During the (almost) twenty years of Gold Leaf’s existence, we have worked on many tenders. Sometimes we have been sitting on one side of the table; sometimes on the other. We have helped clients prepare Invitations to Tender [ITTs] and assess the eventual results they’ve received; we have advised at tender “beauty contests” (i.e., formal presentations requested of shortlisted applicants); we have attended the latter on behalf of the clients making the bid; and on occasions we have bid ourselves. We therefore hope that these notes, which are born of considerable experience and have been triggered both by a recent, particularly poorly-conceived tendering process in which we invited to participate and in anticipation of helping a new client to prepare an ITT, will be useful to our readers.
People sometimes ask what the difference is between an ITT and a Request for Proposal [RFP]. The two terms are often used interchangeably; but an RFP can be more informal in approach than an ITT, which usually involves a formal invitation to participate, results in multiple responses and culminates in the award of a legally-binding contract to the successful applicant. An RFP may be a simple request to an existing supplier to set out the methodology, costs and fees for a project that has already been offered to them, without reference to other suppliers. This article will focus on ITTs; and on best practice (“etiquette”), rather than providing a step-by-step “how to” guide for constructing the ITT document (much excellent advice may be found online for those seeking such guidelines).
Prior to designing an ITT, the first step to take is to consider carefully whether it is necessary at all; and if the answer to this is ‘yes’, whether it should be an open or closed ITT. If you are considering designing an ITT for the second part of a project which a favoured supplier has already completed successfully, and you and the supplier are both happy for them to continue with Part 2, you do not need to put the second part of the project out to tender unless not doing so means a contravention of the public procurement policy in your country (the UK rules are set out clearly on the GOV.UK website here, but will almost certainly change after Brexit) or goes against the rules of your own company or organisation. If you are obliged by such a policy or rules to go out to tender, you owe it to your less-preferred suppliers both to take up as little of their time post-bid as possible and to keep an open enough mind to consider their bids with professional seriousness: the excellence of one of them may, after all, surprise you!
If you genuinely want to devise a tender, to discover what is ‘out there’, whether it should be open or closed depends on how specialised is the work required. If your organisation operates in a sector that requires of the supplier prior specialist knowledge and experience – e.g., of practical application of the Arts – or specified technical competence – e.g., being able to provide a technological solution with certain non-negotiable features – a closed tender is not only your best but probably the only responsible option for you to take. This will involve sending the ITT to a selection (typically 4 – 6) of potential suppliers, each of whom you believe is capable of fulfilling the requirements. If the project requires creative thinking or the deployment of transferrable skills, or you think that a new approach from those taken for previous, similar projects might be desirable, an open tender might work better. Do be aware, however, that assessing open tenders is much more time consuming than assessing closed tenders (as you are likely to get many more responses, and, it has to be said, much more “dross”, which will still need to be dealt with scrupulously and courteously). The construction of open tenders also requires more care, as respondents, even if they are capable of delivering excellent results and therefore worth considering, won’t necessarily be on the same wavelength as you are at the beginning of the process.
All bids should be acknowledged upon receipt and read carefully and appraised according to a set of criteria, which in the case of an open bid should include assessment of transferrable skills and creativity. If a “beauty contest” is planned – and at Gold Leaf we would encourage this if there are at least two promising candidates – only bidders who are genuinely still being considered for the project should be called to interview. It should go without saying that this is because the ITT process involves a duty of care on both sides: the applicant owes it to the originator of the ITT to give it and any follow-up work his or her “best shot”; and the originator owes it to the applicant not to waste his or her time and money on completing extra tasks, such as presentations and business modelling and undertaking the expense of travelling to a meeting, if there is little prospect of their winning the bid. Most emphatically, the originator of the ITT should not abuse their position of power by involving “secondary” candidates in extra work merely in order to benchmark their preferred candidate. It cannot be emphasised enough that a formal interview that requires extra work and whose end result is a legally-binding contract for the successful candidate cannot be downplayed as a “little chat”.
Finally, once the successful candidate has been offered the project and accepted it, unsuccessful candidates should be contacted as soon as possible. If the ITT was open and there were many respondents, it isn’t necessary to give all of them detailed feedback; a courteous thank-you and explanation that you were impressed by the many excellent applications received will suffice. However, if the ITT was closed, all the unsuccessful applicants deserve a full explanation of why their bid was not chosen; as do all those called to interview in an open bid.
Much of the above, of course, simply requires a mixture of professionalism, good sense and courtesy.
If you are considering going out to tender and would like assistance with any part of the process, from deciding which type of tender you need to the design of an ITT to help with assessing the resulting candidates (including the “beauty contest”), Gold Leaf will be happy to help.