Chapter 1
Finding opportunities to bid for work
Not so daunting
For a small consultancy it might seem quite daunting to start bidding for work. There are so many opportunities available that it is often difficult to know where to start and how to deal with new opportunities as they arise.
This guide takes you through the many types of opportunities that exist and sets out how to quickly evaluate those that are most likely to be successful for you. Once you have decided which bid to pursue, the first step is to identify the key points that the potential client is looking for, then consider how best to address these points to improve your chances of securing the project. The guide details how to plan the process of bid preparation, how to create the document, how to incorporate your experience and additional information within the main body of the submission and how to use appendices creatively and effectively.
First, we will consider what is required to successfully bid for work, scrutinising the process and explaining some of the jargon that is used in the bidding process. Then we will detail the types of bid and the various ways in which a bid can be made.
One word of caution is needed here: this guide provides an approach to creating compelling winning bids but does not deal with the contractual aspects. You may need to take advice from lawyers, advisers and professional indemnity (PI) insurance providers when entering into a contractual relationship with clients.
Bidding to win work
When starting up a consultancy, the opportunities for new commissions will probably come through existing relationships, recommendations and perhaps as a result of some form of marketing. As the firm grows and the portfolio of completed projects increases, the consultancy’s credibility will be enhanced and the opportunities to successfully bid for more work will increase. The ability to use your past experience and current resources to increase your workload makes bidding for work both exciting and rewarding.
In the past, work was awarded on the basis of existing relationships, especially in the private sector; however, there is now a trend towards clients becoming more selective. As a result, most clients will use some form of bidding process to:
- reduce the risk of making the wrong choice
- satisfy shareholders (or the public if the work is in the public sector) that the selection process was fair
- achieve value for money
- select a consultant whose ethos matches their culture
- ensure that the consultants are financially stable, have sufficient resources, appropriate experience and the necessary systems and technology in place to suit the demands of the project
- obtain input from the consultants at an early stage.
Given this trend, more and more opportunities are available through some form of bidding process. To improve the chances of success, some investment of time must be made to gather information that will be required in the bidding process. However, once this initial effort has been made and sufficient information gathered in presentable formats, it becomes a matter of simply reworking the data for subsequent bids.
Many small consultancies believe that bidding for work in a competitive environment is only for the bigger consultancies. This is not true. Some major private sector clients have smaller projects available where a smaller consultancy, with fewer overheads, could have a better chance of winning the work. Also, virtually all work placed by the public sector, regardless of value, has to go through some form of bidding process. The smaller, lower value projects may be particularly attractive to smaller firms.
Most consultancies will be experienced in submitting proposals. Proposals tend to be a response to a discussion with a potential client, where the client asks for some information to assist them in the decision-making process. The temptation in this situation is to send the client a brochure or other general information. However, this may not prove sufficient to secure the work, especially if competitors are able to produce more bespoke and compelling proposals. Therefore, knowing how to produce a compelling bid will also dramatically increase your success rate when submitting a proposal in a situation where there is no bidding process.
So, what does it take to successfully bid for work? Listed below are a few attributes that would certainly help:
Understanding the bidding process
Many consultancies, especially smaller firms, are deterred from bidding for work because they do not fully understand the process involved. This is understandable as there is no standard bid process. Large, complex projects, by their very nature, may have a long process with many stages. Smaller projects, however, might involve a simple exchange of letters.
Where public money is involved, UK projects must adhere to European Union (EU) procurement laws and there are set procedures that must be followed. These procedures vary depending on the value of the contract.
It is worthwhile taking some time to understand the bidding process and considering whether it is worth expressing an interest. In simple terms, the bidding process could follow the following sequence:
Types of bid
Negotiated contract
If you have a good existing relationship with the client, you might not be involved in a competitive bid process but would instead negotiate the contract. This may still require some form of bid documentation. In these situations you should consider the following points:
- Take the time and effort to submit a good proposal, ensuring that your suitability for the project is beyond question – don’t give the client a reason to seek an alternative proposal.
- Refresh your existing relationship – don’t let the client think that you are taking the relationship for granted. Deal with your existing client as if they were a new client that you are trying to convince to appoint you.
- Enhance your service offering – your client might have been approached by your competitors and they may be offering better value for money.
- Obtain feedback whenever you can – emphasise the good points in your proposals or bid and demonstrate how you have addressed any shortcomings.
Bidding direct to the client
Single project
A private sector client has a degree of flexibility in terms of the format and procedure of the bidding process. Public sector projects within the EU, however, have to comply with set procedures.
The procedure for public sector projects is primarily determined by the project value. If the value of a project is below a certain threshold, then the procedure is more relaxed. Smaller consultancies may wish to target these lower value projects and there are a number of websites that list these opportunities. The website www.supply2.gov.uk is a good starting point to find low-value public sector opportunities. It is free for local searches but a fee applies to regional or national searches. The Tenders Electronic Daily (TED) website lists all the public sector projects above the value threshold.
Where a project is above the value threshold, then the public sector client may opt for one of the following:
| Restricted tender process | The consultant (service provider) will have to respond to an advertisement expressing an interest in tendering. They will then have to complete a PQQ to demonstrate that they have sufficient experience and resources to meet the client’s needs. Only those who are subsequently shortlisted and invited may submit a tender. |
| Open tender process | This differs from the restricted tender process in that all those who request the tender documentation will be invited to submit a tender. There is no shortlisting with a PQQ stage. Instead, the information that is normally requested in the PQQ is requested as part of the tender. This procedure is often used if the timetable does not permit the separate PQQ stage or the marketplace is limited and the client wishes to stimulate extra interest. |
| Negotiated tender process | This uses a PQQ stage but allows the client to negotiate the contract terms within strict guidelines. This process is rarely used and is usually confined to exceptional circumstances, such as when a rapid response is required in emergencies or where a particular company is the sole provider of supply, or relevant experience or capability. |
Therefore, when bidding for a single project direct to the client, consider:
- targeting the private sector where the process may be simpler and involve less red tape
- that there may be an opportunity to negotiate without the need for competitive bids in the private sector, which is rarely the case in the public sector
- targeting the low-value projects within the public sector where there may be limited competition from larger competitors. Equally, if you are a larger consultancy then perhaps you would not be able to compete on price against the smaller competitors who may be targeting the lower value work.
Framework contracts
In a framework contract or framework agreement, the client has a programme of work over a period of time and agrees in advance the price, terms and conditions and quality standards with those interested in bidding. To maximise the efficiency of the marketplace, the work might be divided into value ranges, thus allowing each bidder to pitch for one or more of the value bands. This allows the smaller service provider to compete with the larger consultancies on lower value projects without the need to pitch for the bigger projects, where the likelihood of success (based on experience) would be limited. Typical question formats are shown in Figure 1.1.
A framework contract will not necessarily guarantee you the work, it simply means that you have been put on a shortlist and may still have to bid for each project as it comes up. Some frameworks are structured in such a way that the projects are given out in rotation to those on the list, so as not to commit too much work to one supplier and risk overloading them. This method rewards all those who made it through to the shortlist.
Figure 1.1: Typical questions within a framework bid document
The benefits of a framework agreement are that it:
- offers the client reduced fee values due to the promise of a given volume of work
- gives the consultants the opportunity of regular work
- allows the consultants to maintain a dedicated team that will get to know how the client operates and their required procedures. This also benefits the client in that there is experience and knowledge transfer from one project to the next, so projects should run more smoothly and efficiently.
Therefore, when bidding for a framework contract, you should bear in mind:
- not to overcommit by bidding for too many categories if your resources are stretched
- only to target those value bands where you have a good chance of winning, as a weak submission in one area may reduce the potential client’s overall perception of your abilities
- if possible, being more competitive on fees, given the fact there may be regular work on several projects over a number of years.
Ways to make a bid
Bidding as part of a team (collaborative working)
Clients increasingly want a single point of contact when dealing with their consultant’s team. Some bidding opportunities will stipulate that the client is looking for a full team with one member acting as a key contact to coordinate or manage the other team members.
When forming a team to bid for a project, consider what the client may be looking for. The client, or their advisers, may be evaluating your past experience of working together on similar projects, as well as the adequacy of your current resources to undertake the proposed project. Therefore, if you find yourself in this situation, make sure you are joining a team which has winning potential. There is no point in including another consultancy in your team which does not meet the client’s selection criteria. Equally, if you are invited to join a team and you believe that your firm does not meet the criteria, then it is best to decline and wait for a more appropriate opportunity.
On some very small projects, the client may not be particularly concerned about the other professionals that you involve, in which case there may be other commercial factors that determine your selection. If you are introducing new firms to your client, see if they will reciprocate and introduce you to their clients.
One word of caution here (and you may need to speak to your insurers): make sure that you don’t take on responsibility for other consultants’ design or technical input. If possible, each firm should have a separate contract with the client, even though one firm becomes the key interface with the client.
Bidding as a subcontractor (design and build)
Many of the larger contractors offer a design and build service. This involves undertaking to design the building using either their own in-house designers or a team they have selected specifically for the project. Once the design is finalised, they proceed to build the project. This service has many advantages for the client, offering:
- an all-inclusive price, which is often fixed at the outset of the project
- a single point of contact and one line of responsibility for the design and construction
- reduced risk for the client.
The main disadvantages for the client tend to be the lack of influence over the choice of consultant and insufficient time to develop the designs. However, these drawbacks can be overcome by using novation. Novation involves the client picking a design team to take the brief and develop the designs up to a certain stage – either to an outline stage (RIBA Stage C) with outline planning consent, or to a more detailed stage (RIBA Stage D) with, perhaps, full planning approval.
At this stage, the scheme forms part of the tender process and the design team is novated to the successful contractor, becoming part of the contractor’s team. Sometimes a quantity surveyor may be retained by the client to advise on costs and contract administration. Alternatively, the design team may stay with the client and monitor the contractor’s design team’s design development. The benefit of not having the design team novated is that the contractor’s team may come up with innovative solutions that may reduce costs, save time and increase buildability.
Therefore, in a design and build situation there is scope to bid to the client or, if there is no novation, to bid to the contractor as a subcontractor. When considering bidding for work to a contractor on a subcontractor basis, take into account the following questions:
- Does the contractor have a good success rate?
- How many are being asked to tender? (That is, how many consultants are bidding to the contractor and, in turn, how many contractors are bidding to the client?)
- Who are the competitors and are they more likely to win?
- Does the contractor have a good relationship with the client?
- What input would be required at the tender stage?
Bearing in mind the above, you should take a commercial view on the likely success of the tender. Unfortunately, in this situation you probably do not have direct contact with the contractor’s client and it may be difficult to obtain all the information you need to make a well-informed decision.
Some consultants will feel that they are better suited to work for, and remain with, the client in a design and build project. Alternatively, some consultants have the skill sets to help contractors tender for these design and build opportunities. Your choice of which of these two roles to bid for will determine which of your skills you emphasise in the bid document.
| When bidding to the client | Emphasise your strengths in the following areas:
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| When bidding to the contractor | Emphasise the following strengths:
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In a high proportion of design and build projects, the design team is novated to the successful contractor. In these situations, the consultants may have to adapt to the needs of their new client. A successful project may lead to repeat work, either from the original client or from the contractor, on future design and build opportunities.
E-procurement and e-auctions
E-procurement
Electronic purchasing techniques are becoming more prevalent, especially where there are strict rules governing word or character limits for answers to questions. In such cases, access to an e-procurement website is provided using secure, password-protected registration procedures.
Those bidding will then either type in their response to specific questions or upload specific documents, such as company accounts and certificates. Questions which have a word or character limit may prevent the inclusion of extra text. After the deadline has passed, further access to the site may be denied.
Be aware that if you wait until the last moment to send your electronic bid there is a risk that:
- your internet connection may go down
- with everybody submitting at the last minute, the client’s server may be slow
- a problem may arise in sending one of the files or electronic attachments
- some files may prove to be too big to send and you may need to consider changing the electronic format.
More frequently, clients may ask for both a hard copy and an electronic version to allow them to print further copies if they need to. When submitting an electronic copy, consider how your submission will appear if printed in black and white rather than in colour.
E-auctions
E-auctions are now being used for service contracts where previously they were only used for purchasing goods. Leading up to the e-auction, the consultant will prepare and submit the tender documents in the usual way. The price submitted will, however, be seen purely as an opening indicative offer. After the client has evaluated the submissions, those shortlisted will be invited to the e-auction.
Bidders will be asked to log onto the web-based auction and will be required to make their first anonymous bid. As the e-auction proceeds, the bidders can make further bids, reducing the price with each subsequent bid. The bidders will see their competitors’ anonymous bids. The auction ends when the lowest bid is made.
In some e-auctions, the lowest price may not necessarily win. Knowing what your lowest bid was, the client can consider that alongside your technical submission and may apply a weighting to arrive at the overall winner.
Bidding through procurement agencies
The whole bid process can be time consuming for the client, especially if they have a large portfolio of work to place. Many public sector clients now tend to use third party organisations to deal with the pre-qualification stage. The client will agree the selection criteria and the third party procurement agency will handle the shortlisting stage. Once shortlisted in this accreditation stage, the consultant can pre-qualify for many more projects without the need to complete a fresh pre-qualification for each one.
Sometimes, one public sector client will create their own accreditation stage and give other public sector clients access to the consultants who have pre-qualified against pre-agreed criteria. This can reduce the costs for those bidding, as well as the client’s procurement costs.
▸ Summary Checklist
- Do you have all, or most, of the attributes to successfully create winning bids?
- Even in negotiated opportunities, submit good proposal documentation so as not to give the client a reason to seek alternative proposals
- Public sector projects follow set procedures, but these should not deter the smaller firms
- Smaller firms may wish to target low-value projects within the public sector, as these have simpler procedures
- Framework contracts can offer potential workload over a longer period on several projects. To increase chances of success, only pursue the project value bands that match your experience and capability
- If you are considering joining other consultants to form a team to pitch to a client, be very selective. Don’t include weak team members that may not have the relevant experience or resources and may jeopardise your chances of winning the project
- Be equally selective in your choice of contractor when considering design and build opportunities. Consider their success rates and the relationship they have with the potential client
- If submitting bids electronically, leave yourself sufficient time to send the files, especially if they are large. Consider also how your submission will look if printed out by the client in black and white rather than in colour
- Consider the benefits of pre-qualification through a procurement agency, which could give you access to many clients