Talking with our civil construction customers and attending industry events over the last few months, the overwhelming topic of conversation has been the slow-down in new construction markets both in the public and private sectors.
Coming off historically high levels of activity, this means that civil contractors like you need to ensure best practice is being followed in all areas of your business, including tendering.
Whether you’re feeling the pinch now or not, these tendering best practices will help you run a more profitable business.
Tip 1: You’ve got to be in it to win it.
This sounds obvious, but if you’re not systematic with finding tender and quote opportunities, it’s likely that many of them are passing you by. The channel to find tenders depends on the organisation releasing the tenders. Some of these organisations include:
- Federal, state and local government
- Utilities (eg, water, sewerage, power, gas, etc)
- Property developers
- Head construction contractors
Large Tenders
Larger tenders (typically $250K +) will normally go through a public tender process. Smaller tenders (typically below $250K typically do not need to be public, and very small jobs are often done through tender panels.
Public tenders can be found through tender aggregators (eg, Tendersearch, EstimateOne, Tenderlink, Austender and state eTendering portals) and are often listed in local newspapers.
Most of these organisations will typically advertise on their websites their tendering policies, or will provide upon request. Ensure that you are subscribed to the services that your desired customers publish tenders through to ensure that you are notified of upcoming work!
Small Tenders / Quotes
Ensuring that you are informed of smaller projects is more difficult. Depending on the size of the tender, often the tenderer is only required to source between 1 to 3 competitive bids. If they don’t choose to invite you, you likely will never even know about it.
This is where some proactivity comes into play. If you have a great relationship with the customer, are based close to them and have delivered good outcomes in the past, they may will reach out to you. If not, there are still steps you can take.
The key is to be top of mind. If you’re not currently working for an organisation that you’d like to be working for, they need to know you exist, have the necessary capabilities and are interested in working for them. A drop-by to their office or a phone call will often suffice – if you make a point of calling once a month to see what work is coming up, most organisations will tell you. This enables you to focus on these opportunities, and ensure that you get invited in the first place.
A word of warning: this only works if you do it consistently. Many contractors fall into the trap of only proactively chasing work when they’re slow and neglecting this when they are busy. The most successful contractors set aside time specifically for this task regardless of how busy they are. If you find yourself unable to sustain this, you may need to consider bringing onboard a salesperson onto your team.
If you’re organised, you can track this in a spreadsheet. You may find it helpful to use a Customer Relationship Management (CRM) software to assist you with this.
Very small jobs – panel tenders
For many civil contractors, panel tenders can be a great source of baseline work. On a panel tender, the principal can engage you on hourly rates without the effort of going through a procurement process.
Tip 2: Tender for the right jobs
Not all tenders are created equal. If you do a good job at finding opportunities you will likely have more than you can (and should) tender on, even in a slow market.
When deciding what work to tender on, consider:
- Do you think you can win at a price that would give you an acceptable margin?
- Do you have a strong track record with that organisation that increases your chances of success?
- Does it play to your capabilities?
- With limited time to prepare tenders, is it the best project you can be tendering on?
Ensuring you bid on the right jobs maximises your return on every hour spent on tendering.
Tip 3: Know the tender criteria
You can put together a great tender at a great price, but if it doesn’t line up with the tender criteria you can still lose. At a recent CCF Victoria Event, the City of Greater Geelong made that point that many of these criteria are assessed blind to the price… if you don’t meet a minimum threshold your pricing won’t even be considered, and even if considered, it’s just one of many weighted criteria.
The better you understand the criteria and the more focused your response is to the criteria, the higher your score will be. Ironically, including your extra bells and whistles can actually reduce your score if they aren’t asked for in the tender!
Tip 4: Practise good tender hygiene
It shouldn’t need to be said, but many tenders I have dealt with have had formatting issues, are submitted through the wrong channel, have spelling mistakes and generally show a lack of care and attention.
Keep your tenders simple, succinct, well presented and ensure you take the time to ensure that they show your company’s best face.
Tip 5: Follow up after the tender
This step is rarely done, and it can be one of the best investments of time you can make. Whether you win or lose, ask for feedback on your submission. Depending on the organisation and the value of the tender there may be limits on what they can tell you, but typically you can find out the winning tender value, and areas where your tender submission was weak.
If you win, it can be highly beneficial to know how much lower your bid was than competitors to ensure you’re not underpricing, and what stood out in your tender response.
This last step can help you to refine future tender responses.