Preparing bids, tenders and proposals

08 March 2020

Bidding is hard work - it's not the first 90% that will kill you; it's the second 90%.

Preparing a large bid is hard work. And it always seems that when you feel you are nearing completion - you still end-up working through the night.

Having good process assists in making the journey smoother; this article seeks to provide some guidance in that direction. However, the best tip is always ask yourself "should we bidding on this opportunity at all?"

The first step in preparing a bid is to first complete the capture plan.

If the the outcome from capture planning recommends proceeding with the bid, then you will already have the basis of a bid strategy worked out.

The absence of a clear strategy (i.e. not being able to answer "what makes us think we have a good chance of winning this project?") should be one good reason not to waste resources on bidding.

Assuming a green light, bidding comprises four steps: detailed bid evaluation, solution development and pricing, proposal writing, and submitting the bid.

Bidding /Detailed Bid Evaluation

Bidding should always begin with a detailed review of the bid specification.

In the case where the customer has supplied a detailed bid specification, the bid is carefully read through by each member of your bid team. This may have already taken place during capture planning, however, after deciding to proceed the bid review process is generally repeated in greater detail.

When you have identified the opportunity early, capture planning can take place prior to receiving the bid specification. In some cases you may have the opportunity to either write the specification for the client (based on the needs analysis) or have assisted the client with preparing their specification. This is good practice as it provides the opportunity to steer the specification toward your capabilities.

During bid evaluation, the bid strategy is finalised and decisions such as submitting an alternative bid along with a conforming bid are made. In addition, options may be added to the bid to provide the opportunity to submit a price range and to encourage further discussion after the bid is submitted and before the bid is awarded (this is called 'getting a second bite at the cherry').

Bidding /Solution Development and Pricing

This is obviously a critical and defining step in the process. This is where the technical solution is developed in some detail and priced.

There is a balancing act required between overcooking the bid (and increasing the bid cost) and under-cooking the bid (failing to present an impressive solution and/or not getting the price right). Worse, sometimes developing a workable solution doesn't come easy, and it is impossible not to invest a lot of time.

Depending on the type of work, sometimes it's possible to not fully resolve the design work and you must make an educated allowance for the amount of time required to complete the design after winning the job. Clearly, there is an element of risk. However, narrowing the focus of the work scope (the type of work you bid for) enables building experience and therefore confidence when using this approach (read more about the importance of business focus here: What cycling teaches you about business).

Final build specifications and drawings are often left until the job is won.

To ensure consistency when pricing, a standardised spreadsheet format and checklists should be used to ensure that important items aren't left out. Again, narrowing the type of project enables building thorough checklists.

Trap for young players:
Many organisations request documentation such as as-built drawings, commissioning procedures, specifications for the entire project (and individual components), servicing and maintenance procedures, training manuals, and safe work procedures.

Make sure you clarify exactly what they expect. I have seen documentation rejected simply because it wasn't written using the buyer's standard format (numbering schemes, fonts and page sizes etc.) and for lacking detail. Writing documentation can become an enormous expense.

Often final payment is held-up until the manuals are delivered. If the person approving the manuals becomes pedantic and difficult and there is disagreement regarding what is considered acceptable - payment can be held-up for months.

Beating the bid

Mature solution selling organisations aim to win a project through pitching their price sufficient to ensure profitability but avoiding submitting an un-competitive price. Once they have secured the order, the organisation then aims to deliver the project with a higher margin than calculated during the bidding process. This is called "beating the bid." Clearly, accurate estimating is critical and disciplined project management is required.

Bidding /Proposal Writing

There are four key requirements to writing a great proposal...

Answer the requirements
Make it look professional
Sell the solution
Articulate your bid strategy

Answering the requirements

Apart from describing and displaying your proposed solution, most RFPs (Request for Proposal) have a list of mandatory requirements. Typically...

Corporate information: Proper company name, address, ABN etc.
Integrated Management System: Some organizations expect you to provide full copies (hard copies and electronic) of your entire Integrated Management System (Quality Manual, Safety, Environmental, Company Policies etc.) - from this, they deduce the maturity of your systems and judge if they are 'window dressing' or actually fully implemented.
A compliance list: This is an extensive table running over many pages listing of items the tenderer is expected to answer with either Complies, Doesn't Comply, or Exceeds Requirement and with a final column marked as "comment". In the comments section you are expected to supply substantiation for your response.
Company financials: The most recent company financial returns, usually last 3-years Profit & Loss statement and balance sheet. This is used to assess the financial strength of the organisation (and possibly to see how desperate you might be to win the contract).
Substantiating information: Usually referenced to the compliance list: The tenderer supplies copies of documents like Certificates of Currency for Insurances (Public Liability, Professional Indemnity, and Workforce Insurance).

Make it look professional

It used to be enough to simply provide a great price, a great technical solution and type it all out and send it off. Not any more. Organizations evaluating proposals do judge books by their covers. JWPM has received a number of brief's from clients who have literally been told "love your work, but your bids look like rubbish" and have been strongly encouraged to smarten them up.

Sell the solution

The key to winning the solution sale is to (obviously) put forward an innovative "clever" solution. However, sometimes technical people have trouble focusing on the "secret herbs and spices." No matter how smart your customer is, make sure your proposal clearly spells out the kernel of why your solution is technically superior and don't bury it in among the routine technical bumf. Sometimes you need professional external assistance to re-write your proposal to achieve this clarity.

Submit your bid subject to confidentiality

You have invested time and proprietary knowledge into the development of your solution. Make it clear, that...

Your bid cannot be discussed with any third party (particularly your competitors)
You retain the intellectual property until they pay for it.

Of course, some of these conditions may be in disagreement to the customers terms and conditions of bidding; a condition of bidding may be that any submitted designs or concepts become their property. This is rare but not unheard of (and probably illegal). Read the conditions of tender carefully. Organisations that play this game are giving away an early signal that perhaps this opportunity should be avoided.

Bidding /Submit the bid

General advice...

Make sure you submit before the deadline. Kind of obvious, however - the deadline sometimes is forgotten or Fred thought Bill was keeping an eye on the deadline. The other trap is assuming an end of the day deadline, and then at the last minute seeing the tender specification said 2 PM. Doh!

There is nothing more irksome than having to contact the potential client and beg to have your late bid included because "the dog ate my homework."

Always hand deliver the proposal. I remember once partnering with another firm to submit a collaborative bid on a project. They took responsibility for delivering the bid. They ordered a courier instead of hand-delivering the bid. By the time the courier got there the tender box was closed. We were excluded from the bid. Seems the courier company put five other deliveries on the run and ours was the last for the day; a trap for young players.
When submitting electronically, assume the upload to the portal will be overloaded and/or can't upload large files. Best to find this out well in advance of the deadline.
Have someone senior independently check the bid (a person who hasn't been involved in the preparation). More than one bid has been submitted with a zero missing from the price.
Find the person in your organisation that is the resident pedant and/or grammarian and have them check the bid. This person will find all the wrong page numbers, missing pages, repeated content, stuff that doesn't make sense, pages that are upside down, and missing appendices. All the things that make you look like hicks.
Check all requirements have been met. During the process of evaluating the bid and putting it together, it's advisable to build a checklist of items that should be included in the bid. Now is the time to pull that list out and tick it off.
Prepare the final copy (publish). If hard copies are required make sure you've allowed enough time to print, collate and bind the required number of copies. The printer WILL BREAK DOWN (somehow they know), best to assume that in advance and have a contingency plan and allow enough time to execute the plan without having a meltdown.
Read through the final copies: This is where you find the errors that everyone else missed. For example, the client's name has a typo and appears in the footer of every page.

Bid preparation - final checklist

Many companies develop a final checklist. Before sending the bid off, the checklist is used to methodically check through the bid to find the "usual stupid mistakes."

The final bid checklist shouldn't include checking for fundamental errors that will require hours or days of week to remedy, but are confined to quick fixes (although it should be noted, reprinting multiple hard copy bids can take hours). Rather the final checklist should include checks like...

Have we included the pricing schedule?
Is the final price quoted consistent throughout the document?
Have we used consistent treatment of GST and Currency quoted?
Have we included the Tender Number as specified in the RFT/RFQ (Request For Tender/Request For Proposal)
Are the page numbers continuous through out the document?
Is the table of contents finalised and have we updated the page numbers?
Have we included the appendices and other attachments?

You get the idea.

JWPM Consulting

Proposal Writing - do it right