After the demise of Carillion, field service businesses are wary of public contracts. But now may actually be a better time than ever to tender for a contract: In 2015, the government committed to spending £11.4 billion—about 25% of its budget—with SMEs, increasing it to 33% by 2022. Not only that, but the government simplified the process for contracts under £100,000, so you now have a little less paperwork to wade through.
In other words, there's big money to be made from public contracts, if you jump on at the right time and prepare a stellar bid. And of course, while they're harder to find, private sector contracts can also be profitable opportunities.
Bidding for repair and maintenance contracts can be time-consuming and confusing, especially to small field service business that have never done it before, so we've created a four-part series that will walk you through the process.
In this first post we'll talk about the basics, and how to decide whether a contract is right for you. Also be sure to download our free Tender Writing Checklist to help you with the writing process.
Should I tender for a contract?
Here's how to know if you're ready to tender for a contract, and whether a contract is worth bidding on.
- Determine your readiness to tender for a contract. Are your tech tools, systems, and certifications up to date? Do you have the resources to compile the data and write a winning bid? Do you understand tender terminology? If not, either find a fix or hold off on tendering for contracts until you're ready.
- Search for contracts that look promising. Check your local authority website, certifying bodies for your field, and the UK government's Contract Finder site, and sign up for emailed tender notifications.
- Review the buyer and the contract. Make sure the client has no legal, financial, or ethical problems, that the terms of the contract and the project are fair and reasonable, and that you meet all the buyer’s requirements.
Now let's talk details.
1. Determine your readiness to tender for a contract.
Tendering for a contract you have little chance of winning is a huge waste of time, energy, and money. Ask yourself these questions; if you answer "No" to any of them, you'll want to either find a fix or hold off on tendering for contracts until you're ready.
Does our business have the right systems and processes?
If you're still keeping customer notes on scraps of paper, you have no way of tracking your engineers, and you can't reliably schedule the right engineer for the right job, you may have trouble keeping up with the demands of a large contract. Whatever your excuse is for not investing in the right technology for your business, it won't fly for clients that have dozens of units, appliances, or pieces of equipment that need service and repair.
Also, ‘You need to have written policies and procedures,’ says Williams, on everything from health and safety to HR. ‘And it’s not just having them, but understanding how they’re disseminated to staff, and the feedback loop. All of this will be in the pre-qualification questionnaire.’
Do we have the resources to do big jobs?
Beyond technology, you'll need to have enough engineers, office staff, and service vans to handle the job...proper employee procedures and training...and systems for tracking, invoicing, and so on.
Is our branding up to snuff?
If you’re going for private sector contracts, make sure you know what your Unique Selling Proposition is, and make sure it's expressed throughout your branding. Buyers want to know what makes you different from (and better than) the competition. ‘In private sector contracts, you might have ability to put graphic design into it and make an eye catching document,’ says David Williams, Director of Purple Patch Marketing Consultants in Essex. ‘I've seen some wacky approaches to sending a tender.’
Public tenders, in contrast, tend to be formulaic online portals. ‘In public sector contracts, which is the vast majority, brand has no value,’ says Tony McKelvie, a Director at Tenders-UK in Leicestershire.
Do we have the resources to compile and write up a professional bid?
Writing a tender is no easy feat. Later in this series we'll talk about what to put in your tender and how to organise and write the document, but in short you'll need access to all your key business data, and someone on staff who can do research and compile the information into a well-written tender. (You can also hire out the process, which requires a different kind of resource: Money.)
Do we understand tender terminology?
PQQs, RFPs, ITTs, SSQs...if these looks like random acronyms to you, you'll need to get a handle on the lingo of contracts before you start tendering.
This article in the Daily Mail described the different types of tendering procedures, from open to competitive, and this Understanding of the Language of Procurement video can help you with other tender-related terms.
Still not sure if you're ready? Propeller Studios offers a free, thorough pre-qualification assessment form to help you figure out your chances of winning a contract.
Do we have any certifications or accreditations?
Of course you’ll need to have whatever accreditations the buyer is requiring in their pre-qualification criteria; later we’ll talk about how to know if a contract is right for you. In the meantime, ‘Everything we do to give more value to the commissioner increases the possibility of the win,’ says McKelvie. ‘Certifications, accreditations, and ISO standards are helpful. But unless the commissioner has specified a particular accreditation or standard, it's not a pass/fail marker.’
So what certifications should you have? ‘Look at the accreditations of your competitors on their websites,’ McKelvie suggests. ‘That gives you an idea of where you are in terms of the competition, and the probability that you're a stronger or weaker prospect in terms of the win.’
2. Search for contracts that look promising.
Got everything in place to start tendering for service and repair contracts? Then it's time to start looking for opportunities.
The quickest and easiest first step is to check the UK government's Contracts Finder, which lets you search for contracts by keyword and region. For each opportunity you'll learn the value of the contract, the start and end date of the contract, the opening and closing date for tenders, and whether the opportunity is suitable for SMEs.
Next, look for local tenders through your local authorities' websites, and specialist tenders through industry groups and certifying bodies for your field.
To make sure you don't miss any opportunities, try signing up for tender alerts through a system like Tracker Intelligence (which offers a free three-day trial) or B2B Quote (which is free for a certain number of features). These services offer alerts on both public and private sector tenders.
Finally, depending on your location, consider attending a Procurex Live event. According to their website, 'Procurex Live events are dedicated to supporting the delivery of public services by providing anyone buying for or supplying to the public sector with training, networking and collaboration opportunities in this multi-billion pound marketplace.'
3. Review the buyer and the contract.
Once you've found an opportunity that looks like a fit, check out the contract and the buyer to be sure you're not missing any important details...and that the buyer is someone you'd like to work with. After all, you'll be working very closely with them for a long time.
Here are the questions to ask yourself as you do your review.
Does our business fit the requirements?
You find a contract that seems perfect: You can do the job! Your systems and branding are all set! But don't get to work on a contract without first making sure you can comply with the rules set out by the buyer.
'At the very least companies have to have been trading for at least three years, and in most cases there is a minimum turnover requirement that must be met,' according to an article in Executive Compass. 'Other compliance areas may include policies and procedures, accreditations or previous contract experience.'
As for turnover, ‘[Buyers] have all sorts of measures, but often they will not want the contract to make up more than 20-25% of your turnover,’ says Williams. ‘It's reducing their risk; they want to make sure you’re financially stable enough to deliver for the term of the contract.’
Does the client have any legal, financial, or ethical issues?
There's a lot of money on the line when you land a big contract, so you'll want to make sure the buyer has a record of fair and ethical dealings. Do a web search, look at reviews, and ask in industry forums whether other businesses have had difficulties with the client.
Also check out the government's Companies House service, which lets you check a company's former business names, insolvency information, and more.
Are the project guidelines and deadlines clear and reasonable?
If a buyer's requirements look unreasonable now, imagine how they'll look when you're actually working on the project. Don’t overstretch—be honest with yourself about how much work you can do, and how quickly you can do it.
Is price the key factor in awarding the contract?
Competing to be the low-price leader in your field is asking for trouble. Buyers that value low prices above all may be difficult to work with, and a too-narrow profit margin can lead to financial problems for your business.
For more help deciding whether to tender for a contract, check out Propeller Studios' free bid/no bid checklist.
4. Keep it all organised.
We created this free downloadable Tender Writing Checklist to help ensure you have everything you need in place—and to help you win the contract.