Top 10 things to think about your tendering process
So you’ve listed every document you need from suppliers in your request for tender (RFT). But are the documents the only things you need to think about before pushing your RFT out there for suppliers to access?
Very often, businesses tend to forget the bidder’s experience. Companies need to remember that their reputations also play a role in determining how keen bidders will be in their RFTs. After all, why would they bid on a project if they thought that they might be working with a client who is unsure of what they want, or might be known to be unreasonable, or even worse – unethical?
Bearing that in mind, let’s take a look at the top 10 things businesses should consider when designing their tendering process.
1. Ensuring Intent and Ability to Purchase
Before calling for a RFT, ensure that you already have the intent and means to complete the purchase. This could include ensuring that there is an actual need and the budget to proceed.
2. Minimum opening period
Suppliers require time to prepare the documents required for the RFT. Giving supplier sufficient time to clarify any doubts, as well as to prepare their documentation will go a long way to demonstrating that you are a fair buyer.
You could consider the scope of the documentation required for the RFT and cater sufficient time for suppliers, being careful to also take any feedback into consideration if suppliers say they need more time.
Alternatively, organisations may stipulate a minimum opening period their RFTs must be open for. This removes the need to consider the opening period for each RFT in an ad-hoc fashion.
3. Open to Public
If you want the best talent out there to respond to your RFT, consider making it an Open RFT (all suppliers may view and participate). Done right, this signals that the company is transparent in its procurement and happy to consider suppliers whom it may not already have worked with.
It is typical that tenders are posted publicly, especially for public procurement. Some of the places where the tenders are posted include the newspapers or on a procurement website like TenderBoard.
This is done to ensure that all potentially interested parties can easily access information on the tender. By doing so, you may just end up catching the eye of the best out there in the business.
Opening your tender to the public is great. But there’s a caveat. What if you end up attracting too many responses?
If this is a big concern, that running an open tender might result in too many bids being submitted, businesses should put in place a pre-qualification process.
The pre-qualification exercise is used to select vendors prior to a closed tender process being run. Typically, vendors are qualified based on relevant experience, certification or company size.
It is important not to set qualification standards too high as this could have an adverse effect on the competitiveness of the submissions.
5. Tender deposits and documents fees
These are basically the non-refundable fees that suppliers have to pay in order to get access to the tender documents.
The imposition of tender deposits and/or helps to ensure that only bona fide suppliers will participate in the tender.
6. Bid confidentiality
Remember when we said at the start that your company’s reputation plays a role in attracting the best suppliers? One way you can ensure the integrity of your organisation, is by adopting bid confidentiality practices. This is done by ensuring that your purchasers are not able to see the suppliers proposals until the RFT has come to a close and all suppliers have submitted their bids. This minimises the opportunity for collusion to occur as well.
It is of the utmost importance to ensure that suppliers do not feel that their bids might be compromised by competitors undercutting them if they submit their quotation early. In the pre-digital days, this was often done through a physical tender box that would be locked and only opened after the tender deadline had passed.
Openly stating that your company has measures in place to ensure bid confidentiality gives suppliers a piece of mind and builds trust between your brand and the bidders.
7. Two-envelope system
For some projects, you may consider deploying a Two-envelope bid submission system as a way to signal to suppliers that you will take both the price as well as the technical strength of the proposal into account.
In this system, the suppliers split their submissions into a technical submission and a price submission. These submissions would each be placed in a separate ‘envelope’.
When buyers evaluate, they may evaluate the technical proposal without being exposed to the price proposal. This helps to ensure that the evaluation of the technical merits of a bid will not be influenced by the bid pricing, allowing for a fairer assessment of value-for-money.
8. Timely communications with to suppliers
Practising timely communications will help ensure equitable treatment of your suppliers.
This includes keeping suppliers up to date of any changes to the RFT requirements, FAQ, and even when the deal is closed and they have not been awarded the deal.
One such method is to make an announcement via an e-procurement system such as TenderBoard. TenderBoard can automatically notify all suppliers of any changes made to your tenders. This helps streamline the communication process between your business and your suppliers.
9. Clarification with suppliers
To further improve open communication between your business and your suppliers, provide sufficient time for clarifications to be made.
A common practice is to ask suppliers submit their clarification requests prior to a stipulated deadline. This provides the buyers with sufficient time to respond with the clarifications.
Ensuring that you respond quickly to supplier clarifications will not only help provide them with they information they need to participate in the deal, it would also reinforce the image of a serious buyer.
10. Waiver of process
Lastly, be prepared for unexpected changes to the tending process and be open to adapt.
Sometimes, there are reasons to waive parts of the tender process. For example, an urgent requirement might mean that the opening period is shortened. Meanwhile, a sensitive requirement might mean that a tender cannot be posted openly and only suppliers who have signed a non-disclosure agreement might be eligible.
Situations like these necessitate the buyer to be able to quickly change their tender process.
In such cases, it is important to stipulate a waiver process with the appropriate Approving Authorities who can allow for waivers of the tender requirements.
We hope that this list has been using in informing you about the things to pay attention to when thinking about your tendering process. To learn more about e-procurement, we’ve prepared other useful resources that offers you more helpful tips about the topic.