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What criteria are used to evaluate bids?

We often get asked by our clients, what measures do they use in bid evaluation? They want to know how to get the maximum scores for their tender response proposal.

Our simple answer is - Tell the story your Client wants to hear, not the story you want to tell.

Rightly or wrongly, your Clients ask for very specific information in their tender documents and use your response to this specific information in their bid evaluation.

Some of this information is ‘mandatory’: you either provide what your Client’s Bid Evaluator’s are asking for or you don’t get through the first gate.

By using the principles in this bid evaluation article, you will start materially reducing your costs-to-bid and risks-to-win.

Maximise your scores in bid evaluation by supplying the mandatory criteria

You would be surprised how many bid responses are excluded from detailed bid evaluation because they don’t provide the mandatory information.

When evaluating some bid responses, we came across these recent examples ‘During negotiations, we will provide a full P&L for the last 5 years’ and ‘No organisation in the industry will be willing to provide the required level of indemnity’.

Well, all the other bidders did provide this information. They found a way to say ‘yes’ to the mandatory information. So their bids proceeded.

Maximise your scores in bid evaluation when the bid asks for ‘comparative’ information

When some of the information is ‘comparative’, it is critical that you highlight what is different and better about your offer – provided what you are offering is what the Client is asking for.

A late 2019 example: the Client was asking for something that was ridiculously expensive. Every bidder – but one – provided a much cheaper solution that did not do what the Client was asking for. The one bidder (our customer), offered exactly what their Client was asking for (at a crazy price), highlighted what was different and better about their approach. And they were very surprised when they won.

So, you see that you have to tell the Client the story they want to hear.

What are the nuances during the bid evaluation?

In bid evaluation, it is never this straightforward, is it?

There are nuances to this. In fact, there are three!

1. Your Clients don’t understand the impact of what they are asking for

It is true that sometimes your Client’s don’t understand the impact of what they are asking for. For example, in terms of price , risk, time delays or equipment failure rates, and so on.

(A quick diversion: you definitely need to be familiar with the eleven types of risks that Bid Evaluators often use when scoring tender responses).

bid evaluation

Ideally, you try to solve this problem by influencing your Client before the tender is released. Once the tender is released, all your Client’s stakeholders have signed off, and there’s little likelihood that Bid Evaluators can gain approval to change specifications or timings.

So, what do you do if the Client has released their tender documents and they are asking for something that doesn’t make sense?

One option is to submit an alternate solution. But make sure you read the fine print: many tender documents in the last 12 months have required bidders as part of the bid evaluation to submit another complete set of Response Schedules for an alternative solution.

Yes, you’ve read that right: you must submit two full tender responses – one for the solution your Client wants and the other for the solution you want to offer.

That is an enormous amount of work – both for you and your Client’s Bid Evaluators. So make sure you do an outstanding job of quantifying the additional benefits of your alternative solution compared to the solution the Client wants to get through the bid evaluation.

When quantifying benefits, you want to focus on how much you can reduce costs and risks, and over what timeframe. In some cases, your Client may also benefit from an increase in their revenues, although this is a harder argument to win.

Additionally and just as importantly, you want to guarantee those benefits – yes, your commercial/legal people will have something to say about that. So you may need to remind them how badly your competitors want this particular deal.

2. Your organisation was always going to come second

A very common nuance is that your organisation was always going to come second. In other words, there is a strong bias against your organisation.

For example, you’ll be up against this bias if this is the first time you’ve bid to the Client. The Client’s Bid Evaluators will add a ‘premium’ to your price to reflect possible rework, delays, relationship difficulties in the start-up phase and so on.

So what do you do? You put in such a compelling offer for exactly what your Client wants, that your offer can’t be ignored.

An example, again from late 2019, was an organisation that proposed a ‘fixed price’ for a project, and agreed to contractual terms that limited them to zero variations in price. Yes, you read that right.

And it doesn’t have to be the level of price (although you can never underestimate the importance of price certainty to Client Bid Evaluators).

Quite often, it is attractive for Clients to be offered specialist expertise at the start-up of the contract. This is attractive to Clients because it materially reduces mobilisation (or transition) risk.

3. Client Bid Evaluators ask for alternative solutions

And lastly, an increasingly common nuance as part of bid evaluation, is that Clients specifically ask for alternative solutions ‘where the Bidder can demonstrate significant extra benefits’.

But don’t underestimate how hard this is for your Client’s bid evaluators – who have asked for X solution – to then decide to go with Y solution. Essentially, you are asking your Client’s bid evaluators to go back to their stakeholders and get approval to spend the money again.

That is problematic for your Client. Why? because your Client used X solution as the justification to get their budget in the first place i.e. ‘if we spend $A on X solution, we will get $B result’.

Some of those stakeholders can be external to your Client’s organisation e.g. financiers (banks, leasing companies, Treasury), Regulators, special interest groups (landholders, disability advocates), accreditation agencies and so on. They are not easily swayed to change their minds.

An example from an early 2020 tender, a bidder was clearly much more interested in describing the benefits of their alternative solution. They were – let’s say it politely – ‘shocked’ that their Client advised all bidders that there would be a delay in the decision until their new budget cycle started in a further eight months time.

So, where does this leave you looking for the criteria for bid evaluation? I hope with ‘eyes wide open’: bidding is very costly and very risky. Thankfully, by using the principles in this bid evaluation article, you will start materially reducing your costs-to-bid and risks-to-win.

Want to know how your tender is measuring against the bid evaluation? Want to maximise the bid evaluation points on your tender? Contact us here for a free initial assessment of your tender documents.

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