Tendering for Contracts Training - Top Ten Procurement Tips

Creating a Level Playing Field in Public Sector Tendering and Contracting:       Contract Tendering Tips

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(7)  Improve your selling power - form a (local) consortium to get and give a better deal.

Your trained employees give a great boost to efficiencies. They acknowledge the importance of the 'licence to tender' role held by the nominated person. They help build on this persons existing knowledge and expertise and provide an excellent 're-focus' opportunity by:
    A consortium is simply an association or group of businesses who join together to minimize costs, maximise selling power and provide better value for money.
  • ESPO, NEPO, WMS, YPO etc. ?????
  • The higher the volume of business going through these agreements the better the quality and price you can offer.
  • The main benefits for doing this are:
  • Sharing administrative workload - an advantage when tendering is involved.
  • Increased selling power - greater volumes of business may encourage you to create better deals for the group.
  • Reduced costs..
  • Ability to obtain goods/services- A consortium would provide the necessary size and influence.
  • Experience - a consortium including larger businesses means that smaller businesses can use their experience.
  • Greater negotiating power - the public sector may be tempted to take advantage of smaller businesses; however, the threat of losing products and services from a consortium will have an impact.

(8)  Negotiate, negotiate, negotiate - get the very best deal for your efforts.

Negotiation is much easier if someone is designated within the company as holding the 'licence to tender' role (possibly more than one person depending on structure of the company). Their negotiation skills will be honed by training (tip 1) and practical experience. Even if they won't be directly involved in the negotiation they will be able to advise or team up at the meeting. Some things to consider.
  • When to negotiate? Never pass up an opportunity to negotiate but make sure the opportunity is right (don't spend hours saving a ).
  • What is the right price? Remember negotiation isn't only about getting the price up or down it could also be about - giving increased quantities, better quality, better delivery timescales, offer an additional service (eg. ongoing maintenance) etc. It could even be about all of these things.
  • Who is the right person to negotiate? This will depend on who has the required knowledge and who has authority to make decisions on behalf of the company.
  • What your bargaining points are. Does the contractor need your products or services, what's in it for them - all about finding the right levers to use.
  • What is your goal - what you would ideally like from the deal, what would you be prepared to settle for? Take a bit of time before the negotiation to sit down and think through what bargaining points you have and hoped for goals (fall back ... ideal) through. Even if a price reduction is not possible what extras could you give an extra efficiency? Remember, win-win is always best.
  • Seal the deal - get it in writing. At the end of the negotiation summarise everything that has been agreed including the quality standards. This must be followed up in writing straight after the meeting making it clear that this is the final agreed position.
  • And ... enjoy this experience, pick up points that can be used next time around.

(9)  God is Love, we all know that, But whatever you do, GET IT IN WRITING - read and understand the small print.

  Have a question?

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It's what's in writing that matters. Although there may be a verbal agreement with the contractor that something will be supplied on a particular date, goods will be send in a particular way, 'extras' will be given - if it isn't in writing there's a better than average chance that you will be an unhappy supplier.
  • Terms & Conditions. Always make sure the terms and conditions that are met. Never accept any changes to these as the change has probably been made to advantage of the contractor and at the disadvantage of the supplier. If you are uncomfortable in using them, it might be worth questioning whether you have the right contract.
  • Never allow yourself to be pressured by the contractor -they need the goods and services. If you are being pressured it's likely the deal is not worth it.
  • Giving Quotes: An approach worth taking when giving out quotes when selling an unusual or challenging item is always to set out in writing what the contractor wants (essential when going out for formal quotes or formal tenders).
  • Write down what is required/specified. This helps build a common understanding and reduces opportunities for misunderstandings. If one contractor has misunderstood its likely others will too, even if they haven't raised the question.
  • The contractor will get quotes from other suppliers. This allows a fair comparison to be made between quotes supplied. It is good practice that the person who is dealing with the quotes is also the same person who speaks to suppliers or is involved and any site visits etc.

Additional Procurement Resources
UK_PSP - A_Level_Playing_Field
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