Tips for analysing a tender

The first step in developing a tender response is to examine the tender request. You need to decide whether the opportunity is a good fit for your business, and whether or not to invest further time, money and resources into developing a tender competitive response.

Things to think about:

  • If you can’t deliver, don’t bid.
  • Don’t assume that existing suppliers will automatically win the tender when a contract comes up for renewal.
  • Make sure a contract notice really is a tendering opportunity, and not a request for quotation.
  • Don’t take on too many tender opportunities at once. It’s best to concentrate on tenders that are most likely to yield results.
  • Check the size of the contract (if available) against your turnover. Sometimes if the contract value is more than 20% of business turnover, that could count against you in the assessment of your tender response.
  • If you can, consider nominating a staff member to look for tender opportunities. Be sure to give them enough time for this important activity.

You may find that you can submit a strong tender response, but that actually delivering the tender will only make a small profit or no profit at all. Normally you would discount these types of opportunity. However, if the opportunity fits with your business’s long-term strategy and delivering the tender would not cause financial issues for the business, then you should consider submitting a tender response. Known as ‘loss leader tendering’, this strategy gives you access into a new market (or the chance of building a new business relationship with a new customer).

Be aware that taking on the process of a new tender may put a strain on your existing business resources. It is important to ensure that winning new tenders does not affect delivery of your existing contracts.

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