THE PUBLIC SECTOR PROCUREMENT NIGHTMARE – OR HOW TO WIN TENDERS! Austerity. Cuts. We’re all in it together. Savings. Job losses. Front line services. More for less. Outsourcing. Aahh? Outsourcing? Isn’t that another word for opportunity? The private sector can deliver the same outcomes as the public sector, but for less! Not true in all cases, but for transactional work, for blue collar tasks, and a wide range of non-‐core office based functions, the answer is yes! History has demonstrated this time and again. So as an entrepreneurial business person, perhaps the public sector is the place to be? You have a great product or service that your customers think is fantastic and you think, “I know, the public sector will buy this, too”. And away you go and begin your marketing and business development/sales campaign and before long your turnover is up, profits are up, the customer pays on time and holidays in the Caribbean are being booked left and right! It’s really simple, isn’t it? Or do you respond to a tender opportunity only to find that you need to “Express Interest”, then “Pre-‐Qualify” and this is before you even see the true scope of what the buyer actually wants? So you express interest, complete a Pre-‐Qualification Questionnaire (PQQ), submit it on time and then sit back and wait to be Invited to Tender (ITT). But you’re not invited…. Or maybe you get through the PQQ stage and submit a priced tender but don’t win. The most expensive and wasteful bid is the one that comes second! So what are the mistakes that organisations make over and over again? And how do you correct those mistakes? Anecdotally, the most common mistakes are: • Confusing the buyer with tech-‐speak and jargon • Cut and paste from a previous bid to another customer, and leaving their name in! • Focusing on your company and not the buyer’s needs • Using 1000 words when 150 will do • Having poor or inadequate policies and procedures • Missing the deadline • Poor writing style with many typos • Concentrating on the wrong questions • Sending confused messages • No distinguishing themes • And so on……… When you consider some of these mistakes it’s no wonder that the public sector has what appears to be a long-‐winded process. After all, if you can’t be bothered to check a sales document for basic errors, why would the buyer be confident that you would deliver a quality service? Would you be upset if your bank didn’t know your name? I know I would! © Voomeroon Limited 2011 And don’t think that it’s just small companies that get these things wrong. Multi-‐national companies with annual sales in the hundreds of millions do, too! The public sector has to demonstrate that it’s spending our money wisely and also that it’s being fair to all potential suppliers – hence the long process. Think about it from the customer point of view. If they buy without a process they risk wasting public money and being criticized, and if they have a process they’ll be criticized for being overly bureaucratic! Damned if they do, damned if they don’t! And until the process is changed, you have to follow it or you don’t get to supply the public sector. So, what is the process? There are four types of public procurement: • Open – tenders are invited to be returned by a given deadline. Usually used where values are low, the product is a commodity with many suppliers (e.g. stationery) or where the goods/services are not “complicated” • Restricted – used for higher value contracts where the requirement can be closely specified. Suppliers are asked to pre-‐qualify, which means they have to prove they have done similar work before (not necessarily for a public body) and are financially sound. After the PQQ the highest scoring suppliers are invited to submit a tender • Competitive Dialogue – only used where the requirement is broadly defined but the delivery method is unknown. These contracts are usually expensive and complex. A good example might be the construction of a new hospital; the different bidders will all have greatly varying solutions and ideas that all meet the requirement • Negotiated -‐ only used in limited circumstances, for example, there is only one supplier that, say, owns the patent for a new drug or is working to design a new weapons system. Whatever process is used and unless it’s for very small purchases, you will have to submit a proposal of some sort to the buyer. The proposal must set out clearly what you are selling and how it meets the buyer’s need. Or for opportunities where you have to pre-‐qualify, you must first demonstrate capability, financial standing and that you run the “right” sort of company. What does this mean? Well, you have to behave ethically, manage health and safety properly, mustn’t discriminate, and so on. And you demonstrate these things by having the right policies in place and in some cases you also need evidence to show you follow the policies as well. Let’s assume your policies are right; they’re in place, they work, your employees follow them, and so on. And let’s also assume you are solvent, and unlikely to go out of business and are a safe bet. Then, I’m afraid it’s back to school for the advice. Can you remember being told to read the question and then answer it? Many tenders simply do not answer the question! And if they do provide an answer it’s to the wrong question! They try to shoe-‐horn in something that has been written before for another purpose that “isn’t quite right, but it’ll do”. Well, it won’t. Answers must be written for the specific question; by all means copy something else as a start point, but don’t use it without further editing. © Voomeroon Limited 2011 Don’t try to be clever, using flowery, overly eloquent language. You probably don’t talk like that and neither do buyers, so why write like it? Put yourself behind the buyer’s desk – twenty documents to read and score, each the same as the last. Make it easy to read, not difficult. Make it easy to understand. Make his/her job easier so you get in the “yes” pile and not the “no” pile. The same goes for industry specific jargon. Remember, the person reviewing a PQQ may not be an expert in that field, so plain English is best. You’ll often find the same information is requested several times under different questions. Don’t simply say, “refer to previous answer” as you’ll fail. The question has been asked twice because the submission will be split up and sent to different reviewers for different sections. So the technical reviewer will want to know operationally how you deal with returned goods for example, but so will the commercial manager who is more concerned with refunds for these. Treat the PPQ or ITT/bid preparation as a project because that’s what it is. It has a defined start, a clear objective and a defined end point. Apply the project management principles you use elsewhere in your business and you won’t go far wrong. Approach the task as just another job and you court disaster. Make sure you know what has to be completed and by when. Put a programme in place so you can meet the customer deadlines but also meet your own internal approvals deadlines as well. And include time for at least one review. And finally, who is going to review your submission well before the due date? I recommend using someone who knows your product or service, and also the market sector. The reviewer mustn’t be afraid of criticizing your documents; they should ask “what does this mean” or “this doesn’t answer the question” or perhaps “ why have you said this, it isn’t true”; you get the picture. But why get an external review anyway? Simply, because someone else will spot the glaring mistakes that you can’t see because you’re too close, they’ll see you have a good offer or they won’t, but most of all you don’t want the first review to be done by the buyer! Tendering for public sector work is not a black art. It is a fair process giving everyone equal chance to get it right and win, but also the same chance to get it wrong and lose! Yes, there can only be one winner and there is some luck needed on the way. But the more you prepare, the luckier you get! Richard Greaves is an independent consultant with over 20 years experience of working with, and selling to, the public sector. You can contact him at richardgreaves@voomeroon.co.uk or on 07894216188. Visit him at www.voomeroon.co.uk © Voomeroon Limited 2011