Keep tenders simple with the process objective clearly in the spotlight and utilise business skills and expertise.
They are among the key principles of tendering; yet too often organisations have little idea of what the ultimate aim of the tender is, make the process too complex and fail to ask key questions, thus wasting significant time and money and, perhaps, ultimately appointing the ‘wrong’ supplier.
Nigel Trotman, a former award-winning fleet manager and now head of strategic consulting at Alphabet, says: “It’s all too easy to make a tender process far more complex than it needs to be.
When I was a fleet manager, part of my raison d’être was to avoid going out to tender if I could.
“However, a good tender document will focus on what’s important to you, your fleet operation and your organisation. Whatever process you follow, it must be appropriate to the business and the fleet being managed.”
Now responding to tenders on behalf of Alphabet, Trotman, secretary of ACFO’s Midland region, says some documents were ‘unnecessarily complex’.
“A certain amount of corporate governance box-ticking is inevitable, but the more complex the tender, the more time-consuming and expensive the process is,” he says.
“Unnecessary questions generate unnecessary information that has to be sifted through. It is in both sides’ best interests to focus on quality rather than quantity.”
Geoffrey Bray, chairman of Fleet Support Group, agrees: “Companies must decide their aim and what is to be achieved by going out to tender.
"A critical step in evaluating the need to go out to bid is to define opportunities for improvement within the current fleet structure.
"The key is to determine if these issues can be rectified with the current supplier, or if there is a quantifiable benefit to switching.
“The tender document should then reflect what is happ-ening within the fleet and tackle specifics. Potential suppliers can then deliver solutions addressing the issues.”
Stewart Whyte, managing director of fleet consultancy Fleet Audits, says: “The best forms of tender is considered to be output based – you define the problem, what you want to achieve and let the bidders offer their overall solutions.”
To avoid messy scenarios – such as information and data obtained, but not required and vital information and data missing – experts recommend a collegiate approach to tender compilation and a pre-qualification stage.
Procurement professional Carl Stephens, director of supplier management at Venson Automotive Solutions, says businesses should use all the knowledge at their disposal to compile the tender document.
He says: “The role of the procurement professional is to bring together all aspects of the business – the fleet manager for their operational expertise and overall knowledge, finance, health and safety, quality control and environment personnel and the legal department.”
Potential suppliers must have knowledge of the organisation, and understand the fleet set-up and what is required.
Equally, it is essential that the organisation issuing the tender has a high-level of marketplace knowledge so the ‘right’ suppliers are asked to tender.
That is why a prequalification stage embracing a ‘request for information’ from potential suppliers is important – Trotman used to approach about 20 providers.
“The request for information had just 16 key questions. It wasn’t a hugely onerous task because I knew what I wanted to know,” he says.
“Ultimately, the tender shortlist should consist of six to eight contenders that you’re comfortable can do the job they say they can do. Then it becomes a discussion about pricing and company culture.”
Key issues to consider when tendering
- Project organisation
- Contract background
- Relevant legislation
- Trade union consultation
- Commercial competition
- The evaluation process
- Evaluation findings
- Financel and contractual issues
- Post contract management
- Audit trail
Source: Chartered Institute of Purchasing and Supply
Essential best practice
Shortlist up to six companies prior to obtaining ‘full and final offers’ that will be discussed with would-be suppliers to clear up any issues and make evaluation as straightforward and fair as possible.
“Don’t tie yourself up in knots and make the process too protracted,” says Carl Stephens. “A good tender process is all about planning. If an ill-informed tender is issued then the process unravels.”