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It’s time to change the way you think about bidding: How procurement has changed to benefit businesses

October 8, 2021

Globally, there’s more procurement opportunities being published, and that means more bidding.

Imagine you could pitch to a client that is extremely stable; they have lots of money to spend, regularly offering long-term or rolling contracts and they’re ready to invest in small, medium and enterprise businesses across almost every industry. Well now you can, more than ever before. 

Worldwide, there has been a shift in the scale and frequency of tenders coming to market, making bidding the preferred method to procure goods, services and works for governments worldwide.   The tender process was originally developed to reduce government exposure to risk on large and complex contracts like those in construction. 

With recent reforms however, the public sector is releasing more, smaller contract opportunities, presenting new ways to win business for vertical industry suppliers and small and local businesses wanting a share of the $15 trillion in government spending each year. 

How governments are stimulating business for small, local & minority businesses 

Even before COVID-19, a global shift in government’s commitment to supporting small, local and minority businesses was underway.  Since the pandemic however, governments have expedited procurement reform to provide fair and equitable access to public contracts and stimulate economic recovery by spending locally.

These measures include minimum quotas of expenditure, in addition to the opportunity for direct engagement or closed (limited competition) tender opportunities for small and local businesses on contracts of up to $250,000.  

All of this means that bidding is no longer just for the top end of town, and that small businesses or those new to the tender process should work on building their bidding capability. On the flipside, those large or foreign incumbents that have previously maintained contracts year-on-year almost by default may find themselves displaced if they too, don’t pay attention to their bidding process and become complacent. 

How government outsourcing has changed 

Another contributor to higher volumes of smaller and lower value contracts being released for tender is the broadening of Government’s outsourcing footprint. Private sector services were traditionally procured  for non-core business activities such as construction and infrastructure, technology and professional services, but with funding challenges, government is divesting its involvement in direct service delivery and “commissioning”  public services to non-profit and private sector organisations in areas such as health, employment and community support services. 

Consequently, bidding activity and advertisements for bid managers has increased in volume and it continues to grow as companies seek to keep up with the demands of planning and managing the multitude of tender opportunities in the market.    

Winning a major contract through open competitive bidding can significantly boost organisational growth and profit by creating a pipeline of work and job security.  And with more opportunities for small businesses being created, those businesses that commit to getting ‘bid fit’, and continually improving their bid capability and capacity will gain and maintain a competitive edge. 

Where to start improving my bidding capability (bid “fitness”)?  

Most organisations start with an immature, ‘reactive’ bid process or environment. That is, rather than taking a strategic approach to the bid management practice, end-to-end, each stage of the bid is managed in a disconnected, inconsistent and decentralised way. 

In an example of a reactive bid organisation: an opportunity may become evident at a late stage, and all hands are suddenly pulled off business as usual and on deck to compete for the contract. Sometimes this even happens before there is an adequate assessment of the business’ likelihood to win the bid, or to even fulfil the contract.  

The focus of almost all involved in a bid in this reactive state is deadlines. Deadlines rule the team because at this immature state, bid processes are disorganised, communication is haphazard, and almost all content is written from scratch. In this pressured environment, the response is written in haste, and the final document is incohesive.

As a result, instead of being a compliant and compelling solution backed with evidence, the submission reads as though a set of different authors have scrambled to throw a response together.  Improving your bid fitness is an investment that will see returns in the form of more efficient processes and less staff churn – saving you time and money, and more government contracts that generate more revenue.

Further, a continuous improvement program will see your business build capacity and capability – which contributes to a more efficient process and improved bid success rate.  The process of maturing your bidding operation should be a staged approach. The best place to start to improve bid fitness is:  

  1. Commit to learning the bid management process, end-to-end 
  2. Implement standard processes that are flexible  
  3. Invest in centralised systems and automation 
  4. Invest in capturing data for analysis 
  5. Commit to maturing process through continuous improvement (annual review of KPIs).

 By learning the bid management process, end-to-end, you’ll be in a position to assess your current ‘bid fitness’ and resources required to strategically build your bidding capability so that you build a winning team. Assessing your current bid fitness will also provide a baseline measurement for your continuous improvement initiative.  Some metrics to measure bid fitness include:  

  • your bid win rate 
  • your bidding ‘efficiency’ and return on bidding investmentBidding capacity (link to article about measuring Bid Team Churn 
  • centralisation – how many systems are required to complete a bid? 
  • systemisation – is workflow standardised to achieve more predictable outcomes? 
  • digitisation and automation – is your team leveraging technology to maximise efficiencies? 

 We’ll talk about these measures, and other work-winning strategies to improve your bid capability in our next series article.      

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