Tendering a competitive edge

By Malcolm Abernethy

Executive Officer, NZ Contractors' Federation

Competition in the tender market is fierce with contracts hard to win, making it more important than ever to plan tender bids and to present them in the most competitive way possible.

Tender bid documentation must be complete, comply with the Request for Price requirements addressing the particular contract being tendered for, and detail exactly why your bid should be accepted. Tender bids should be project specific presenting a case that convinces the client that your company is compliant, competent and the best for the contract.

When writing non-price attributes the definitions need to be followed closely. Each non-price attribute is considered below based on New Zealand Transport Agency’s procurement manual.

‘Track record’ is the contractor’s record of delivering projects to the quality standards required; on time and within budget. Track record does not have to be demonstrated in delivering the types of project being tendered for, but is simply about the reputation of the supplier for delivering quality projects on time and within budget.

‘Relevant experience’ is the contracting company’s previous experience in technical areas relevant to the project being tendered for. The client wants to ensure the contractor has successfully constructed similar projects in the past.

‘Relevant skills’ is the competence of the personnel that the contractor proposes to use, with regard to their skills and experience in areas relevant to the project This attribute may be split into technical skills and management skills depending upon the complexity of the project.

‘Methodology’ focuses on the project being constructed and how the contractor proposes to construct the works. Methodology can significantly influence a project’s quality, including its whole-of-life cost and the time taken for construction. Clients look for innovation and possible savings when reviewing methodology, and where new techniques and materials are proposed, the client will assess the quality and whole of life cost to the project.

‘Resources’ are the list of equipment, including facilities and intellectual property, that the contractor proposes to use on the project. While it is important to know what support resources are available, the client is interested in the resources that will be dedicated to the project – not just the plant register of the company.

‘Financial viability’ is the contractor’s ability to access the financial resources required to deliver the project and to remain viable through the contract period. A financial viability review will concentrate on the strength of the contractor’s balance sheet, profitability and liquidity of the contractor, debt to equity ratio and the ability of the contractor to provide a bond if required.

Significant investment of time and cost goes into tender document preparation but there is a risk. Risk can be minimised by reducing mistakes. Mistakes in competitive tendering shouldn’t happen – they’re dangerous and they lower morale within the contracting company.

Consider using a technical writer to assist in putting bid documentation together. A technical writer can assist in developing a competitive tender strategy, upgrade and polish a contractor’s documentation to ensure all tender submissions are top quality

Winning bids help recover the costs of tender preparation. The New Zealand Contractors’ Federation can assist by referring contractors to a technical writer.