0. ‘How Do You Get the Most from a Tender Exercise?’
COUP 2015
‘How Do You Get the Most from a Tender Exercise?’
Sept 9th 2015
Reg Grimes
Copyright 2011 FUJITSU

1. Why bother with a Tender exercise?
It’s my Job to do so
To get best value
Legal requirement
Informs decision making
Because it is the right thing to do
Legally Required

2. Key Areas to Consider Requirements Market Knowledge
Tender Stage / Process
Timescales
Communications
Tender Team
Evaluation criteria and model
Contracting Arrangements
Understanding Value for Money
Negotiating Strategy

3. Requirements – What do we really want to buy?
Be clear on what the requirements are in terms of:
Products – Hardware, Software
Services
Converged Technology
Be sure to have a clear specification(s)
Test the market, is what I want available?
Has it been provided before?
Do understand the costs?
Principle should be to buy on specification, not supplier, make or model
This will ensure no bias towards individual suppliers
Creates environment for creativity and flexibility
Provides the opportunity to consider options.
Suppliers will be willing to explore options to fulfil your requirements

4. Market Knowledge – do I know the market and who is capable of providing what I need.
Have we done enough research
The answer is always no but something is better than nothing
Get to know when enough is enough
Be prepared to demonstrate your knowledge
An intelligent buyer is a good buyer.
Will drive better inaction with suppliers
Supplier research
Who ? How Many? Monopoly? Market leaders? Niche players?
Market research
Size? Maturity? Fragmented?
Customer research
Who else is buying the same or similar products and services
Which sectors are customers operating

5. Tender Stage / Process Be prepared to run multi stage tenders :
PQQ
RFI
RFP
ITP
BAFO
E-auction
If you know what you what and the market – go to the stage that suits your timescales. Going straight to e-auction need not be a problem.
Running unnecessary tender stages wastes time and resources for all parties.
E-auctions should be a default stage until qualified out.

6. Timescales When agreed stick to them
Be realistic – start from the end and work backwards.
Be reasonable – try to provide suppliers with as much time as possible to provide you with a first class proposal
Shortening timescales to meet an artificial deadline will create problems
Allow contingency.
Avoid key holiday periods if possible
Allow time at the end for final contract negotiations.
Ensure all key stakeholders are available and lined up.

7. Communications Agree communication strategy and plan.
Be clear and concise in your instructions to bidders.
Establish single point out contact for questions coming back in from Suppliers on tender.
All responses to questions should be shared with all bidders in an open and transparent manner – state this in all tender documents.
Communication plan should include internal messaging to project sponsor and key stakeholder.
Effective communications means no surprises – particularly at approval stage.

8. Tender Team - Not just procurement
Ensure you have Executive sponsorship and escalation path.
Do you need a steering board
Can be useful to remove obstacles
This should be led and owned by Procurement we are the experts in running tenders.
Be as encompassing as possible but do not overload, ensure you have representation from :
Business Owner
Finance
Legal
Technical owners
Ensure every understands their role within the team – no passengers

9. Contracting Arrangements
Be clear on what terms and conditions are to be used.
Look to re-use existing agreements if possible
Saves time and resources both sides.
Be prepared to be flexible.
Have a contingency plan in place – your standard terms may not be suitable for eventual solution – e.g. SaaS, Cloud.
Do not make terms overly complex – keep them fit for purpose.
Have your red line items clear and concise.
Plan your exit now.

10. Evaluation Criteria Develop a concise and robust model.
Assign roles and responsibilities.
SME’s to score their own areas.
Procurement to own overall scoring.
Counter measures to mitigate extreme scoring by individuals
Ensure all criteria are identified.
Price?, Quality?, Technical?
Cultural fit to your organisation.
Service Delivery performance
Tender response / proposal
Adherence to contractual terms.
Allocate weightings and priorities, caution on over reliance on one criteria e.g. price.
Agree how many to take forward at each stage.

11. Understanding Value for Money
It is not all about purchase costs.
Draw out all the benefits to be delivered by the tender process.
Cost reductions
Process improvements
Technology advancements
Internal efficiencies
Long term support costs.
Cash flow benefits – improve payment terms / milestones.
Balance Needs vs Wants vs Desires.
Keep within your affordability envelop.
Avoid the “Bargains” from vendors, they seldom are and are often what you do need. Shelf ware is off no value.

12. Negotiating Strategy / Plan
Determine how many bidders you are going to take through to contract negotiations.
If resources available always consider talking two bidders through to contract negotiations
Ensure each team has appropriate structure.
Procurement x 2, Legal
Create a “War Room” use to collate information and feed negotiation teams with up to date positions.
Agree internally where the red lines are.
For each element of contract Price, Service, Contract, develop a negotiating position model – I use the B.M.W – Best, Median, Worst position.
Be brave – understand when you have a result and be prepared to walk away. Don’t to be shy to ask for that “extra” thing
Identify your tradeable items.
Look to leverage your full relationships with each bidder.

13. Questions