In an interesting move (and perhaps surprising that this wasn’t already in place) The Air Force Life Cycle Management Center Female Fitment Program Office has awarded a contract to produce and develop body armour specifically designed to better protect female Airmen during combat and contingency operations:
Metro de Santiago has issued a tender for construction of the first section of its new east – west Line 7, aiming to relieve saturation on the existing route. This is described as the “largest investment that Metro de Santiago has ever made in a single route” at an expected value of around US$2·9bn. Great news for the economy and infrastructure:
We’ve found ourselves in an uncertain period during the COVID-19 pandemic and lockdown. Now that businesses and procurement are starting to ramp up once more, suppliers may be tempted to bid for more tenders than they should or would normally, to get their foot in the door again.
However, bid more does not mean win more. You should only submit a tender response when you have a strong chance of winning, at a competitive rate (yet still financially viable), at a balanced risk to your business – AND when you have continually assessed and proven the justification to continue. If you’re bidding for everything, are you wasting resources on marginal, or even unwanted opportunities? Would you still have enough resources to bid if that really strong opportunity comes along at the same time?
We have probably all encountered those stakeholders who want to bid for an opportunity because they know the Chairman’s brother from school, or because they met the procurement lead at an event and it would “look bad” if we didn’t bid, even if we don’t want to win it. However, wouldn’t it look worse if you bid with no clear, relevant, or cost-effective solution for the client? With no experience in their field? Without a suitably skilled and experienced team? The likelihood is this would damage your relationship with the client more than choosing not to bid for valid reasons.
The APMP Body of Knowledge (BOK) sets out six decision gates on the path from qualification to submission. Note that the first gate, market entry, is not related to a specific opportunity but to your engagement with a particular market, so for this article, we’ll assume that gate has been passed!
The decision to bid or not bid should be core to your business development activity. According to APMP, the most successful organisations eventually pursue less than 30% of their pipeline and achieve win rates of more than 70%. Decision gates shouldn’t be thought of as something to just “get done”. They should be carefully planned and diarised; bringing together the key people in your organisation to decide whether to allocate or remove resource from an opportunity, and thus avoid over-investment in low-probability tenders. What this means is that appropriate time and resource should be allocated to the process. At a previous defence organisation, we spent more time and resource proving why we shouldn’t bid a particular opportunity, than that spent on a much stronger opportunity!
The bid decision gates described in the BOK, and the core questions you should be asking at each, are:
- Opportunity qualification: is the opportunity worth using our resources to research and assess it further?
- Bid pursuit: should we develop opportunity plans and allocate time and resource trying to influence the customer to prefer us and our solution?
- Bid/no-bid decision: have we positioned ourselves favourably enough to justify planning to develop a proposal and having a good chance of winning?
- Bid validation: is the opportunity still worth pursuing, and a proposal worth preparing, now we know more about it?
- Final review: should we submit, considering the anticipated financial reward and level of risk?
Did you spot where the RFP was released? Would/did it surprise you to learn that it’s actually later than you might expect through the business development pathway, between the bid/no-bid and the bid validation decision gates?
If your business development cycle is working effectively, your account (and often your project managers if you are bidding as an incumbent) should know – and more importantly, truly understand – enough about the customer and the opportunity for a decision to be made before the tender documentation is even released and the bid team gets involved.
At all stages, the core questions you should be asking are: do we know and understand this customer? Do we understand what they want and need? Do we have proven, demonstrable, experience in this area? Do we have the right team to deliver? Can we offer something no competitor can? Would our solution provide real value (not just a cheaper option) to the client?
If the answer to any of these questions is no, you should seriously consider not bidding. No matter how good a friend the Chairman’s brother is.
More exciting renewables contracts news! The introduction of competitive bidding in this space has driven India’s solar tariffs to an all-time low:
Bringing much-needed transparency and cost-saving to contract awards, and in-line with international anti-corruption standards, the Vatican has introduced a new law for competitive bidding:
In mid-May 2020, news broke that the UK Government had awarded over £1bn in state contracts outside competitive procurement during the peak of the COVID-19 pandemic.
Under EU procurement rules, any services/supplies contract valued at over €139,000 (£124,400) must be competitively tendered – with an exclusion given for “cases of extreme urgency”. Of the total 177 state contracts awarded during the period from March 2020, 115 were awarded exercising this exclusion to the rules, with the Government awarding contracts for administering COVID-19 tests, the provision of personal protective equipment (PPE) and food parcels, and running an operations room alongside civil servants. Two of the individual contracts awarded were worth more than £200m each.
Whilst big-name commercial firms saw success through this route, interestingly the fast-track rules did mean that firms which may not normally have qualified through the formal process for a variety of reasons (turnover, size, experience etc.) have been given an opportunity. Take the 16-man pest control company, for example, awarded a high value contract to procure PPE for frontline healthcare staff. As we know, many Government procurements specify a minimum turnover for qualification. Under normal competitive circumstances, would this family firm – said to previously have net assets of £18k – have even got a look-in? The contract award made this firm the Government’s largest PPE supplier.
The volume and value of contracts awarded via this exclusion route could set a dangerous precedent though, invoking a ‘race to the bottom’ in future tenders where the value brought by quality, ability and experience should legitimately be considered as part of the evaluation as well as the price – our friend the MEAT award. Indeed, both the National Audit Office and parliament’s public accounts committee have said they will evaluate the contracts awarded during this period to ensure they do indeed represent value for money. Confidence will need to be restored in the competitive procurement process once the fast track rules are no longer deemed appropriate.
After highs in March and April, construction contract signings were back to their usual monthly average in May 2020. Just shows that the UK’s construction industry did not slow down its planning for the post-COVID economy:
And in further hot off the press related developments, the UK Government published its construction procurement pipeline for through-2021 yesterday. £37bn of contracts is excellent news!
A few weeks ago, I saw a post asking for suggestions on SMART objectives for Bid Managers. Ask anyone how you should assess the performance of a Bid Manager, and I would guess 9 times out of 10, the answer you’ll get is by their win rate. However, this is extremely limiting – both to your Bid Manager, and your organisation.
While the APMP Body of Knowledge (BOK) doesn’t focus specifically on the performance management of Bid and Proposal Managers, it does provide guidance in putting in place a programme of metrics to measure your organisation’s business development performance. This guidance can be adapted and transferred to managing the performance of your bid management team. Continuous improvement should still be the key factor underpinning such metrics.
Having previously been asked to set my own objectives, I believe a Bid Manager’s performance should be measured across three factors – business, personal development and organisational development.
Back to the dreaded win rate. Clearly many organisations, and their Bid Managers, are ultimately measured by this metric – how successful are we? Unfortunately, as many of us know, we can write the highest quality bids in the world, some decisions will always just come down to price. And any win rate based on volume will be impacted by the success of your bid pursuit decision process. APMP and Shipley both point to capture ratios as a more effective measure – the value of bids won as a proportion of the value of bids submitted, with a higher rate meaning you are winning more of the larger, often more competitive, competitions. Rather than state a % capture rate as a blanket measure, or even maintaining a capture ratio within a particular window, perhaps instead make it relative to your organisation e.g. improve last FY performance by x%.
There are undoubtedly other bid workload measures which could be used as SMART goals. Success to your organisation might be winning a particular opportunity that is coming out to tender, winning a particular new client, unseating an incumbent or entering a new sector. Or simply implementing and maintaining a regular reporting pack.
Underpinning all this, any bid only ever has a chance of success if it is submitted to the client’s compliance criteria and, of course, on time. 100% compliance of submitted bids is a given.
As the BOK sets out, an effective metrics programme monitors and improves performance. The same applies to your Bid Manager – their own development and improvement is just as important. After all, if your teams aren’t motivated, will they put their heart and soul into a bid for you?
Personal objectives should not just be about what training your Bid Manager can undertake – however, developing a skill set through undertaking IT training (for example, Adobe InDesign, Microsoft Project), APMP or management qualifications, and attending APMP webinars / conferences strongly merit inclusion.
Leadership soft skills are equally important – both their own, and developing others. As an example, one of my objectives was to develop and run training workshops for operational staff who regularly contributed to bids. As a secondary benefit, this increases your organisation’s ability to respond, through a wider resource pool who can input into the bid writing process.
Or, if they don’t already, perhaps give your Bid Manager an objective to attend some of your Management Board Meetings with your organisation’s key stakeholders to present on the bid pipeline, capture rates and lessons learned.
The BOK refers frequently to proof points – quotes, awards, past performance – as a key part of writing a compelling bid. But how often do we wait for the bid writing stage to collect and manage this information? Instead, the continual collection of proof points and update into the bid/knowledge library should be a formal objective of the Bid Manager’s role. Perhaps they could establish a bi-monthly or quarterly meeting with key operational leads? Face to face discussion can often lead to evidence naturally being shared that might have been forgotten or not thought important when requested for a specific bid.
A second area could be measuring your Bid Manager on analysing debrief feedback to understand where there are key organisational improvement areas. If you regularly receive feedback that, for example, your technology is not as intuitive as other bidders, or training of staff is lacking in a certain area – could your Bid Manager then work with the appropriate operational teams to act on this and make improvements? Of course, analysing debrief feedback to identify gaps and sharing with the right people might be an objective if you don’t already do this systematically.
There is no one size fits all, and there are many more organisational-specific (and even industry-specific) objectives that will be valid to measure your Bid Manager’s performance. The key is ensuring they focus on continuous improvement – both for the individual, and your organisation. It’s not just about the win rate.