Tender Collaboration - Trick or Trust?

The term collaboration can be interpreted in many different positive and negative ways but what is the general interpretation of the word Collaboration?

My preferred definition of collaboration is:

"two or more parties working together to achieve a common goal which would be difficult to achieve individually."

It seems logical doesn't it? Well, it seems not when we talk about SME / Micro inter business collaboration.

Corporates have been collaborating for years; smaller businesses tend to shy away from collaboration, but we have to ask ourselves why? Why don't we search for and embrace others willing to collaborate especially as it could help us generate income that we would not normally secure?

Many business owners and leaders in the UK tend to have the built in blinkered defence mechanism that treats all businesses, similar to their own, as competitors. We tend to believe that allowing competitors close to us will expose us to unnecessary risks and allows them to 'steal' business, ideas, processes and custom from us.

We remember a businessman saying "Why would you let a fox babysit your chickens?" He had a valid point….didn't he? Is it just a trick by one company to find out about their competitor?

My view is that it would only be a valid point if

• You had failed to research the fox
• You didn't trust the fox
• You had drawn your views based on the negative actions of other foxes

Let us look at the positive aspects of collaboration, joint working and partnerships:

• Better win ratio- greatly improved percentage wins
•  Less competition as competitors working together
• Collective approach which allows:
• Total turnover multiplied up by the number of collaborators / partners involved in the response (many organisations still expect the annual contract value to be less than 33 % of tenderers turnover
• improved and broader skill sets on offer to client
• spread of risk
• spread of costs
• spread of liability
• broader reference portfolio (could be one company specialises in Public Sector and the other in the Private Sector)
• Look more appealing (bigger) to tendering organisations
• Provide long term security for all parties involved to aide effective planning and resourcing

Things that prevent partnering, collaboration and joint working when looking to successfully win tenders are:

• Mistrust
• Doubt
• Secrecy
• Lack of/poor commercial agreements/contract detailing roles, responsibilities and remuneration
• Poor planning and research
• Wrongly selected collaborators / partners companies

Legal Form Options for Collaboration

If you decide that you wish to collaborate or see a collaboration opportunity then you need to consider the following options /model approaches.

Jointly controlled legal entity:

• LLP
• Company Ltd by shares
• Company Ltd by guarantee
  • Charity
  • Community Interest Company (CIC)

Consortium / contractual framework with steering group

Consortium /contractual framework

Collaboration is not just about going in with competitors it is also about collaborating with other businesses that can complement the products or services your business offers.

Examples of Collaboration when completing a PQQ /ITT

A Building / Construction Company may collaborate on a PQQ/ITT with:

• Heating and Engineering Company
• Electrical Engineering Company
• Plastering Company
• Landscaping Company

An IT Hardware Company may collaborate on a PQQ / ITT with:

• Network / Cabling Company
• Hosting Company
• Professional Services / Project Management Company
• Software Company

As competition increases and more businesses are bidding for tenders where the tendering organisations are pushing down spend and thus squeezing margins, businesses themselves must look at how to approach and win tenders more efficiently and effectively.

The Government, especially David Cameron, is also looking towards Social Enterprises and Charities to deliver goods and services within our communities so it could be wise for businesses to strategically align themselves with these organisations as, we have found recently, there are usually mutual benefits for both parties.

One thing that we would advise is NOT to try and get your company tender ready, collaboration ready and prepare a PQQ / ITT response all at the same time. You must identify and start talks with possible collaborators / partners in advance of the contract notice; that way you are not trying to facilitate many complex elements all at the same time.

We would always recommend that you seek professional advice, attend a workshop and enter into any collaboration with care. As they say "Only fools rush in".

We can offer collaboration training workshops, advice and sit you down with our legal advisors to take you through the process. Get in touch with us.

Paul Tute

Boomerang Consultancy Limited specialise in responding to PQQs, Tenders, ITT, Bid writing, expressions of interest, post tender reviews, bid management, writing contract notices, managing the full procurement lifecycle and providing interim managers / project teams into public and private sector organisations. We also offer ISO 9001 and 14001 as well as workshops on developing quality, environmental, Business Continuity, health and safety, CSR and equality and diversity policies.

MD - Boomerang Consultancy Limited- Helping You Win Tenders

www.boomerangconsultancy.com

Many see tendering as a 'black art', which it can be if you let it. It seems, to many, that tendering is getting harder; when in reality the tender process is not getting harder but winning a tender is getting harder because more people are competing for the same business and people still do not place value on being tender ready before going in for a tender.

Many people responding to tenders tend to feel dejected when they spend a great amount of time on a response and do not even get to the next stage and end up dismissing 'business from tenders' as a waste of time. In reality what we should be doing is taking a step back and asking ourselves some important questions:

1. Is my company capable of undertaking this contract?

2. Do we have the capacity (money, people etc)?

3. Are we at least a 65% fit for this tender?

4. Are we able to satisfy the requirements of the mandatory questions?

5. Are all of our policies and procedures in order and do we have a copy of our accounts / trading history?

6. Did we get feedback from the last tender we submitted - have we taken stock of where we went wrong?

7. Have we read and thoroughly understand the requirements of the tender?

In our view, someone responding to a tender for the first time should start locally. We all want the BIG contract but we must recognise and be realistic about our capabilities. We chat, to many people who have never tendered before, and they detail to us the tenders they are considering and we find the opportunities are usually:

1. Out of area - Hard and costly to manage

2. Too higher value for the turnover of the business

3. Not a suitable fit for that business

The best thing to do is get TENDER READY - do not try and become tender ready at the same time you are responding to a tender opportunity as you will fail on both counts. There is no point in fitting a front door to a house that has no walls.

Many small businesses attempt several tenders before giving up and that is when a person states that "It is getting harder for small businesses to win tenders". Get the basics right and you will find your success rate (through to next round / winning tenders) will improve dramatically. Stick at it and it does get easier and there are so many tender opportunities out there for small businesses.

It is also worth seeking professional advice for that extra support and guidance at the start of your tendering journey.

Paul Tute

MD - Boomerang Consultancy Limited- Helping You Win Tenders

www.boomerangconsultancy.com

Boomerang Consultancy Limited specialise in responding to PQQs, Tenders, ITT, Bids, expressions of interest, post tender reviews, bid management, writing contract notices, managing the full procurement lifecycle and providing interim managers / project teams into public and private sector organisations.

Wanting To Find Public Sector Tenders / Contracts?

The Government is a step closer to helping small businesses access low value public sector contracts by launching a new website. Also included within the site are high value contracts which are a download from Tenders Electronic Daily (TED).  This new site should help small local businesses bid for work that was previously hard to find (or know about) either because the public sector organisations:

1. Had their own supplier register (rarely advertised) where lower value (below threshold) products, services and work were awarded to those lucky enough to know about the register
2. Randomly went through the Yellow Pages and selected 3 companies to quote for the work
3. Suppliers already with major contracts would be given the unadvertised contracts

All of the above approaches were / are legal and normal practice as they are not governed by OJEU and the procedures were in line with local policy. The new government now want:

1. Transparency regarding spending
2. To encourage the awarding of contracts to smaller companies in a fair and transparent way

We will have to watch this space to see if all public sector organisations comply.  

Below is the letter from the PM David Cameron: 

When we came into government, we inherited a system of doing business that was wasteful, inefficient and inflexible. In his efficiency review last year, Sir Philip Green uncovered some shocking examples: departments paying anything between £8 and £73 for a box of paper, for example. One problem was secrecy - contracts being signed behind closed doors, with no opportunity for public scrutiny. Another was the lack of competition, with small and medium-sized businesses, charities and social enterprises being actively discouraged by the system from competing for government contracts.

We launched a feedback portal on the Number 10 website for businesses, like you, to tell us what was going wrong and how we should fix it. Many of you have responded. We have heard about organisations being told they could only compete for government contracts if they had sold to government before; companies with new ideas but no mechanism to present them to us; and complaints about the complexity and lengthiness of our processes. As a result, despite accounting for 50 per cent of the turnover of the UK business economy, we estimate that SMEs only win a small proportion of the billions of pounds of public sector business.

This is unacceptable, so today we are announcing a package of measures to make doing business with government more transparent, and more welcoming to smaller companies, charities and social enterprises. Last month, we started to publish every central government contract worth over £25,000 in full, opening them up to scrutiny by potential competitors and the general public. In order to help companies find this business, we are today launching an online tool, Contracts Finder, which will display every central government tender opportunity, with an email alert facility to let you know when new ones in your area of business come up.

To reduce the time and bureaucracy in competing for a government contract, we will seek to eliminate the prequalification process for lower-value procurements, and are introducing a straightforward questionnaire for the rest that you will only need to complete once for common goods and services, rather than resubmitting the same data every time. We are also announcing a series of surgeries where companies with innovative products and services will be able to come and pitch to government - rather than waiting for the right tender to be issued.

Our ambition is that 25 per cent of government business should go to SMEs, and that many more contracts should be won by charities and social enterprises. In order to achieve this, we need your help. You can see the Number 10 portal here - if you have experience of doing business with government, continue to give us your feedback, including what you think about the announcements we are making today; and please log on to Contracts Finder, and use it to start bidding for government contract.

There are opportunities here for all of us. By opening up government business to you, you can help us to make government less wasteful, to promote enterprise, and to modernise our public services by encouraging competition and innovation. If you think you can provide a great service to government, or you know a friend, family member, business or charity that could, then get online, get involved, be creative, be innovative and start searching for contracts now.

Link to the new contract website: http://www.contractsfinder.businesslink.gov.uk/

Paul Tute

Boomerang Consultancy - Helping You Win PQQs, Bids and Tenders

www.boomerangconsultancy.com

Boomerang Consultancy Limited specialise in responding to PQQs, Tenders, ITT, Bids, expressions of interest, post tender reviews, bid management, writing contract notices, managing the full procurement lifecycle and providing interim managers / project teams into public and private sector organisations.

The question is....Will tender prices now fall further as the Public Sector(PS) squeezes more value out of their contractors for less money? It seems that many PS organisations are focussing on cost rather than quality....is this a false economy? Will we get to a point where contractors / suppliers will just bow out and say "Sorry we cannot tender the margins are too small"?

Tender prices fell once more in Q2 2010 according to the latest UK Construction Tender Price Index compiled by BCIS.

Wednesday 19th January saw the release of the Health and Social Care Bill 132. We can now formally see how dramatic the changes actually are and get an appreciation of how the new bill will affect not only the services we receive but more importantly how they are delivered and who will deliver them. PCTs and SHAs will be abolished totally and the majority of responsibility (from an NHS perspective) will be passed over to GPs and GP consortia. This will open up new local opportunities for suppliers, but many fear that most of the opportunities will, as ever, bypass smaller firms and be directed straight to the main players who may or may not sub contract the work out. The best thing to do is identify who are the new / proposed consortia in your area and approach them, expressing an interest in providing, to them, your goods / services. You need to have a unique selling point so that you stand out from the rest of the crowd as you will be just one of MANY companies contacting these consortia's directly.

Click on our link http://tinyurl.com/62w78pg to download the New Health and Social Care Bill