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