What buyers want: 10 tips for suppliers bidding for contracts

5 August 2013
Stephen Ashcroft - January 2013As buyers, we always want to contract with the ‘right’ supplier to meet our specific circumstances. Suppliers – here are some pointers you might find helpful when seeking to win contracts. When preparing your bid, it is vital you bring out your competitive edge for the particular procurement. By definition, that means you need to know what your competitive edge really is. Equally important – do not assume we know!  This can only be known after appropriate research and feedback from previous bids, successful and unsuccessful. The competitive edge will obviously be linked to the specific procurement.
  1. Technical matters. When we analyse the technical content of bids, they are usually boring replications of the client’s specification and have obviously been written by a technical team with little commercial acumen. You should point out the benefits to the client in meeting their specification remembering buyers who read these sections might need the technical matters explained. Do not take understanding for granted. For example, if you have an extended warranty capability, offer this as a differentiator, rather than merely complying with the standard one-year requirement. If you have a product that needs less maintenance and downtime than a competitor’s, explain this as a value-for-money consideration and express the benefit in the language of the sector in which you are bidding – a council’s approach is quite different from an oil and gas company.
  2. Cost models. It can be a matter of competitive edge to offer cost models. There remains a marked resistance to divulging this level of information. You could link the point to partnering contracts where open book is a consideration and where you may be able to promote the thought of gain share. That is quite a different discussion than complying with a liquidated damages provision. We encounter suppliers who claim not to know their costs. That says a lot for the robustness of their financial systems. In some cases, professional arrogance, such as lawyers who refuse to break down hourly charge rates, is an issue.
  3. Supply chain management. Many suppliers are not in control of their supply chain and make no mention of this vital consideration in bids. A preparedness to drive into the detail of a supply chain is important and even more convincing if you have process-mapped it. The buyer will give due consideration to supply chain risk and will request such declaration.
  4. Risk registers. It is a distinct competitive advantage to have prepared a risk register and to have assigned probabilities to each risk. When this is accompanied by a serious evaluation and a strategy can be shown to mitigate the risk, this is a major advantage. The risks must be presented in a constructive and positive manner, otherwise you will create concerns in the buyer’s mind.
  5. Contractual compliance. There may be occasions when your contractual non-compliance position can be an advantage to the purchaser. There is no advantage in presenting a ‘tick list’ of contractual commentary usually written by an in-house lawyer who has little interest in winning the work. If a specific contract clause lacks focus explain that in the bid but explain why and the advantages to the buyer.
  6. Contract performance. If you have an excellent track record, explain so in your bid. When bid evaluation takes place this is always a factor. Explain why your performance is first class; explain your project and contract management processes; explain how you measure and monitor contract performance; explain how your key personnel operate. Turn this into financial benefits for the client – less cost means less worry.
  7. Financial performance. You will probably be asked for three years’ accounts. These are always supplied, but usually without any commentary. If you have an excellent financial performance, explain the salient points. Show you are not short of working capital, there is not excessive bank borrowing and profit is put back into the business as well as rewarding shareholders. You may consider including a ‘comprehensive report’ from D&B or equivalent. The empty words “we are financially healthy” are futile.
  8. Geographical location. This can be a vital consideration. Explain how your organisation manages contracts across a wide geographical spread and, if you are a long distance away from the buyer, explain how they will get first-class support.
  9. IT support. The ability to communicate effectively through IT and to conduct e-business is increasingly important. Explain your investment in IT and, more importantly, how this benefits the purchaser’s organisation. Explain what you do to maintain systems in the event of a failure.
  10. Sustainability. With the increasing profile of CSR and social value, you can really make a difference by explaining how you undertake social, economic and environmental impacts aligned with the values of the buyer.
This is my plea from the buy-side to the supply-side. Do other buyers have anything to add? ☛ Stephen Ashcroft is a purchasing and proposals coach at Brian Farrington. You can comment or connect with him on LinkedIn and follow him on Twitter
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