Tendering for Business
By Theo Muller, md MM Research ™
In our industry – market and social research – it is common for the client, particularly in government circles, to publish an open tender or a Request for Proposal (RFP). In the case of an open tender, it is up to the research provider to decide whether they want to participate in this tender and provide a proposal by the date stipulated in the tender documents.
Sometimes the client issues a selective tender to a small number of providers to participate in the tender process. Presumably, this selection process takes into account the skills and expertise of the potential providers as well as other factors like proximity or a longstanding relationship with one or more of the providers.
The practice of the tender process, particularly the open tender often issued by central or local government agencies, contains many flaws. There seems to be this obsession by the tendering parties with transparency and “fairness to everybody”, rendering the system all but fair and transparent.
Typically, an open tender works like this. Somebody within a government department creates a tender document, presumably after all the internal approvals have been met. (I mention government department, because the private sector rarely uses the instrument of an open tender)
In our office, we usually spend quite a bit of time taking the brief apart in determining whether the RFP is within our skill set and inevitably this process raises several questions. Here comes the first hurdle. Questions regarding the brief and tender docs have to be submitted in writing (email) by a certain date and the questions and response will be broadcast to all parties that have submitted questions.
I see two problems with this. First of all, more often than not, the nature of the questions that we raise are questions of insight and understanding. We try to obtain clarity around goals, objectives and outcomes. How is this research going to be used? Who are the beneficiaries? The response to these questions is likely to be a discussion rather than a written response.
Secondly, I query the wisdom of having to broadcast the questions and responses to our potential competitors, presumably in an effort to be transparent and fair to all tendering parties. Questions that we have raised form part of our competitive advantage. They were raised because of the work that we have done on the RFP thus far and there is no good reason why our questions and responses to these questions should be made available to our competitors. Fairness and transparency don’t not even come into that.
The tender documents often mention that the tendering parties are not to seek any contact with the client or gain information from representatives of the department that is commissioning the research. Isn’t this odd? In order to put forward a winning proposal, isn’t it logical, indeed desirable, to gain as much information as possible as input into the proposal? The client will benefit as much as the tendering party, for sure. By restricting contact with the client, isn’t the client stifling initiative, motivation and drive by the proposer? All in the name of transparency and fairness? If we as a research provider demonstrate initiative and motivation, should that not be encouraged rather than denied? I completely understand that it would not be possible to have meetings with 10, 20 or 30 research providers, all keen to demonstrate their enthusiasm for the project, but I do not think that simply denying the opportunity to obtain more information is the solution.
Having decided that this is a project that fits our business goals and aspirations, we set about writing the proposal or tender. No matter how many tenders or proposals we have done, writing a new one is always a VERY TIME-CONSUMING AND THEREFORE EXPENSIVE EXERCISE. In our case, we always write the best possible proposal we are capable of doing. We completely block out of our psyche the fact that there may be 15 or 20 others who are also preparing a proposal. It takes one person the best part of two weeks to write this proposal, more often than not with several other individuals also making time-consuming contributions. As there is no flexibility in respect of the deadline, the race against time is on.
We have now waited more than two weeks after we delivered the tender docs and still no word from the client. There are obviously many researchers who have done what we have done – deliver their best proposal ever. Often the deadline for response to our proposal comes and goes without a word from the client. Very frustrating. Shall I give them a call? Finally, a letter arrives in the mail. As you unfold the letter, you see that it is only a very short one. In my experience that is not a good sign. It will probably read like this:
Thank you very much for your proposal. We regret to advise that on this occasion your proposal has not been successful. We would like to keep the proposal on file for future reference. Many thanks for your efforts.
I would hasten to add that this response is not unique to MMResearch ™. Without exception, all researchers and research companies in the land get these letters.
Sometimes the letter contains an invitation for the addressee to contact the writer and seek feedback on the proposal. We have acted upon that on several occasions with mixed success. In most cases the writer wants to handle this process by telephone and rarely do they make themselves available for a face to face discussion. In general, I would have to say, we have not enjoyed massive learning from this process. Our proposal was always “very good and the decision was a very difficult one”.
Often we found out that the successful tender was the company “who did the project last year”, or “they did the pilot study in the lead-up to this survey”.
In summary, participating in an open tender issued by a government department, can be a very frustrating and demoralizing affair. It is not for the faint-hearted. A selective tender often follows the same procedures and processes, but at least there is the comforting thought that there is only a small number of providers and presumably all the selected providers have been identified a priory as having something special to offer.
Let me now describe a tendering process in which we recently participated and, which in my view, is totally fair, transparent and stimulates the providers to take initiative, to be creative and develop a competitive edge.
Here is how it worked, or at least how we perceived it to work.
It was clear from the initial approach that the client had “done their considerable homework”, before we were even approached. They had “profiled” the type of company that they wanted to work with; they were looking for a business partner, not just a supplier.
This stage of the process involved their own intelligence gathering, “asking around” and a detailed study of the website of the various candidates. This provided the client with a shortlist that they would approach with a “registration of interest”. Whilst I do not know how many companies or providers were on this shortlist, it would not have been more than four or five. Eventually three companies squared off.
I received a telephone call one day last year and I was given a brief description of the client’s needs and the question, “would you be interested in being part of this process”. There was no doubt in my mind that they knew more about my company than they let on in our brief discussion. They had done their homework.
The first stage of the process involved a one hour meeting with each of the three selected research companies. The objective of this meeting was to get our input into developing the Request for Proposal that would be sent to the tendering parties. It was explained that this meeting was our meeting and to be used by us as we saw fit.
In our case we prepared for this meeting by creating a short PowerPoint presentation introducing the likely team that would be working on this account. We also provided an overview of current issues in the Market Research Sector in New Zealand. As part of this presentation we provided key headings that, we believed, should be part of an effective Request for Proposal. Finally, we had our own questions about the nature of the relationship between client and provider.
Both parties added value at a high level and we came away from that meeting feeling valued and respected. It was clear to us that the client was looking for a high level and strategic partnership and not just another supplier of services. This was for the long term.
On the stipulated date the three contenders received the RFP. It was a very good RFP. There were two parts to it. Part One contained a number of questions that mainly focused on the relationship between the parties and how we, as a future business partner, can add value at a strategic level to the client’s business.
Part Two contained the details of a research brief for a nation-wide survey with the request to propose a complete research strategy including design, methods and overall intended execution.
Along with the RFP there was an invitation to the potential research partners to discuss the RFP, to obtain more information and to ask questions. By this time we were hooked. We loved the process and gave it our very best. We had more questions, we had another meeting and we were very well informed when we wrote our proposal. It took us two weeks to complete our proposal and we delivered it as instructed with one day to spare.
Lastly, we were given the opportunity to present our proposal to the senior management team. The client made the stipulation that we were not to introduce new material in the presentation that was not already in our written submission and that the presentation should not exceed one hour in duration. Fair enough.
At the conclusion of the presentation the client had questions for us. As our presentation team consisted of three people, we felt that we covered the field quite well.
Exactly as promised, the client advised the three research companies who the “winner” was, at the same time extending an invitation to all three providers to obtain feedback on their proposals in a face-to-face meeting.
The whole process was very professional, transparent and extremely fair.