Many small business owners seem to be unaware that a rich vein of business opportunity lies just under the surface of the Australian economy: Government tenders.
When you combine federal, state and local government tenders, they represent an estimated $100+ billion market. Winning a good Government tender can provide a steady supply of revenue; revenue that can sustain your business and help fund growth for years.
The reason these business opportunities often go untapped is that the thought to chasing Government contracts can seem just too hard for busy business owners who are turned off by the perception of excessive red tape, bureaucratic hurdles, complexity, and long lead times. To overcome this, you need to be armed with special tools which will give you the competitive edge to break through into this lucrative market.
But before bidding for a tender that has just dropped into their inbox, SMBs might want to check if their tools are up to the job. To do this, you can develop an easy to follow six-point checklist which will help you find out whether you have what it takes to win. While not a complete list of everything the Tender Evaluation Panel (TEP) looks for, the following checklist covers most of the key elements evaluators consider.
SMBs could treat each of the checklist items as a question and score themselves out of 10, where zero is non-existent and 10 is fully developed. The scoring needs to be brutally honesty because that’s how the TEP will be when assessing tenders – brutal.
1. Written methodologies
The majority of companies bidding for Government tenders could do the job, if they won the tender. The trouble is they don’t tell the story of how they will do the job well enough. In simple terms this is your methodology and the tender documents will always ask for a description of it. The request might be more or less obvious, but it will always be there. Can you meet it? If you can, then mark yourself towards the high end of the scale; if not, then be honest and chose a score at the opposite end.
2. Reference projects
Government departments will always want to know where you have done similar projects for other clients that are just like them. If these other clients are Government departments, then all the better. Have you got a series of case studies of up to one page that show what the client’s problem was and what you delivered to solve it? If you have, you might warrant a score somewhere above seven. But if you are like lots of other businesses and just have a list of past clients with a one-line project description and a contact name, then mark yourself below three.
3. Staff, facilities, equipment and key human resource procedures
Have you got a description of your key staff that shows their qualifications, skills and relevant experience? How will you replace them if they get sick? Is there a written description of your office facilities, plant and equipment? How do you recruit your staff and, more importantly, how do you make sure their skills remain current? If you have all this in place, you are well placed to demonstrate your “capacity to deliver the services”; another sure-fire question you will be asked. If you have all this, then score yourself at seven or above. If not, pick a number at the other end of the scale.
4. Project schedules
How long will it take you to deliver a typical project? Have you identified the key tasks and developed these into a sample project schedule that will make the Tender Evaluation Panel feel confident that you will deliver the project on time? If you have such a schedule, mark yourself as a six; if you have a series of sample projects, consider giving yourself a score above seven. However, if the only place this information lives is in your head, then a score of two or less sounds like an accurate assessment.
5. Account management model
Have you thought about how you will manage your relationship with the department if you win the tender? You can rest assured the TEP will be thinking about this. They will also be looking for a written description of your account management model so they can get a sense of what doing business with you will be like. Their interest comes from wanting to avoid having to butt heads with you over inaccurate invoices or missed deliverables for the coming years.
6. Response resources
Are your staff skilled in the ways of Government tenders? Can they knock out a competitive tender while still doing their day jobs or is it midnight pizzas every night for a few weeks while they juggle both jobs? This is sure fire way to burn out good management staff. If you and your team don’t have the time, then maybe you have the budget to hire in a tender-writing expert to do the job for you. Depending on the complexity of the tender and size of the project, this could range from $5,000 to $20,000 or higher. Answer yes to all these and you can mark yourself as a seven or better against this question. If you have none of them then it would be difficult to justify a score much above one or two.
Now check how you scored. If you have scored an average of six or more on all six areas, then bidding for the tender is a sound decision. If you have two or more where the score is below five, then you should seriously consider letting this tender pass by.
7. Putting it into use
Ambition, professionalism and commitment to growing a company are undoubtedly key to success in business, however even more is required to tap into Government tenders. A while ago, two small business partners in a real estate business that had been operating for around 12 months saw a Request for Tender (RFT) from Defence Housing looking to appoint property managers across Australia. They knew that if they could land the contract for their area, they would have it made for the next five years.
When the partners did the Before-You-Bid checklist, their score was below four on all but the question about staff and HR procedures. In the end, they decided to not bid for the RFT and concentrate on improving the weak areas in their tendering tools. In the process, they saved themselves consulting fees and the disappointment of having their hopes and dreams dashed prematurely. Two months later they are on their way to getting their business ready for the next RFT.
And herein lies the morale of the story – preparation pays off. The purpose of the Before-you-Bid checklist is not to turn you away from Government tenders; quite the opposite is the case. Its intent is to give businesses an insight into the tools they need to tap into that $100+ billion water main passing right past their businesses