Buyers appreciate honesty from suppliers over capacity constraints

30 July 2013

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31 July 2013 | Adam Leach 

The majority of procurement professionals would not be concerned if a bidder withdrew from a tender over worries it could not deliver the goods or services required.

 

Earlier this month, German manufacturer Siemens withdrew from the competition to supply 600 carriages of rolling stock for the Crossrail project over concerns the company did not have the spare capacity to honour the deal. 

The latest SM poll asked the panel of 100 buyers: “Would you be worried if you learned one of your suppliers had started withdrawing from bids over concerns it couldn’t manage the extra workload?” 

The majority of respondents, 59 per cent, stated they would not be concerned by such action, and in many cases explained they would respect the bidder for their honesty.

 

Shaun Evans, head of procurement at Lifestyle Services Group, said while he would not be alarmed, he would note the development and raise it. “I wouldn’t be worried about a supplier taking this stance, although I would expect to pick that sort of issue up in regular strategic meetings to understand if it was a sensible and pragmatic decision,” he told SM. 

Lesley Mason, head of procurement operations at Orbit Group, said she would see it as a positive for a potential vendor to be so honest. “In some ways it’s actually a good sign that suppliers are being realistic about whether they can deliver, before they bid. That surely must save everyone’s time.”

 

Andy Davies, director at the London Universities Purchasing Consortium, highlighted a recent example. “What a pity G4S didn’t do this last summer with its contract to London 2012.”

 

Nevertheless, 41 per cent of purchasers would be troubled if a bidder raised it as an issue. 

Stephen Regalado, corporate procurement officer in customer engagement at the London Borough of Lambeth, told SM: “If the reason that they could not manage to take on additional capacity is genuine, I would start to think about the contract or contracts they are delivering to my organisation and assess whether they can still deliver my service effectively.”

 

Yvonne Kemsley, group procurement manager at Spectrum Housing Group, said: “I would request an explanation from the supplier in question as to the rationale behind the withdrawal.”

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