Proportional Procurement – avoiding ‘over-engineered tenders’ to support Bidding for SMEs

Jul 29, 2020SME Champions, Bid Management, Tender Process

There has been a big drive over the past few years by the UK government to actively encourage Small and Medium-Sized Enterprises (SMEs) to tender for public sector contracts – something which we have warmly welcomed at Bid for Success given most of our client base is comprised of regional SMEs. However, we still see too many instances of what we term ‘over-engineered’ tenders and there are lots of consultants and public sector bodies guilty of this. What we mean is when the tender response requirements are disproportionately high, onerous, technically complex and/or time consuming when compared to the value of the end contract it creates a barrier to bidding for SMEs.

Let’s give you an anonymous example of what we mean. A building maintenance contract worth less than £250k per annum following a restricted tender. Nothing too unusual in that we agree, but what about:

  • A long-winded SQ (pre-qualification document) with a dozen scored technical questions on top of the questionnaire itself and references to just get onto the tender shortlist
  • A tender to follow with over 20 quality questions including a mobilisation plan, process flow charts, and complex pricing
  • A 200-page specification document that includes full IT interfacing.

The way such a tender process is designed makes it more aligned to a contract worth ten plus times the actual annual value.

If you consider a typical SME thinking about a return on investment (i.e. the amount of resource needed for responding to the tender versus slim operating margin required for a competitive price) then it’s no wonder we have seen lots of our clients walk away from seemingly good opportunities because it’s just not worth the effort and cost of bidding. Indeed, one of the most frustrating things is that many of these local/regional companies who are likely to be put-off from bidding would actually deliver a very good service with the contract being an excellent fit for them.

There should be some basic common sense applied when putting tenders out which makes the process robust and compliant with good quality specifications and sufficient detail but at the same time accessible and attractive so bidding for SMEs remains feasible. There could be guidance introduced which enables lower value contracts of less than £0.5m to follow an open tender process or at least just a standard SQ with financial checks and references to confirm suitability without the need for additional scored questions.

There are lots of difficult questions that procurers need to ask themselves but all we ask is for a degree of common sense to be applied! If the public sector genuinely wants to open up bidding for SMEs, then procurers must make the process and response requirements fair and proportionate to the value of the end contract.

This is even more relevant in the new Covid-19 world in which we live where many SMEs are simply fighting for survival with one eye on the future with depleted or over-stretched resources. Tendering and winning public sector contracts is undoubtedly one way to help SMEs to build for the future but only if they can find a way to bid in the first place.

Do you need support managing a bid? We have flexible ways of work to suit any SME budget including our SME scholarship for a new SME client to get two free days of bid support – get in touch today to find out more.

 

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