BD tips and insights

5 more tender trends for the 2020s

As the first year of the 2020s approaches its conclusion against the backdrop of the COVID-19 pandemic; JMA has pinpointed 5 more tender trends your business should not only be aware of, but be ready for.

TENDER TRENDS #1: SUBMITTING & THEN ‘PITCHING’ YOUR BID ON THE SAME DAY

JMA recently supported a client in a bid where the ‘beauty parade’ element happened on the same day as submitting the written bid response. Yikes!

This particular procurement and evaluation process (run in early 2020 i.e. pre-pandemic) required tenderers to submit their bid response documents in both hard and soft copy formats and then front up to the tendering organisation’s premises later that same day to ‘present’ in person a summary of their bid and solution within a strict time limit.

While the extra pressure of submitting written documents while simultaneously preparing a ‘winning’ presentation added an extra overlay of difficulty (especially 48 hours prior to submission) in this case the presenters were also the primary ‘authors’ of the bid solution which meant they were fully on top of the detail and able to take questions from the floor.

Another recent government bid saw RFTs submitted on a Friday with ‘shortlisting interviews’ commencing the following Tuesday morning. In this case our client was ‘ready’ as they had carefully noted the potential for interviews relatively ‘early’ in the evaluation process and ensured key team members were ‘ready’ to pitch their solution while it was fresh.

⇒ Factor this tender trend into your bid readiness

Careful bid strategy (formulated in advance, not on the fly), an up-to-date bid content library, strong bid management and professional bid document and presentation templates are a must to ensure compelling and professionally presented messages appear on paper, on screen and onsite ‘in the room’ with evaluators.

If you are looking to invest in some bid ‘readiness’ so you can compete in tightly timed competitions a good rule of thumb is to regard, a good bid content library and ‘fool proof’ templates can take your bid draft to around 70% complete (and quickly); leaving only 30%  heavy lifting (customisation and tailoring) to be done for each opportunity.

For your client facing team members if they are not from a sales or marketing background it may make sense to invest in some presentation skills training and factor in time for some ‘dress rehearsals’.

If confronted with this scenario your ‘hard stop’ needs to be at least 48 hours out to allow for any printing and binding of the bid (if a hard copy submission) and for a dry run of your pitch presentation.

In many sectors this reflects wider trend to faster and more truncated buying and selling processes and decisionmaking driven in the last decade by digital and automation and now accelerating due to COVID-19.

TENDER TRENDS #2: ‘PAY TO PLAY’ PANEL APPOINTMENTS – ONGOING PROVIDER FEES

Similar to ‘merchant fees’ borne by retailers offering electronic debt and credit card transactions many providers are now required to pay ongoing ‘fees’ as part of their panel appointments.

Many government departments, agencies, and authorities along with some universities and not-for-profits are outsourcing panel ‘management’ to ‘vendor panel’ outfits. This means after ‘winning’ a place on a panel providers (or ‘vendors’) essentially need to ‘pay’ ongoing fees to continue to participate in the panel.

For instance, the Queensland originated Local Buy organisation:

‘operates by applying a contract management fee, which is charged to suppliers every quarter as a percentage of their revenue generated from local government business through the relevant Local Buy contract’.

With Local Buy suppliers are also up for an ‘annual administration fee’ applicable per contract.

Running procurement processes and then administering ‘panel arrangements’ for ongoing streams of work to external providers can be costly in time, money and human resource. Organisations are looking to either 100% offset or partly share those panel management costs by requiring suppliers to pay ‘administration’, ‘contract’ or ‘management’ fees.

⇒ Factor this tender trend into your bid readiness

If winning and then working with government clients is important to your business be prepared to budget these fees into your operating expenses and management accounting for the duration of your appointment. In 2020 this is now another ‘cost’ of doing business and make sure you truly understand the ‘size of the prize’ prior to bidding.

TENDER TRENDS #3: SOCIAL ‘PROOF’ – ASKING FOR LINKS TO YOUR TEAM’S LINKEDIN PROFILES

JMA first observed this requirement back in 2017; since then more and more RFx documents require not just professional biographies but live links to individual team members’ LinkedIn profiles.

I suspect there are perhaps a couple of reasons for this trend.

Firstly evaluators are using LinkedIn to see if you are who you say you are to the ‘wider’ world.

That is – is team member X really an expert in Y? And does their publicly available LinkedIn profile reflect and support the claims of this bid? Or, has X been ‘dressed up’ as an expert in Y for this occasion and their real expertise lies elsewhere? If there’s too big a gulf between your publicly available LinkedIn profile and what you claim in your bid you may not be viewed as favourably as other providers whose story better ‘adds up’.

The second reason we suspect bids may request LinkedIn links is to ‘see who knows who’.

The importance to evaluators of your network relationships and connections may depend on your sector or industry and your client’s sector or industry. For example in one bid called by a large general insurer the insurer was keen to see which ‘intermediaries’ (i.e. insurance brokers) bidders were already connected with online at least. It may also be a way for tendering organisations to assess which of their competitors your business may already be serving.

⇒ Factor this tender trend into your bid readiness

Whatever the reason it doesn’t hurt as part of your bid readiness preparations to review key each featured team members’ online presence (at a minimum as featured on your own website and also of course on LinkedIn) and then to make any necessary ‘tweaks’ to ensure evaluators and prospective clients will like what they find BEFORE you submit your bid.

See JMA’s blog on why you need a good LinkedIn profile, and where to start.

TENDER TRENDS #4: REVERSE AUCTIONS & ‘A RACE TO THE BOTTOM’ ON PRICE

As many organisations come under increasing COVID-19 driven pressure to hold or cut costs JMA has observed online time-limited ‘reverse auctions’ for service providers are on the rise as a way to reduce the size of provider panels.

Sometimes also known as ‘Dutch auctions’ reverse auctions are already fairly commonplace in North American procurement and they have increasing crept into the Australasian market.

A small example from the professional services world of a reverse auction was with a global insurer who advised shortlisted firms:

“You are the last 10 firms standing.

We wish to reduce the panel to 4.

Price is the determining factor. 

We will now start a public reverse auction where you can openly bid to reduce your charge out rates.”

As the bids came in and the rates kept lowering, more and more firms dropped out until there were 4 firms left.

Panel chosen.

In lieu of a ‘reverse auction’ we have also observed drawn out and repeated rounds of Best and Final Offers (BAFOs) during tender processes; the most back and forth we have seen this year was five (yes five!) rounds of meetings and submissions to achieve the ‘final’ negotiated contracted pricing regime.

⇒ Factor this tender trend into your bid readiness

While at face value for procurement (who may be out to ‘cut’ costs) a reverse auction is a ‘neat’ mechanism, it doesn’t usually allow for qualifications or assumptions to be covered let alone value to be demonstrated in a meaningful way. Hopefully the rest of your bid response demonstrates the value and return on investment your business offers so a ‘number in a box’ won’t cost you the work.

As to participating in a reverse auction itself, be careful that you understand what is really ‘in scope’ and what the client’s expectations are for that ‘price’.

Just like any auction you need to work out your limit – i.e. work out the lowest you can go to profitability-wise and stick to that. Don’t get swept up into ‘a win at all costs’ approach as you may repent at leisure the deal you have struck, and be stuck with it for years to come.

Think hard about whether you can avoid joining the ‘race to the bottom’ and if this is a client your business really wants to keep at any cost. There may be valid business case to run with a client as a ‘loss leader’ for example to ‘break even’ and retain a team until more profitable opportunities arise in your area.

Or is there a way you can present an alternative tender or pricing proposal to your client while still submitting a fully compliant bid? Also check out JMA’s blog on pricing strategy.

TENDER TRENDS #5: YET MORE CORPORATE SOCIAL RESPONSIBILITY ‘PROOFS’

In 2020 it is no longer enough to ‘say’ your business has a position or policy. Recent bids in Australia have called for documented proof of various workplace and CSR policies.

In a recent bid a large, global organisation called for accreditations in not only quality (which is a fairly standard requirement) but that providers were also accredited to ISO 27001 (Information Security Management System) and accredited to Australian Standard 14001 (Environmental Management Systems).

Thankfully in this case the RFP did allow bidders to provide evidence of ‘Alternative Supporting Documents’ as it is currently not commonplace for providers in this sector to have taken then steps towards formal certification in the areas of data security or environmental management.

This particular bid also sought evidence of bidders’ ‘Climate Change Statement’ and several questions about ‘action’ taken to increase diversity in their businesses including for women, Indigenous Australians and other minorities and evidence of risk management for ‘ESG risks’ (i.e. risks in the areas of Environment, Social and Governance)

⇒ Factor this tender trend into your bid readiness

We have often blogged before about how getting policies and procedures documented for your business in advance of competitions can provide a competitive advantage.

A further 2020s ‘cost’ of doing business to recognise and address is to know it is not enough now to just ‘say’ you have a policy; you need to show and not just ‘tell’ prospective clients that your business is in tune with the standards and values of organisations you wish to serve.

For more background on recent and emerging tender trends also see JMA’s 14 Tender, bid and proposals trends that are here to stay.

And if your business would like to factor in these tender trends into your preparations or assess your bid readiness
why not talk to us about how you can best prepare for these tender trends and be ready for more wins more often?