be adhered to ie. safety or ISO quality standards).

Non-conforming tenders may be set aside from further consideration, but sometimes a non-conforming tender may be considered provided a conforming Tender is also submitted.  This is what is usually termed an alternative offer.
What are some examples of non-conformance in tender responses?

Failure to meet quality requirements and major ISO standards
Substitute product or service (this could be evaluated as either inferior compared to the stated requirements, or an innovation if presented convincingly – see alternative offer below).

In quality management, non-conformity is a deviation from a specification, a standard, or expectation. In bidding and tendering, a non-conforming tender can also be an alternative offer.
What is an alternative offer (or alternative tender)?
An alternative offer, or alternative solution is where a supplier responds to a tender with a proposed different solution or approach to the Specification.
This is a non-conforming tender, however, it may still be considered and the tender documentation will specify the conditions and requirements for, and any limitations placed on, submission of alternative offers.
Usually, it must be lodged with a complying tender (eg. you might need to submit two bid submissions). If only an alternative offer is lodged then it might be assessed as non-conforming to the conditions of tender.
An alternative offer is a bid for a product or service that delivers improved functionality to the goods or services described in the Specification which could deliver greater value for money outcomes, including advancing sustainability goals.
What are some examples of an alternative offer (or alternative tender)?

Where a bidder proposes modifications to what has been described in the Specifications which may provide a better way to achieve an outcome. One example might be a call for tenders for petrol vehicles, with an Offer submitted for a more sustainable solution; another example might be a completely new product, technology or methodology you propose to use in an infrastructure project that will greatly reduce environmental impact
Alternative pricing model (eg. the tender may request a fixed price but a different pricing model could provide greater transparency and save significant money to the customer).

There are many arguments that support alternative offers as this allows innovation in both the process and solutions that can deliver greater value for money or other tangible benefits to taxpayers and stakeholders.
Procurement is opening up for all businesses
The main challenge for procurement is balancing outcomes versus governance to ensure fair and equitable consideration of Offers.
The procurement landscape is evolving. Governments at all levels are taking strong steps to ensure SME, regional, local-sourcing and sustainability criteria are applied to procurement arrangements, and many are standardising contracts for low-risk engagements (for example reducing the minimum levels of insurance).  While some bids encourage alternative tenders, others do not.  Check the documentation to be sure.
Where an alternative offer is accepted, it must not replace a compliant tender.  It must be submitted in addition to a compliant bid so that all bids can be evaluated like-for-like before alternative options are considered.
Whilst it creates more work, don’t dismiss the option to consider putting in an alternative offer if you truly have an innovation or better way of solving a customer problem. This can differentiate you from the competition.
If your organisation is inexperienced in tendering, or routinely leaves everything to the last minute,  it is easy to make mistakes that impact the compliance aspects of your bid submission rendering your submission being non-admissible for evaluation.  Bidding should be treated as an investment in time and resources, not a last minute scramble to throw your hat in the ring. It is therefore essential to understand how to deal with compliance issues in the tender. Read all of the documentation, take notice of the procedural rules and conditions of contract (handy tip: keep a checklist of all of the ”must have”, “should have” clauses).
Keeping a compliance matrix and using it as a working and review checklist is an efficient way to ensure you meet all of the compliance requirements.
If you’re prepared to do what is required to meet tender process requirements, can follow instructions and think you are a good fit to become a government supplier, then you can respond to a tender.
Looking for more help to understand how to improve your tender compliance?  Here’s another article that may interest you.
5 Tips to Avoid a Non-Compliant Tender

 

Whitepaper #9: How predictive modelling improves bid economics and outcomes

Data science and bid management are converging
Do you have line of sight visibility of your bid risk and performance?
The cost to your business for the chance to win a contract is considerable, and winning the wrong project can financially ruin your organization. In large corporations, the cost of bidding for work for a chance to win one in five bids is around three percent of a contract’s value.1,2 Smaller companies, meanwhile, pay as much as six percent of their turnover with even smaller odds of success.3
Too often, bidding teams focus on opportunities to fill their pipeline and submit proposals for the business, but an inherent risk exists within bidding when pursuit becomes a numbers game.  It is the processes and the decision-making that ultimately determine contractor bidding success.
Capability to accurately predict and effectively manage bidding risk and cost factors is critically important and can give your organization a major competitive advantage – if your bidding team captures the right data throughout the bidding cycle.
If your business runs multiple bids simultaneously, how are you tracking and reporting your key metrics and other time-series process measurements throughout your organisation?
Bid analytics in bid management
Until recently, bid analytics have been extremely difficult to implement. The challenge with measuring the true cost and return on investment in bidding boils down to the complexity of activities performed across the various stages of a bid and the sheer volume of variables that impact outcomes.
Since research into competitive bid modelling started in the 1950s, predictive analytics regarding bid outcomes has largely focused on pricing data4,5,6. But it is insight, not just hindsight, that delivers the greatest benefit for using analytics in bid management.
Today, new developments in bid automation, big data and machine learning are converging to solve long-held issues with bid risk management. This includes the capacity for an impartial bid/no bid decision, plus the ability to identify and understand problems or to identify a competitive advantage. The power to factor in qualitative and quantitative historical data, and to apply hypotheticals to scenarios and review their impact upon the business delivers the potential to transform an organization’s competitive performance.
Bid teams and organizations can take simple steps today that will build business value and lay a strong foundation for a roadmap of data, analytics, and advanced machine learning as this emerging technology matures for the bidding industry.
Closed-loop continuous improvement systems
Unlike their sales counterparts who rely on customer relationship management (CRM) systems, most bid teams have lacked effective systems for centralizing and standardizing bid management processes end-to-end. And, as a result, bid management practice has typically remained in silos and workflow digitized in patches. Perhaps this practice results from major decisions too often made on heuristic assumptions that key players will automatically learn strategies on their own.  That is why the solution design has traditionally relied on tacit knowledge from these key individuals.
Closed loop continuous improvement systems have been researched and successfully applied in quality management practices across industries such as manufacturing, banking, supply chain, and customer service.  A closed loop system facilitates the standardization and capture of data across an entire workflow or connected processes — making it ideal for bid management and analytics to work effectively as illustrated in Figure 1.
 

 
 Source: Nyree McKenzie, Bidhive
Figure 1: Bid management end-to-end process as a closed loop cycle
Among other benefits, by capturing all inputs and metrics across an end-to-end process, the closed-loop continuous improvement system and its data become more valuable to the bidding organization over time as it learns the relational factors and data variables generated by pricing, competitors, customer evaluation, or even different bid teams.
Machine learning now makes it possible to process tremendous amounts of data much faster and more comprehensively than human capabilities could manage. But first, companies must capture rich historical bid data – ideally in a closed loop continuous improvement system – for analysis.
Optimizing bidding data for analytics
The usefulness of bid data for analytics relies on training datasets of standardized and categorized data.
In its raw form, bidding data can be difficult to use. It’s often fragmented and inconsistent, but the primary issue with bid data for analytics is missing contextual information, such as the team who worked on the bid, the buyer that chose the solution, and the other bidders in the competition. As patterns change over time, the type of data can become extremely complex and unstructured.
To overcome these issues, new methods for capturing, aggregating, and correlating historical bidding data into machine-readable formats are now being made available.
Meanwhile, the bidding organization can start to build analytical capability by applying quality rules to data and processes. Embedding data standards into bid management systems via mandatory fields or drop-down lists will assist the bidding process with consistent data capture, categorization, and standardization. Implementing a culture of data quality and analysis, such as a documented win-loss review process after each bid is submitted will capture that critical contextual data required to drive the business to a point where analytics can provide reliable decision-making support.
What data should bid teams capture?
Whether a continuous improvement system for bid management has been implemented or not, the valuable bidding data that companies can begin to collect and categorize includes (but is not limited to):

Buyer/customer
Opportunity description
Procurement method
Company business line
Bid/no/bid decision
Bid team
Win/loss outcome
Contract award price
Competitors.

For companies starting on a bid analytics journey, a good starting point is to consider defining some questions and then identifying the data that you know is relevant to answering important issues.
As examples:

Capture the number of incoming tender opportunities and create a digital bid register (or bid board).
Track how many bids progress from open market to qualification, to bid/no bid, to submitted, and won/loss.
Analyze bids submitted and won by value, and by volume.
Compare win/loss ratio (won bids compared to lost bids).
Capture ratio (won bids divided by qualified submitted bids).
Determine win ratio for customers, both new and incumbent.
Cite reasons for bid/no bid decisions, and win/loss outcomes.
Determine diversity of customers.
Discover percent of bids to core customers (total bids from core customers/total number of submitted bids).
Research opportunities month-to-month (are they increasing or declining? Do seasonal trends exist?).
Mark up (or profit margin) the percent of influence on the win ratio.
Research the percent of bids across business lines.
Know your team resources and capacity.

Qualitative data of value includes reasons for won/loss outcomes that can help the business to uncover opportunities for additional training, resources, pricing strategy or alternative teaming which can influence an outcome.
What will we learn?
Predictive analytics can help you identify, with a high degree of probability, what will happen in the future. Then, more advanced prescriptive analytics can optimize the data to make recommendations for developing a strategy based on factors surrounding situations or scenarios, resources, and past or current performance.
In a practical setting, prescriptive analytics would help companies forecast their pipeline, and the resources that will be needed or impacted if anything changes. Summarizing and using this information could not only deliver substantial efficiencies but it would allow companies to free up their business development time to refocus on other, higher value pursuits or activities.
Within a bidding context, you can use predictions to provide scores in rank order of likely future performance such as the likelihood of a bid progressing to next stage; or its probable success or failure; and likely profit margin of the contract; plus, additional revenue opportunities which can ultimately determine a bid/no bid decision.
We can also use the data to optimize bid processes and support corporate strategy by using correlation analysis to drill down to diagnose why certain events took place. As an example, ask yourself, was the win-to-loss ratio low because of poor bid qualification, misaligned solution, or pricing strategy; or was it symptomatic of something greater within a business line or team?
Generally speaking, managers can reduce the variability of outcomes by using data analysis to identify root causes from correlations or to adapt their strategies with more clarity, such as reasons why a business line is consistently winning or losing bids in a particular market.
Other important implications for a closed loop continuous improvement system in the future include recommendation engines that use machine learning to enable suppliers to search appropriate bidders and vice versa. The technology would open competition for procurement to discover unknown companies which are suitable for its tender. Conversely, it could connect bidders to new opportunities that are not already in their pipeline. By working bio-directionally, the system would be able to unite people, processes, and information across the value chain.
Conclusion
For a mission critical function like bid management, designing a model that can drive decisions and actions to reduce risk in near real time will be a key differentiator for companies seeking to achieve competitive advantage. This will free up bid teams to make the most of their ability to strategize.
Companies that are already planning their data roadmap and analytical capability and understand the business context and how it applies to the bidding processes will achieve the greatest impact with the technology. But, as with anything strategic, it will be the people, not the technology, who make sense of the data and give it meaning.
 
END NOTES

Turner, J.R. (Ed). (2003) Contracting for project management. Burlington, VT, Aldershot, Hants, England: Gower, Ashgate Publishing Limited, p. 118.
Deloitte Access Economics (2015). Economic benefits of better procurement practices, Consult Australia. p. 22.
Dalrymple, J, Boxer, L., Staples, W. (2006). Cost of tendering: Adding cost without value? Clients Driving Innovation: Moving ideas into practice (12-14 March), Cooperative Research Centre (CRC) for Construction Innovation, p.9-10.
Rothkopf, M. H. (1969). A model of rational competitive bidding, Management Science 15(7): 362–373.
Rothkopf, M. H.; Harstad, R. M. (1994). Modeling competitive bidding: a critical essay, Management Science 40(3): 364– 384. http://dx.doi.org/10.1287/mnsc.40.3.364
Harstad, R. M.; SašaPekec, A. (2008). Relevance to practice and auction theory: a memorial essay for Michael Rothkopf, Interfaces 38(5): 367–380.

 
 

1 in a million chance behind lost bid

REAL STORIES SHARED BY OUR READERS
* Names have been changed
Lost bid blame game all started over the non-compliance and subsequent disqualification of the bid submission.
A major contractor has been shamefully disqualified from a major public sector works program for allegedly failing to correctly complete a mandatory Schedule to their $20M bid.
An inside source from the company shared the news to colleagues at a local bar upon her return from the client debrief.  According to one of the colleagues, despite the company’s bid being highly competitive,  under evaluation rules a key piece of documentation hadn’t been properly filled in, deeming the entire Offer to be non-compliant.
“We drank a few jugs to unpack what happened and learned that key instructions for a Compliance Matrix had been majorly misinterpreted. Later, we returned to the office to kick on and raid the boardroom bar and do some group meditation to calm down and fight the urge to break things,” the source revealed.
“Of the one million emails and attachments that circulated in the RE: RE: RE: RE: RE: RE: RE: RE: RE: email trail and group conversation threads, it was discovered that the fateful Addendum 3 instructions were missed. What are the chances of that happening?” she continued.
“Upon further enquiry it was revealed that the evaluation team clarified in Addendum 3 that they wanted a TLDR (Too Long Didn’t Read) version of the Offer that succinctly addressed all the requirements, but our team had thought they’d done the right thing by laying our matrix out in Shipley style and cross-referenced where the answer could be located in the Offer. Like way-finding for the lazy reader.”
Questions over who was to blame for the oversight has led to a full internal investigation of email file name conventions.
“We’re considering lodging a formal grievance because we don’t believe the award decision was fair. Disqualification and throwing our bid over the wall on the grounds of a technicality is quite frankly, mean. And when the sink hole appears, you coulda shoulda woulda awarded our company that contract.”

The benefits of a centralised bid system

Connect your sales, bid and estimating team – all in one place.
Bid management is a process that brings together internal stakeholders across the business leading up to, and during, a tender. Strategy, bid/proposal solution, risk management and pricing are some of the many aspects that need to be developed, analysed and reviewed at various points along the way. Bid teams – comprised of core bid or proposal managers and the many subject matter experts who will be involved in the solution design and pricing – will often be required to work on several bid projects concurrently and achieve multiple deadlines. These teams also need to conduct market and competitor research to continue to challenge and improve on solution offerings and their costings. A centralised bid system brings everyone, and everything related to the bid, into one place.
With so many bidding opportunities coming to market, and organisations moving to more collaborative yet remote ways of working, those still wrangling spreadsheets are struggling to keep on top of how their business line portfolios are tracking with their bid activity, their status and the outcomes. Many businesses are now looking at at ways to simplify and streamline the process to save time and reduce cost, while enabling more meaningful analysis to help them make better decisions to improve win rates.  If you’re looking at developing a business case to move from spreadsheets to a centralised bid management system, here are some top reasons to make the move.
1. Transparency across the business
Many organisations have document management systems for their day-to-day bidding operations. However, left as standalone systems, these systems often become a minefield of data silos. Failing to capture a 360-degree view of your bidding activity and the outcomes of those bids creates information gaps that can lead to poor results.
A centralised digital bid register will help you gain visibility of current and past bids, bid/no bid decisions, customer timelines and due dates, assigned bid leads and team workloads, contract values and the win/loss outcomes. Importantly, when synched with your CRM all departments in your organisation have a more comprehensive view of the opportunity pipeline and visibility into knowledge that can be shared in collaboration with others across departments. For example, without bridging the sales and bid teams, your sales people might not be aware of a competitive tender, resulting in a potential breach of probity by contacting a customer during the ‘’no contact” period. This can risk disqualification and a missed opportunity (not to mention potential reputational damage).
2. Monitoring bid status and workloads in real time
While CRM software and spreadsheets can help with leads and registering various activities, a centralised bid system will give you the ability to better organise the many time-sensitive deliverables and multiple team members you need to manage across the end-to-end bid process. A centralised bid system enables you to seamlessly manage multiple bids simultaneously, reducing the burden of keeping spreadsheets up to date manually.
Automated notifications and reminders of bid milestones and individual tasks reduces email clutter and lost communication, and top down visibility of section due dates improves compliance and ensures deadlines aren’t missed. Once the bid has been submitted, a central bid system also keeps everyone informed as to the stage of the bid decision (shortlisted/won/lost/withdrawn) so that project pipelines and resources can be planned in advance, while pipeline revenue can be monitored and quickly reported on.
3. Access to content
Sales teams and subject matter experts are expected to work on bids on top of their already busy jobs. As they are time-poor they shouldn’t have to waste time trying to locate the right content for their bids. A central bid system will be able to provide a workspace to support field sales and subject matter experts’ timely input, along with communication tools to help them understand the customer requirements and bid expectations.
Having a central content library and shared drafting space speeds up the process by greatly reducing email clutter. This improves version control and the often-missed content contributions that can accidently be grouped through re:re:re: responses. With a shared workspace team members can go back to previous bids to review their methodologies or field notes; and they can quickly see a summary of what they need to do.  They can can also collaborate and communicate with other team members; they can see writing instructions within that section in real time; and they can receive date reminders as notifications as well as track the status of the review and approval process.
4. Insights to help you win more
Since bidding is data heavy, highly collaborative and time sensitive, capturing the data as it comes to hand in a static spreadsheet can become an administrative burden, leading to the risk of poor compliance, missed deadlines, and the loss of potential new work for your organisation.  Another challenge with spreadsheets is that it often requires an expert to extract and analyse the data to view aggregated performance insights. This is also a missed opportunity for broader team knowledge sharing.
A centralised bid system makes it far easier to get full view of the opportunity pipeline right across the business, enabling executives to prioritise opportunities that are more likely to win. Being able to view past winning bid prices and identifying patterns behind wins and losses also helps to improve bid qualification (bid/no bid decision) and win rate by as much as 20% which can translate to millions of dollars in revenue.
Bidhive makes the time-sensitive procurement bidding process faster and more efficient, with best practice tools and a single source of truth of bidding activity and outcomes to give you competitive advantage. The benefits of using a platform such as Bidhive include efficiency gains to provide return on your bidding investment, and better insights to inform bidding strategy.
Have a CSV file?  Bidhive can map your data to the following columns: name, type, customer, description, contract value, contract value type, status, reference, issue date, start date, due date, actual decision date, business line, bid manager, and job number.  Getting started is as easy as a drag, drop, upload and click.

Government procurement people unanimously decide to extend bid deadlines to just-after-holidays

REAL STORIES SHARED BY OUR READERS
* Names have been changed
Procurement tender deadlines after the holiday season are on trend. That’s the word on the street after it was learned today that procurement departments across the world secretly banded together to sign a bulk purchasing agreement for luxury holidays to be redeemed during the peak Christmas and Easter holiday seasons.
Announcing the agreement at a CIPS conference, Damian Jolly* said the holiday agreement would formalize a long-standing practice, granting procurement departments their rightful annual leave at a good price, while leaving the window open for suppliers to work on their tenders “in their own time” or “on the beach” rather than in the office where they may have conflicting priorities and added pressure.
“We recognize that tenders are high pressure, fast paced and terribly expensive for companies, so we want to give suppliers the breathing space to work on them, and there’s no better time than Boxing Day or Easter Sunday when the phones aren’t ringing or the bosses aren’t breathing down your neck. And when we get back from our holidays feeling refreshed that’s the best time for our evaluators to assess the tenders that have been waiting for them for 4 weeks. Win win for everyone,” he said.
Vanessa* from the Association of Proposal Management Professionals however, said members of their global peak body, which represents suppliers, weren’t consulted about the decision.
“We’ve never been consulted, and yet our members are filling in 15 page Social Procurement questionnaires instead of breaking bread or guzzling wine with mates. Instead, they’re answering responses about their commitment to gender equity, their human rights track records and sustainable business practices.  Do you see the irony here? Our members are modern slaves to procurement, with latch key kids making TV dinners while husbands or wives are frustrated as hell at having to go solo to the theme parks to entertain the kids while the pre-paid holiday apartment dining table has turned into a hot-desk mess. Don’t even get me started in trying to reach Gary from Procurement with clarification questions. His out of office email is on, and the message states that he’s not in mobile reach and only has intermittent access to emails so he won’t be able to respond to clarification questions until he returns from Fiji.”
Bidhive has since run its own survey of bidders, with 99.9% of respondents admitting that they had forgone holidays and happy family memories to prioritize a tender deadline.
The survey delved deeper into respondents’ sentiments around who is responsible for employee wellbeing during a tender competition: the employer or procurement.  Responses were overwhelmingly supportive and sympathetic towards employers, with 99.9% of respondents viewing the employer as the victim.
Given a multiple choice response for how suppliers feel when forced to respond to a tender during the holidays, 99.9% chose option C: “”You can #$!% your tender process procurement people. Happy #^##*#* Christmas or Easter to you”.
Bidhive has contacted various procurement representatives for comment, but our requests have so far been unanswered.

 
 
 

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