Tenders: Key Elements of a Winning Bid

When it comes to awarding a tender, there are many factors an Owner will take into consideration and it is important to know that decision making is rarely based purely on price. Whilst price may be a major factor, Owners are on the hunt for the team with the greatest capability to deliver good cost and non-cost outcomes over the long term, especially when it comes to service contracts.

Teams win tenders

With this in mind, a winning bid team must clearly demonstrate their inherent capability, both in terms of experience and an authentic cohesiveness. Owners are assessing your teams inherent capability in a number of ways, some more intuitive than others.

As well as initial target costs (and beyond the written submission of technical aspects of your solution), your team will be assessed on:

  • A demonstrated capability to drive efficiency in future years via initiatives yet to be identified;
  • their confidence in answering questions on its proposed solution
  • the way they interact
  • visible quality of leadership
  • the energy it projects

Owners realise that a successful project requires a strong and united team whose collective force will assist them in delivering on both known KRAs and overcoming the unknowns that will appear along the way. When bids are competitive in terms of price and approach, the strength of the team becomes even more critical in the decision making process.

Winning TendersSubmission basics

Here are some basics to keep in mind when you’re working on your next submission:

Meet the team

To have a good chance of succeeding, a proponent must be represented at presentations or interviews by the key team members that it proposes to assign to the job.  Typically the owner does do not want to meet the marketing team – it wants to meet the people that will deliver the services – hence it is important that the team presenting the proposal has full ownership of the written submission content, and comes across as a fully prepared high-performance team committed to the job.

Forget the sell

Under a closed-book tender or arms-length selection process the focus of the effort is to “win the job”.  However, proponents who approach a long-term services contract selection process with that focus are much less likely to succeed than a proponent that focuses on “delivering the services”.  The Owner’s evaluation panel is always more impressed by a team which is knowledgeable and enthused about its proposed approach than one which is just out to sell.  Aside from the subtle shift in messaging, a focus on delivery forces the team to understand the client’s issues, risks, opportunities and challenges, and start developing ideas for addressing these – which is the foundation for becoming the team they want to appoint.

Build the team

A well-directed proponent team will focus on delivering the services and their internal team dynamics.  By the time they get to presentation or interview stage they are already performing strongly as a team – for instance they are obviously comfortable with each other and are relaxed even under interview pressure; they give answers or engage in conversations quite naturally; they support each other yet are able to debate and challenge each other; there is no sense of hierarchy in the team (senior members naturally defer to other team members where appropriate); and they understand and believe the content of their written submissions because they have obviously been closely involved in the content.

There are no shortcuts to achieving this kind of team performance and non-price impact so it’s important for leaders to immediately start the team spending time working together with a common focus.  Furthermore, it is important that the nominees for senior roles are fully involved in team preparation, as a senior leadership figure who is not “bonded” with the team can be quite damaging to client perceptions.

What goes into a winning tender6 components of a successful bid

Ken Lowe, Managing Director at Systemix has worked with numerous proponents across a range of industries in preparing successful tenders. He has identified 6 key ‘streams’ in the preparation of a successful bid:

1.      Market Stream

This part of the process requires investigation to understand the key drivers of the project as well as the stakeholders, Key Results Areas and current trends. This information then informs the development of a unique selling proposition, potential ‘win themes’ and honest “why us?” elements that fit with your brand as well as the Owners value drivers.

2.     Commercial Stream

At this stage of the process, the focus turns to establishing internal alignment and developing a compliant and innovative offering.

Key activities in this stream typically include the following:

  • Understanding the Owner’s proposed commercial framework
  • Focussing on aspects which will make a ‘fair’ offer look less competitive or which present opportunities for a ‘fair’ offer to look super-competitive
  • Quantifying and pricing risks or costs passed to the Service Provider under the Owner’s proposed commercial framework
  • Identifying an optimal balance between ‘compliance’ to the proposed T&Cs (minimising departures which the Owner must concede) versus ‘departures’ (minimising headline price to be offered)
  • Reviewing the potential for innovative alternative offers (particularly around incentives & risks) and ranking them in terms of acceptability and impact
  • Supporting one or more reviews of the final offer from a commercial and legal perspective
  • Preparing the team for commercial alignment discussions or negotiation sessions.

3.     Organisation & Culture Stream

With a basic framework in place, the team has begun to form and this stage is about cementing the operational structure and organising principals at the foundation. The team and its leaders must take steps to understand each other’s skills and knowledge (and that of the team as a whole) in order to work effectively and plan ahead, and work also begins on developing a “vibe”. The all-important non-price elements of your bid are now being built.

Key activities in this stream typically cover:

  • Identifying the principles which should be used to shape the organisation structure for the proposed team, then developing a coherent structure enabling clear accountability and agility
  • Developing a charter of operations as a focus for the goals and culture of the proposed team
  • Developing skills and knowledge in technical, human, and commercial areas which are relevant to the ‘essence’ of the solution and the approach being offered
  • Developing  the “vibe” – working with the team in a variety of real task-related situations whilst simultaneously developing shared awareness of self and team dynamics, and building the skills and behaviours that underpin high performance
  • Ensuring through mock interviews and workshops that that a high-performance culture will be tangible during selection and delivery.

4.     Staging & Methods Stream

It’s time to work on the project and develop an appreciation of job challenges and overall strategies for delivery. As well as the technical aspects of delivery, the team should spend time on framing and expressing integrated methods and approaches and developing the skills to communicate those effectively.

5.     Pricing & Targets Stream

The proponent team needs a clear philosophy and plan for price and target development and should have an approach through to post-award phase. With this in place, the focus can turn to ways to fast track mobilisation to ensure success.

Key activities in this stream typically include:

  • Building a clear pricing philosophy for both input costs and margin, that aligns to the published evaluation criteria
  • Developing a pricing plan with clear tasks, accountabilities and timelines for constructing each price and non-price target required in the tender submission
  • Testing the emerging price proposition against the pricing philosophy, in particular with respect to pricing of risks and coherence with the commercial terms
  • Developing the approach and process for continuous improvement, including credibility of ongoing cost reduction methods, and the right balance between known improvements and ‘good faith’ expectations.

6.     Submission & Logistics Stream

The design, development and production of a physical document is the final stage in the preparation process. Start by developing a structure and writing plan, refine content and then plan review and management.

“These workstreams are the visible manifestation of a proponent organisation which – to be successful – needs to be driven by an effective ‘core’ of management, leadership, and strategy / governance”, Ken explains.

Working through each area, and tailoring them for the individual client, the Systemix approach prepares proponents for both the price and people evaluation they will encounter during the process.

Good Leadership wins TendersThe importance of leadership

Generally, teams that ‘crank out the tender’ without creating an environment of effective management and leadership, are often perceived by the client as focused on the sale rather than focused on excellent delivery.  Whilst task-focused management is essential to get the tender in the box, a high-performance team (with a high probability of success) requires effective leadership and governance.  Any buying decision is highly influenced by intangible factors as calibrated by the degree of trust between buyer and seller, hence attention to these underpinning factors is essential.

When Systemix works with project teams, they focus on maintaining an undercurrent of conversations and interventions which enables effective functioning of the team – both during the bid phase and during delivery – always with one eye on the leadership dimension to ensure that the management, leadership, and governance is enabling the team to be the best that it can be.