Tendering for electrical projects, both in the public and private sectors, can absorb a large part of your time and energy when in the electrical business. Meanwhile, the commitment to analyse and hone your tender process is likely something that gets put to the side while busy, but can improve your chance of success in the long run and reduce the amount of times you need to tender in order to fill your books. Below is advice from the Countfire team to help you successfully navigate the electric tender process and evaluation criteria.
What is a tender in electrical estimating?
A tender is the proposal and document an electrical estimating company will submit in response to a “Request for Information” regarding an upcoming electrical project. The tender usually contains a brief overview of the company, including its history and size, as well as a detailed electrical estimate that matches the project specifications. While tendering for projects, electrical estimators will usually be up against multiple competitors and potentially an incumbent supplier. The proposing body will use the tenders to analyse what each electrical company can offer and how they will manage the work, eventually choosing a winning company who will be awarded the contract.
Your guide to tendering for electrical projects
Below are the steps needed to begin tendering as an electrical estimator.
1. Assess the suitability of the opportunity
We wrote here on how to find electrical tenders in both private and public sector opportunities. However as you’ll soon discover, out of the many options out there it’s important to only bid on the correct tenders where they meet your own internal requirements so that you don’t waste time and energy that could be spent elsewhere.
2. Register your interest
If the opportunity seems like a good fit for your company the next step is to register your interest, letting the buyer know that you’d like to submit a bid. The buyer will then issue you with further documentation, usually in the form of a pre-qualification questionnaire (PQQ). Sometimes, no PQQ is issued and you will skip straight to an invitation to tender (ITT) instead.
3. Complete the pre-qualification questionnaire (PQQ)
The purpose of the PQQ is to narrow the field of applicants for the tender. Someone in the hiring team will need to read through all submissions, so it makes absolute sense that they don’t want to waste time reading through submissions from companies that don’t meet their minimum criteria. Your job at this stage is to focus on completing the questionnaire and providing evidence to show that your company has the ability to take on the project. One thing to remember is that this is one of the first impressions the buyer has of your company. While this is separate from the stage where the buyer reviews bids, their impression of you at the PQQ stage poses your first impression so it’s worth taking the time to get this right. Note: If you receive the PQQ or ITT and decide that the project really isn’t right for your company, you’re under no obligation to proceed. In this case, let the organisation know in plenty of time to maintain a good future relationship.
4. Receive an invitation to tender (ITT)
Assuming you met the conditions set out in the PQQ, you’ll then receive an invitation to tender (ITT), sometimes also known as a request for proposal (RFP) or request for tender (RFT). While the PQQ focused on why you are qualified and what you have done, the ITT is your proposal covering:
- How you will approach the project
- The electrical estimate and breakdown of costs
- Some information about your company
- Your project management process
5. Seek clarification of tender requirements
As you begin to put your tender together you may need further clarification on certain elements. Assumptions may lead to costly bidding errors and it’s always important to understand the overall context and preferences of the organisation awarding the tender. Always read over the specification for the tender and understand what the organisation is asking you to put together. Guidelines are often very specific, detailing font type, size, word count and other formatting requests. Naturally, you’ll also want to plan ahead to ensure you meet the tender deadline.
6. Create your electrical tender
As well as compiling your company information you’ll also need to create a concise electrical estimate for the tender. This will include reviewing the drawings and counting symbols, estimating labour costs and ensuring any other overheads, such as equipment hire, are covered. Here are some additional clever shortcuts you can take to speed up the tender creation process: Use automated takeoff and estimating software Rather than spending the first few hours of your tender time doing manual counts to discover how many electrical elements there are in a drawing or project, you can work up to 10x faster by adopting cloud-based takeoff software to automatically complete symbol counts for you.Pro-rata your cable measurements There’s no need to painstakingly measure every length of cable for a project. A simple shortcut is to measure what is required for a typical floor, then pro-rata that quantity up to cover remaining, identical floors. (Just make sure floors are substantially the same).
Harness work you’ve already done If you’ve been tendering a while, it can be useful to revisit old tenders and see whether you can transfer costs or parts of the tender to save you having to start from scratch. There’s also no need to reinvent the wheel every time you put together a tender letter to accompany your estimate. A great, time-saving shortcut is to put together a library of typical clarifications, exclusions or words you normally use and have these at the ready when you’re writing up your tender response. The other positive about this is that it helps to ensure you word your tenders consistently and develop a good standard.
7. Ensure you’ve included everything they ask for
Tender submissions are often quickly ruled out when they’ve been submitted without key information included. Compliance tends to be a very important requirement for both public and private sector organisations. Being compliant includes:
- Meeting all the points listed in the specification
- Possessing and including all necessary accreditations, licenses or qualifications
- Having necessary policies and procedures in place. For example, meeting duties under health and safety laws
- Meeting all turnover requirements
- Having and demonstrating relevant prior experience
It’s best practice to ensure you’ve included relevant evidence with your submission, such as copies of accreditations or verifiable examples of past projects. Another best practice is to have someone check over or quality control your bid before it is submitted to proofread and sense check what you have written.
8. Tips to sell yourself within the tender
Don’t underestimate the first impression within your tender. On the tender documentation itself, you may need to provide details such as your licensing and any insurances that you hold. It’s also a good idea to display those things on your website – sometimes companies will contact you asking you to put in a bid, and they may do so based on information they’ve found about you online. Find your unique selling point Try to explore any USPs that make your company stand out. For example, can you offer electrical prefabrication services that will speed the project up and reduce costs? Perhaps you might be planning on hiring local subcontractors or electricians for your team which contributes to a societal benefit, or you might have a sustainability accreditation that will enable you to work more efficiently on the project.Provide clear breakdowns of cost
Building trust with a potential client means taking the time to spell out how you came to your estimated breakdowns, and defining what any service charges actually mean. People like to know exactly what they’re paying for, and can feel like they’re being ripped off if charges are unclear. In addition to this, use your clarifications and exclusions to give your terms extra clarity. For example, were there any unknown quantities which you couldn’t account for? Are there certain items that are dependent on the client making a choice so that you can clarify price? Show testimonials Testimonials are effective because they deliver “social proof”, something that everyone looks for, no matter what it is they’re buying. People want to know that someone else has used the service or bought the product and had success with it. To speak more to the power of testimonials, consider these statistics compiled by Boast:
- 90% of respondents who recalled reading online reviews claimed that positive online reviews influenced buying decisions
- Customer testimonials and case studies are considered the most effective content marketing tactics, as identified by 89% and 88%, respectively, of B2B (business to business) marketers
- 85% of consumers said they read up to 10 reviews before feeling they can trust a business
Play to your strengths Have you handled projects of this size, scope and type previously? Does your team possess the requisite skills to manage this project effectively? Highlight your strengths with examples to back up your assertions. In the same vein as testimonials, clients are looking for proof that you’ve done this type of work successfully before.
What happens after your electrical tender is submitted
If you’ve done your best to follow the specifications of the client, you then submit your documents and await word on whether you’ve won the tender. It helps to have some understanding of what’s going on once those documents are submitted. Not only will you know what to expect, but you can structure your documents to accommodate the preferences of the vendor. Here’s what’s happening behind the scenes:
Tender evaluation process
Once bids are submitted, the buyer will use their internal system to evaluate and shortlist bids. They may select a company right away, but more commonly they will go back to those they’ve shortlisted and invite them to present their bid in person or over a video call (especially on high value contracts). Some organisations, especially those in the public sector, have information documented about how they evaluate and select tenders, so it’s worth checking if this applies in your case. In most cases, price is a consideration, but it’s often not the most important factor. Tenders tend to be evaluated over a few different areas, including things like quality, social issues, relevant experience, service or even environmental factors. Many organisations use a scorecard system to weigh their different criteria. In some cases, you will get to see this once the tender has been awarded so that you know how you stacked up against the competition.
Typical criteria and steps for electrical tender evaluation
It’s important to understand that the first step is always disqualification. Vendors typically follow this standard process in order to reduce the volume of tenders that they need to assess. This may be due to missing or incomplete documentation or a tender that doesn’t comply with mandatory tender and contract conditions for participation. Once the review panel (or whoever is reviewing the tender) have disqualified any bids, they will usually then assess the rest against “non-cost” evaluation criteria.
Non-cost tender criteria
Non-cost evaluation criteria are the factors that go into your bid that don’t include pricing. Sometimes these are referred to as “uncompetitive issues” or “quality requirements.” Typical criteria that might be assessed here include:
- The technical merit of your tender. This includes your functional ability to fulfill the requirements. Factors such as your management competence, previous experience, and financial viability will come into the equation, as well as compliance with statutory requirements
- The relevant skills, experience and availability of the team doing the job. Will you have enough skilled labour available to start when required?
- Where your labour pool comes from. Some contracts may prefer that at least a certain percentage of local labour is used
- Your quality assurance process
- Any sustainability programs and measures to meet “green” goals
- Any risks, constraints or exclusions with your offer
- Your process for training and onsite installation
- The tender is complete and signed by an authorised person (although failure to do this may have had you disqualified already)
Cost vs. value tender criteria
Some companies are very price-driven, but increasingly, astute vendors want to make an assessment on value-for-money. This means that the cheapest doesn’t always win – vendors weigh up whether the benefits you provide in your tender provide more value for them. This might include an assessment of risk on their part. For example, perhaps the company that puts in the cheapest bid doesn’t have significant experience with projects of a similar type. Another company might cost more but have a portfolio full of similar projects.
Revising tenders for queries or RFI responses
Occasionally you may find yourself revising your tender in response to an RFI change or query. This may be due to:
- A new or revised pricing schedule sent late in the process. Sometimes this is because the client didn’t send you one to begin with
- A set of revised drawings, or a revised specification detailing a change in the scope of works for the project
- A response to a query or Request for Information (RFI) that either you or another contractor have sent upstream to the client
- A change to the tender period
This is where using cloud-based software such as Countfire for your takeoff comes in really handy. Rather than having to go back to the drawing board to manually count each symbol again in the revised drawings you can simply recount them with Countfire, or even split quantities after you’ve counted them.
Adapting to changes in tender requirements
Again, it can be useful to have automated takeoff and estimating software on hand to respond to changes in tender requirements. For example, when a new pricing schedule arrives requesting that the landlord’s and tenant’s areas be broken out separately, you can easily split these as quantities, even after you’ve counted them. Dealing with a revised pricing schedule just requires telling Countfire which areas you want to separate out and the software handles the rest. You’ll even get an automatically created Excel spreadsheet with new columns for each area you asked Countfire to separate out. You can check out an example below, using the idea of a request for landlord’s and tenant’s areas to be separated:
Of course, just like with any changes, remember to send the revised information out to your sub-contractors, like fire alarm and data and cabling suppliers, as soon as possible.
Query or RFI responses
Queries or RFIs (requests for information) are common, especially for bigger electrical projects. The estimator and electrical contractors will often find that designs aren’t complete at the tender stage, therefore they need to send a lot of RFIs upstream to the client in order to clarify details. This information is needed so that contractors can; A) price for it properly and ensure their tender is as accurate as possible and B) help develop the design of the project as it progresses through the pre-construction period. With query or RFI responses, it all depends on what the response is and how that relates to the specific part of the tender. For example, there may have been a bunch of light fittings shown without any reference (such as Type A or Type B), so you had no idea what that light fitting was. If the response comes back and tells you what the reference for that fitting is, you can then look it up in the luminaire schedule (assuming the client sent you one), see what manufacturer makes the light fitting, and then swiftly contact that manufacturer for a price for their fitting. In another example, perhaps there was some containment running around the building to hold cabling, but the size or type of that containment wasn’t shown on the drawings. If the query response tells you what size and / or type it is, then you’ll be able to price that properly and include it in your tender.
Extension to the tender period
Sometimes you get a more pleasant last minute change – the client may grant a few extra days, or even a couple of weeks extension to the tender deadline. Bonus! Sit back, relax, go to the pub… Perhaps not, but you will want to use that extra time wisely. If you’ve been fairly organised you might be able to use the additional time to move to a totally different tender you have sitting on your desk waiting to be started. If however you’re running behind for any reason, be thankful for the reprieve and use the additional time to your advantage.
Reasons you may not succeed with winning an electrical tender
Hopefully you will either have been successful at winning the tender and if not, have received detailed feedback from the tendering company on why your proposal didn’t make the cut. However, sometimes feedback can be lacking. In this scenario you can use the criteria below to try and work out why you may not have succeeded in winning the tender:
You didn’t follow the tender instructions
Picture a busy procurement manager who has a pile of tenders to work their way through. What are they going to do to narrow the field down? One of the very first things is to throw out all tenders that didn’t follow instructions. For example a tender that missed the formatting, questions or because you didn’t meet an electronic requirement, or conversely, that you submit a specific number of hard copies.
Your estimate seemed too cheap or too expensive
Every organisation that puts out an electrical tender is looking for competitive bids, however they’re also looking for high-quality work. If your bid seems too low, they might suspect that you’re not experienced enough to do the job well. On the other hand, if your estimate seems much higher than others, the client might suspect that you’ve inflated your pricing. The tricky part with pricing is being able to fall within a range that seems reasonable to the client. Accuracy is your friend here. You should be able to show precise breakdowns for how you came to your final estimate. Using reliable automated takeoff software can help, but you also need to be clear with what you are charging for. Itemise things like labour costs and avoid using vague terms such as “service fee” (a client looks at that and thinks “for what?”).
You didn’t meet the minimum requirements
Did you carefully read the specification and note the minimum requirements the procurer has for awarding the tender? Perhaps either you didn’t meet them, or you failed to demonstrate on your application that you do. Sometimes it can help to physically go through the specifications and check them off against your own documentation. It’s important to make sure you have answered every requirement.
Your presentation was poor
This point follows on from failing to sell your business well – poor overall presentation definitely won’t sell! This includes things such as spelling and grammar, particularly those very glaring errors. Besides following requested formats, you should also ensure that you have stayed within any requested word limits. Look at how your documentation is presented – is it easy to read through, or do you have awkward walls of text? Sometimes some simple formatting such as paragraphs or bullet points can make a big difference.
The client went with someone they know
If the client ended up selecting an electrical business that they already know, there may not have been a lot you could have done differently. Here’s what you can take from it though – relationships matter in business. While tenders are partly a numbers game, they’re also about people and how you appeal to them. Companies offering private tendering can award as they see fit. Those organisations in the public sector will have a very set procedure to follow when awarding tenders, but what do they do if two or three applications line up equally? This is where they might go with someone who the procuring manager happens to know or with whom they have worked before. One thing you can do is work to build up your own network of contacts. Get into the habit of making yourself known in work and social settings, perhaps even joining local networking groups or community organisations. When you’re on job sites, make the effort to meet facilities managers, engineers, corporate liaisons and procurement managers. Introduce yourself, get to know them and leave them with your business card.
What happens when you win an electrical tender
Typically, the first communication you’ll get from the vendor is either an award letter if you were successful or an unsuccessful bidder letter if you weren’t. If you were awarded the tender, congratulations! You’ll be able to start work on the project shortly. If you received an unsuccessful bidder letter, pay attention to anything you may be able to learn from it. There will often be a section included that states the relative advantages and characteristics of the winning bid. If there is little information available to you, it doesn’t hurt to ask for feedback at this point. You may be able to learn some lessons for next time, or work on anything that may have been missing from your bid.
The tender process can be daunting, especially where your company relies on being awarded tenders for the majority of your work. It’s important to strike a good balance between prompt delivery of your bid and creating a thorough, quality submission. If preparing tenders isn’t your usual specialty, you may be able to find a specialist company to help you with the tender process. However, every tender opportunity is a learning experience and it’s through consistent practice that you become an expert at both the process and winning tenders For help providing accurate, reliable takeoff and estimate costs for your tender process, request a 14-day trial of Countfire here.