Competitive tendering is an expensive process – one of the golden rules is only to invite companies you would be entirely happy having as a contractor. Doing otherwise is a serious waste of time and money both for yourself and the other companies concerned. It is essential to use a pre-qualification process that will ensure those invited to tender are capable of providing the service required at a competitive rate, and can form a relationship for the life of the contract.
The first task is to research the market and identify the suppliers who can do the job. Those who must comply with European Union directives will find some of this work done for them through the advertising process demanded, but that does not preclude additional research. There is a wealth of information available from trade and professional journals, industry associations and registers, and professional bodies. You can also advertise your requirements.
It is easy to arrive at a list of potential tenderers – the difficulty is in reducing them to a sensible level. Selective competitive tendering (choosing a limited list of firms to be invited to tender) is far more cost effective than open competitive tendering (issuing invitations to tender to everyone who expresses interest).
Selection criteria
Buyers will be clear about the need to determine the selection criteria they will use to evaluate tenders. But too few adopt the same approach to the more critical stage of selecting the companies to invite in the first place. How will you know if a firm is one you would be happy to have as a contractor if you have no criteria against which to measure it? For example, what minimum standards will you set for a company to be considered as a supplier to your organisation:
- membership of a trade association?
- a track record in providing similar services for a similar organisation?
- geographical presence (ie, local or national supplier)
- minimum period of trading?
- minimum level of turnover?
- own directly employed operatives?
- quality accreditation?
- demonstrable financial stability?
Whatever you decide on, use an evaluation process as seriously as you would for received tenders. Do not invite to tender any company you have not interviewed. Demand that such an interview is attended by operational managers, not just sales and marketing people. You have to be able to form judgements about the prospects of them working in, and being treated as a part or an extension of, your organisation.
Above all, be sure to have sound reasons for not inviting a company to tender, as you might have to justify your decision if someone feels their company has been excluded unfairly.
Selection process
Ask tenderers for sites you can visit to examine their work, rather than relying on letters of enquiry or standard forms sent to the referees. Visit the sites; talk to the managers and the users of the service; talk to the applicants’ managers on the sites; look at the site organisation; ask about site/head office liaison; look at the staffing levels and the movement of staff; look for the qualifications of staff where appropriate.
Such visits should be conducted by whoever controls the tender exercise, supported by the managers who can appraise the potential tenderer’s performance. Personnel from outside the team should be used where appropriate.
Use a standard form of supplier appraisal so that fair comparisons can be made.
This is not a simple exercise; it requires time and resources. Purchasers should always ensure enough time is allowed in the planning stages of a competitive tender to allow this process.
Confidentiality
In arriving at the final list, you will give out information about your organisation, which you should protect with confidentiality agreements. Be prepared for companies to want reciprocal agreements concerning their data.
Source
The Facilities Business
