Tendering Definition and How The Tender Process Works

Public sector bids and tenders can be complex, time-consuming and highly competitive. There are a series of documents which must be completed accurately, and contracts are typically won and lost over a handful of marks. However, without tendering for contracts you will be unable to effectively grow your portfolio of public sector contracts and client base.

We look at the definition of tendering in addition to how the process unfolds, including advantages of tendering to the buyer, the evaluation process and common quality questions buyers can expect to encounter.

What is tendering?

Tendering is a process where local or central government authorities need to procure a good or service, and market a contract notice in the form of tender. Bidder organisations are required to submit a tender (often called ITT, bid or proposal), offering their total price on the contract and responding to quality questions.

For instance, if Newcastle City Council require a contractor for reroofing of a primary school, they will issue a request for tender (RFT) or invitation to tender (ITT) document. Typically, bidders will have between four and six weeks to respond in line with the tender guidance.

Common tendering industries

The tendering process is used to appoint suitable providers and suppliers in a number of industries, including:

• Health and social care services such as domiciliary care, reablement, supported living and supported accommodation, and extra care schemes
• Construction sectors, including civil engineering, design and build contracts, minor works and adaptations and highways
• Facilities management inclusive of hard FM such as heating and plumbing and electrical works as well as soft FM services like cleaning, security and grounds maintenance
• Professional services such as recruitment, architecture, education, interpretation and translation services, and IT solutions or data management.

Central and local governments have targets in place to do business with small- and medium-sized businesses, with the central government setting a target that £1 of every £3 spent in procurement budget allocated to SMEs.

The advantages of tendering for the buyer

In addition to being a fair, open and transparent procurement process, there are a number of advantages to tendering for the contracting authority or buyer organisation (i.e. the one procuring the good or service).

• Establishing minimum competency and experience: As part of a bid, the buyer normally sets mandatory minimum criteria in order to be eligible to tender. This includes insurance levels, contract examples or case studies of a similar size and scope, and industry-specific accreditations, such as NICEIC for electrical works.
• Encouraging competitive offers: Bidders will be aware that they are one of many tendering for a contract. In addition to offering competitive prices, prospective suppliers will also have to ensure the added value and value for money they will provide as part of the contract will stand up to scrutiny during the evaluation process.
• Objective and transparent evaluation: Due to the clear evaluation criteria published in the tender documents, evaluation is more objective and transparent than simply awarding a supplier a contract. Formal outcome letters from the authority will also give feedback explaining the strengths and weaknesses to each responses, enabling you to continuously improve tendering outcomes.

Buyers also have the benefit of post-bid activities, including supplier presentations, Q&A sessions and post-bid clarification questions, all of which support an informed and diligent contract award.

Evaluation criteria and process for tendering

Each tender will publish a breakdown within the invitation to tender (ITT) document detailing how marks are assigned against each element of the tender. Typically, this is a quality-price split, with the pricing element only constituting between 30% to 60% of the total marks.

The rest of the bid will be evaluated on a series of forward-facing quality questions, structured around different topics of how you plan to deliver the tendered works or services. Tender responses are evaluated strictly in accordance with the wording of the question, detail and comprehensiveness, and relevance or specificity to the particular contract.

When tendering for health and social care contracts in particular, it is not unusual to see a large split in favour of the quality element of the submission. In some instances, health and social care tenders may be evaluated 100% on quality, with pricing already at a fixed hourly or ‘per visit’ rate.

Lastly, the Public Services (Social Value) Act 2012 requires contracting authorities to consider economic, social and environmental wellbeing when procuring contracts. Consequently, all bidders are evaluated on their social value commitments and initiatives, which can constitute up to 30% of the total weighting for tendering evaluations. Local government authorities often identify their preferred social value initiatives – for example, hiring local employees, volunteering or in-kind contributions to community projects, and enhancing local green spaces.

Common tendering topics

The size and scope of each tender varies greatly. While some bids, such as mini-competitions from a dynamic purchasing system (DPS), can be as little as 1,000 words, others can be more than 20-25,000 words – particularly for complex, specialist contracts.

Nevertheless, there are a number of key themes and topics which are normally included within the quality question set, regardless of the industry or sector:

• Mobilisation and implementation: It is critical to ensure you will be ready for full delivery of the contract from day one. Typically, there will be a period of a few months from contract award to the ‘go live’ date. Responses around mobilisation and implementation may include potential risks to mobilisation and corresponding mitigation measures, in addition to how bidders will manage the implementation period – i.e. the first few months of service or works delivery.
• Contract or project management: Suppliers should be prepared to assign a dedicated point of contact – such as a contract manager or similar – to handle and oversee day-to-day performance of the contract. Additional oversight such as site or scheme supervisors will also enhance oversight and can provide practical or technical advice to frontline or on-site staff.
• Ensuring quality in delivery: Contracting authorities are likely to focus on how quality assurance measures will ensure ‘right first time’ delivery of works or services. Within this question, the authority may request further information on procuring quality parts or materials, works-in-progress quality assurance checks and inspections, and post-work audits to ensure compliance.
• Staffing and resourcing: Suitably trained, qualified and experienced staff are crucial to providing high-quality works or services. In addition to emphasising the suitability of personnel, the evaluator may also ask specific challenges to resourcing the contract and how you will overcome these – for instance, ensuring sufficient resources to rural sites or locations.
• Social value: as per the previous section, social value has rapidly become an indispensable part of the tender process. In addition to outlining clear, quantifiable commitments, a strong social value response will include proposals for measuring, monitoring and reporting progress against commitments over the contract term, increasing oversight.

The above are just examples, and the priority areas of the authority may lead them to assign different quality questions and topics – for instance, environment and sustainability, providing value for money, and scenario-based questions.

Our bid and tender services

As an approved partner of procurement organisation NEPO and their Supplier Partnership Programme, we deliver a series of bid writing masterclasses and other sessions to enable small and large businesses alike to develop their knowledge and understanding of the tendering process.

As a next step, our bid training and bid writing courses are aimed at upskilling your internal delegates, enhancing their tendering knowledge and gaining more marks in quality responses.

Depending on your needs, the size of the submission and your organisational tendering experience, Executive Compass also offer the following:

• Bid writing services and support, where one of our expert bid and tender writers takes the quality return document off your hands and provide high-scoring, competitive responses
• Bid review service, where one of our quality manager or senior bid writers reviews responses produced by your in-house bid team or subject matter experts, with comments for enhancements and improvements returned for you to implement
• Total bid management support, where our bid writer drafts quality responses, manages the portal and uploads documents on your behalf, reducing your administrative burden

If you require support with a tender submission or would like to have a further discussion around the above bid services we provide, our sales and marketing team are available to speak more at info@executivecompass.co.uk or via telephone at 0800 612 5563.