Seeking government contracts is hardly a new strategy, and many of the larger players have been successfully competing for such work for years. However, for new or small players the message is clear: tenders require a lot of effort, and if you're not serious, don't bother.
There is no doubt that the government tender process is not structured to favour new entries. It is onerous in terms of the compliance requirements - the work involved in putting together a serious response is significant and the competition is fierce. Nevertheless, the rewards can be considerable and there are a number of strategies that can help you get ahead of the pack.
Firstly, do a serious opportunity analysis. Responding to any tender will be a time-consuming business and like all business development activity it should be considered in light of the expenses and chances of success. Having committed yourself to the work, the best approach is to maximise your chance of winning and to do so you should realistically consider the following key factors.
How many vendors have registered to respond to the tender?
Although this information may not be available, it is worth asking the contract officer as they will often tell you. You may be surprised to find that many tenders have over 100 vendors responding. In this scenario, all being equal, your chances are very low and you may decide to invest your energies elsewhere.
Who are the other vendors?
Again, you might be surprised to find this information is available if you just ask. Any competitive intelligence is handy and tenders are no exception. If you know who you are up against you can evaluate your chances of success and perhaps tailor your response to differentiate yourself from the other players. On occasion, it may be a good strategy to even approach the other vendors to form a consortium with a greater winning chance.
How well does your service or product set fit the tender requirements?
If your offering is a good fit, your win chances are much improved. If not, consider forming a consortium with other vendors who might provide complementary skills or products. A bid from a consortium will almost always be looked upon more favourably by government as it is perceived to provide a greater diversity of skills in addition to spreading the project and financial risk. An important by-product of this point is that if you are competing in a non-core market for your business, you probably won't be competitive on price.
Can you demonstrate your expertise in delivering similar projects?
For government a key factor in the tender process is choosing a low-risk vendor. To that end you must be able to demonstrate your expertise with real project case studies. If you are light-on for expertise, you will struggle to compete.
Do you have the financial and organisational scale to deliver a project of this size?
You must be able to demonstrate that you are financially and organisationally large enough to deliver the project. For a significant project (over $250K) you may even be asked to provide a financial guarantee. Often, gaining certified government supplier status will alleviate this requirement. Again, for small players this can be a significant hurdle, but one that can be overcome by partnering with larger consortium partners.
What differentiation can you create?
When you are competing against a large field of potential vendors, your ability to differentiate becomes all-important. You should think long and hard about how you can position yourself or your products and services so that you stand out from the pack. Again, by partnering with another organisation, you may be able to create a unique synergy that sets you apart.
Do sub-contractors have better chances?
Sometimes it makes more sense to look for larger organisations to partner with. Typically, if a large, well-known vendor takes the prime position in a consortium, government agencies will feel more comfortable that the financial organisational risk is reduced. Nobody gets sacked for hiring IBM as they say! However, there is also a broad belief among government agencies that small vendors are more nimble and better value.
Assuming that you can address these issues, it is important that you allow sufficient time to respond to the tender. In much the same way as a résumé is the first introduction for a job candidate, a tender response will be seen as a reflection of your organisation. Your response must reflect the same level of professionalism, quality, completeness and attention to detail that your project work does.
Sometimes there is a perception that tender outcomes are a foregone conclusion, with the work guaranteed to an incumbent or pre-determined vendor. This may be a possibility: watch for vendors with products or services that match the tender criteria very closely - this may indicate a vendor bias. Another possibility is that the tender itself indicates that the incumbent is not providing the required level of support or service. Either way, probity dictates that government agencies will never admit to any vendor bias.
Always ask as many questions as possible. Ask if there is a budget allocated to the project. Do not be afraid to step over the mark, it is not your job to keep the playing field level. The bottom line is this: do what it takes to improve your chances of winning, while still maintaining a profitable contract.
Michael Chanter is a director of Bullseye Internet Solutions (www.bullseye.com.au), a systems integrator specialising in large-scale Web-based software integration projects.