Tendering

Strategies for successful tendering

Tendering is the process of choosing the best or cheapest company to supply goods or do a job by asking several companies to make offers for supplying the goods or doing the work. Tendering occurs in all parts of business but is most common with government projects, construction, utilities, and infrastructure.

Governments are heavily into tendering out their projects as this ensures that the awarding of contracts is fair and free from bribery and nepotism and that no parties have the unfair advantage of separate, prior, closed-door negotiations for the contract.

Tendering, and winning the contract, is attractive for companies as contracts put out for tender are normally large and they provide reliable work and income for the winner for many years. For example, tendering for the National Broadband Network rollout will involve over $30 billion over a 15-year period. Winning a large tender can be a ‘company maker’.

The strategies to ensure a successful tender are:

  • Determine whether you actually have the capabilities and capacity.
  • Only tender for the right opportunities for your company.
  • Register your interest and note the key requirements.
  • Understand the tendered scope.
  • Understand the pricing and your margins and break-even point.
  • Understand tender evaluation criteria.
  • Understand the contract terms and conditions.
  • Ensure the tender submitted is complete.

Gaining work through tendering does have costs though. The first one is the massive amount of time and money involved in preparing the tendering documents. The second one is the risk of under quoting and losing money on the project.