How much of your business comes from electrical tenders?
For many electrical businesses, tenders make up most, if not all of their business. You rely on an electrical estimator to do a thorough job of preparing an estimate, while your overall presentation of tender documents needs to be as close to perfect as possible.
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 a vendor receives your documents, they go through a tender evaluation process. This may look slightly different for each different vendor – everyone has their own preferences and methods.
A best practice that most vendors should follow is to put a bit of time into defining their tender evaluation criteria before they issue a bid document or Request for Proposal (RFP) in the first place. Their criteria will usually be a reflection of the risk and overall value of the contract.
Typically, if you are tendering for a government contract, the evaluation criteria and weightings of those criteria will be provided. In the private sector, this isn’t always the case, although most companies will provide you with their general criteria, even if they don’t list the weightings.
Cost is usually a key criteria, but it’s important to remember it’s not the only one. Many vendors will provide you with a costing template so that it makes it easier for them to line up bids and compare them without complicated analysis. Definitely use the template if it is provided – you may be knocked out of the running simply by not following directions.Vendors will typically define tender criteria first – check for projects you are interested in Click To Tweet
Typical criteria and steps for 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 begs the question, what might get you automatically disqualified? Here are some points:
- Missing or incomplete documentation. The vendor is unlikely to chase you looking for that document that got lost in a pile.
- Your tender doesn’t comply with mandatory tender and contract conditions for participation. (This could be any of a number of factors that make you noncompliant, for example, not having requisite licenses or experience).
- You haven’t followed the required format.
Once the review panel (or whoever is reviewing the tender) have disqualified any bids that they can, they will usually then assess against “non-cost” evaluation 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 proposal. 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
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.
“Value” might include things like your collective knowledge and experience. It also might include any of those non-cost criteria collectively with the price you have provided. If local jobs are a priority and you provide them, this could go in your favour.
A tool vendors often use to evaluate tenders is a scorecard. This helps them to easily rank the bids in order of preference and with a transparent scoring system. Sometimes, organisations will share their scorecard with you, so you can see exactly how you stacked up against others.
Awarding the 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 will 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.
Give yourself a better chance of success
Estimating and completing tender documentation are skills that are developed over time. To have the best chance of success, you need a combination of the right technical skills and experience, paired with the ability to put together an attractive bid.
Accuracy and timeliness are major factors in whether you are successful or not. If an electrical estimator has to rush their estimate, or if they use a method that is prone to inaccuracies, this may be enough to cost you the project.
One way to improve your chances is to use an automated takeoff software. Countfire helps electrical estimators to avoid inefficient and error-prone manual counting methods by providing true automated counting of takeoffs. This helps companies to make better use of their time for the rest of the documentation too – those “non-cost” criteria.
Preparing a winning bid is a skill that can be learned over time, but give yourself the best chance of doing so. Look carefully at the tender criteria and prepare a bid that answers each point. Be accurate, be timely and use the right tools to give yourself an advantage.
Get a free trial of Countfire here today.