How to write a winning tender proposal

Are you applying for government tenders? You should be.

Globally, government tenders are worth a huge 18% of GDP, and in the Republic of Ireland, the largest buyer from Irish suppliers is the Irish government.

Yet you could be one of the many business owners who don’t attempt to compete for government tenders, which could be in relation to anything from looking for a stationery supplier to seeking ecommerce consultancy services, believing that you’d never stand a chance of winning one.

We’ve got news for you.

Firstly, government tenders are regularly awarded to SMB suppliers.
Secondly, to win one you need to have a strategic approach. Applying for a tender in an ad hoc fashion is a waste of time and effort.

Winning a government tender rests on a few elements; one of them is the proposal, and we discuss how to write a tender bid here. (We’ll be speaking about the other elements, such as qualifying your leads, in other posts.)

What does the client want to see?

Here’s a little insider knowledge for you. Putting out a tender is a job that no one enjoys. It’s a time-consuming process for government departments (and for businesses who may occasionally issue tenders).

This insight can work to your benefit if you show clearly in your tender proposal that you understand what the client needs. It sounds simple, but few companies competing for government tenders do this, relying instead on populating free tender templates and speaking about themselves rather than highlighting how you can help the buyer with their requirement.

You’ll seldom find all the information you need to build this understanding of the buyer’s needs through the tender notice. They’re notoriously cryptic (though TenderScout provides extensive additional information for each notice we serve on our platform, such as highlighting all the documents that need to be completed as part of the proposal and rating the opportunity in line with your own business).

To show that you understand what the buyer is looking for, you need to ask questions to gather the information you need, and the best time to do this is before the tender process begins. Hence our advice earlier that to win government contracts you need to adopt a strategic approach.

Ensuring an even playing field for all prospective suppliers once the tendering process is in play often means that government departments are restricted in what they can tell you. This is why it is so important to meet the relevant buyers and speak to them prior to the tender going live. TenderScout provides users with a list of current active tenders at any one time, as well as information on potential prospects, including details on past tenders and information on when they were won, and who won them, to help business owners build pipelines.

Knowing whether the buyer is issuing the tender because of operational or financial (or other) reasons will change the approach you take, so understanding the buyer’s motivation, and showing that understanding in your bid, is your first step in writing a winning tender proposal.

Mind your language

When you write your proposal, make sure that you use the language the buyer uses. This immediately establishes rapport and highlights you as a supplier that has an understanding of what the buyer is looking for.

Unnecessary jargon is annoying and government procurement officers are able to sift through clichés and exaggerations at speed.

Communicating in your proposal as you would with a live human is what you want to do. It’s important to include case studies that show how your product or services can help the buyer achieve their aims, but do this in a way that seeks to inform rather than impress. Don’t describe every process you have as results-driven, and not everything you do is a paradigm shift compared to the rest of the industry so don’t depict is as such.

Time is of the essence for everyone. Write clearly and concisely in your tender proposal, and ironically, you will impress the buyer.

It’s not over until it’s over

Many SMBs set themselves up for failure by competing for one tender, not winning it, and then doing nothing.

Don’t make this mistake. You’re legally entitled to feedback on your tender proposal and to find out why you scored lower than the winning proposal.

This information is gold dust!

Actively ask the buyer for it. Not only does this provide you with a further opportunity to speak to the buyer and build the relationship, which stands you in good stead when they tender again, you will also receive first hand information on how to improve your tender proposal.

Then, use this information. Again, you’ll be surprised at how many SMEs don’t and submit a second tender proposal for an opportunity that looks exactly the same as their first. Another waste of time and effort.

We help businesses win more government contracts. Our method is exactly as we outline here, and businesses that work with us and follow our advice increase their winning rate to 70% within three tender proposals.

If you’re interested in how your business could gain a slice of the government tender pie, please feel free to contact us. We’d be delighted to hear from you and help you win tenders.

 



How much does it cost to respond to an RFP?

You may have heard that governments around the world spend more that $3 Trillion on goods and services that they procurement through competitive Request for Proposal (RFP) processes.

If you’re like the vast majority of small-medium-businesses (SMBs) you’ll have concluded that it’s not really worth the effort – it’s too resource intensive, too costly and the outcomes are too unpredictable to be considered worthy of investment.

Is it really thought? How much does it actually cost to respond to an RFP and how much should you be investing in related presales activity before you start seeing an uptick in your fortunes?

Empirical evidence is quite thin on the ground in this regard. A cursory internet search reveals that the Irish government suggest SMBs spend about $5,000, LexMundi estimates a legal proposal, , will take 40-50 hours to compile (again c.$5,000), but there’s very little data. So at TenderScout set ourselves the challenge of figuring out what the right answer was; we decided to get some data! Data is the difference between feeling that proposals are too expensive and knowing exactly how expensive or not that they are.

Gathering the Data: How much do SMBs tell us they spend?

We asked 130 SMBs how much they spend on proposals in response to RFPs; this is what we found:

  •  SMB Investment in RFPs worth less than $140,000
    For low value contracts, typically those published by state, city or county buyers, 57% of SMBs spend a maximum of $2,100 on their proposal, while 26% spend in the region of $5,300.
  • SMB Investment in RFPs worth more than $140,000
    For higher value contracts, typically those published by federal buyers, 48% of suppliers spend up to $5,300, while 50% spend up to $10,000 and beyond.

    Analyzing the Data: What’s the % of cost to contract value?

    To determine the correlation between the cost that SMBs compiling a proposal and the value of that contract, we mapped the data taken from our SMBs real proposals and we found that SMBs spend 3% to 6% of the contract value on all of the activities leading ou to and including the proposal delivery.

Analyzing the Data: Can we predict competition outcomes based on the amount invested?

To round out our challenge, we asked our SMBs to tell us their win-rate, the ratio of proposals submitted to contracts won. We wanted to see if the level of investment could be used as a predictor of outcomes. When analyzing our sample data set we discovered a linear correlation between the amount invested and the win-rate;
An SMB that invests 1% of contract value on proposal delivery has a win-rate of 10%, while a 6% investment results in a win-rate of 60%. The impact of investment at higher levels becomes increasingly marginal.

 

In conclusion, SMB, should invest at least 3% of the expected value of the business if they are serious about competing for RFPs; those that spend more than that will realize significantly impactful results.

Selling to Government Organizations – What do I need to know?

Government organizations invest millions of dollars in RFPs for goods and services each year; dollars they spend with small-medium-businesses (SMB) throughout the US. There is a huge potential for SMEs to participate and increase their revenue with public contracting. Yet most of them avoid it with lot of excuses including complaints about transparency of the system, time consuming process or budget. They struggle with finding and qualifying right opportunities. When they participate, their win rate is very low, typically around 10-25%. So what are they doing wrong?

Having participated in the qualification of thousands of RFPs, it’s clear that the norm is for SMEs to run headlong into seemingly attractive opportunities without considering whether it’s really for them – that’s not a recipe for sustained results. Winning contracts is a process that starts with baselining your capability and capacity to compete for opportunities. Once you recognise what your strengths are and you’ve a plan to rectify your weaknesses you’re ready to start finding, qualifying and competing for opportunities

Find the opportunity

There is a couple of public websites we mentioned in our previous blog posts (Finding government contracts that you can actually win) where you can find government contracts. These sources usually display opportunities from certain country or region.

However most bid managers will benefit from a single source of information. So instead of browsing different websites, use a single platform source like Tenderscout. You can search for more than 5,000 new opportunities every day from 100+ countries.

Qualify if it’s a right fit for you

Let’s say you found an opportunity in your country that matches your area of expertise. It seems like you can do this one, but should you go for it without further examination? The answer is no! Proper qualification is the most important part of the process. There can be a lot of hidden factors including past buyer records that may warn you from competing for this opportunity.

Make sure you have all the information before making a decision that could cost you a lot of time and resources. Use qualification analytical tools that will help you determine whether to bid or not and avoid contracts you have a very little chance of winning.

Compete

When you pick the ideal opportunity, here comes the real challenge – being the best one among all the bidders and winning the contract. That’s where you need to show differentiation. Show the buyer who you really are and why are you the best fit for them. Understand their needs, think outside of the box and offer the best innovative solution. It is also very useful to follow structured templates that will guide you through the process of writing the proposal.

 

To increase your chance of winning government contracts make sure you build the right process and long term plan. Find, qualify and compete for opportunities strategically. Every SME has a chance to participate and become successful public supplier. Use tools like TenderScout and start winning more business today.

Do I have any chance of winning a government contract?

A Question we are often asked by potential clients in Tenderscout is do I have any chance of winning a government contract? Sometimes the client is frustrated because they are only winning 10-25% of the opportunities they are writing; sometimes they have never tried but have no faith in the fairness of the process. For the record, in our experience 95% of these opportunities are run fairly.

There are two answers to this question:

Yes…but… in short it has to be the right opportunity for you, understanding which ones work for you can sometimes take a little trial and error, but the first step is to understand the need of the buyer, and whether or not you can fulfill this need.

In order to answer this question you should ensure that you have a     strong Bid/No-Bid and Qualification process for each opportunity you are going to pursue.

Figure out exactly what the client is looking for, for example, a new website is rarely the goal of a RFP but a new website is a great way to achieve the goal of improving the look and feel of a brand online. Once you understand the client’s needs, it is easier for you to assess whether the opportunity is right for your company.

Honestly assess your own capabilities – a five-person agency is unlikely to win an opportunity that calls for huge complexity, 24-hour support and has a minimum budget of $1,000,000. Start with contracts that you can almost certainly win and ignore the ones you have little chance of winning. This will have a positive impact on both your team’s morale and your costs!

 

No…Unless… You treat winning public opportunities like a process. When it comes to winning private sector business you have most likely built a sales process that works for you and winning public opportunities is no different. So the better question becomes – how do I go about winning opportunities that work for my company?

As mentioned above start with Qualification and Bid/No-Bid. Next, demonstrate that you understand the needs of the buyer – in the example of the website rebuild that we used above find out why they want to build a website – User engagement, Brand image improvement, Improving User understanding of the service they offer. Showing the buyer that you understand what they actually need and shaping your solution to that need will distinguish you from 90% of your competitors.

Demonstrating your team’s suitability for this project. Your CV’s are you chance to sell a buyer on your team, in the public sector as well as the private – people buy from people. Take this opportunity to tell a story about each team member and what makes him or her suitable for this project, not just another cookie cutter LinkedIn profile or recitation of the jobs that they have done and education they have.

Spend time on your template documents – things like safety statements and CV’s, Case Studies, Methodology may seem like simple items that are taken as read but there are valuable points available here, they are documents and policies that are easy to get right so why don’t you get them right?

Do not stress about price – price the job like you would in the private sector, charge the price that works for you and not the one that you think will win. Contrary to popular belief, the last thing any opportunity falls down on is price.

Building or improving a robust government contracting process for both Public and Private RFP’s is something that can benefit almost every business we do it every day in www.tenderscout.com. The basics of how we do it are laid out here, if you would like to learn more feel free to connect with me on LinkedIn – or email me at ronan@tenderscout.com

Beating the Odds – How SMEs win RFPs

It’s common wisdom that for small and medium businesses (SMB) competing for government contracts is a waste of time. RFPs are loaded with legal jargon, the requirements are vague, the names of incumbents a closely guarded secret. And what? You want to know the budget? That’s just crazy talk.

Those are just some of the sentiments that I hear from bid managers and sales executive, when I ask them why they’re avoiding government contracts. To a large extent they’re right to. The average win rate for an SME is an appalling 26% according to PwC’s most recent report into European procurement Activity (Report).

To digress into figures for a moment, the same report indicates that the average contract value is €60,000. Most businesses spend around 5% of the contract value on presales activities. It’s plainly unsustainable to build a 20% margin into your proposals just to break even.

Next time you’re weighing up the odds of spending that money on writing a proposal or having a flutter in the casino, take note that in The Signal and the Noise, Nate Silver noted that the odds of winning at Blackjack in Las Vegas were 48% – that sounds more attractive in the short term than slogging over a proposal you’ve little chance of winning!

But here’s the thing, there’s a small cohort of SMEs who are beating these odds and winning as much as 70% of the RPP proposals that they write. At TenderScout we studied over 100 of these businesses to try and understand what they were doing differently and how we could apply their strategies in our clients businesses.

All companies spend pretty much the same amount (between 3% and 6% of the contract value) on their presales activities; the difference is in where they spend it.

In most companies, around 10% of pre-sales cost is incurred on qualifying opportunities and almost 90% on proposal development – writing content, creating graphics and so forth In the cohort that are beating the odds, they spend three times as much, up to 30% qualifying opportunities (and conversely less time writing actual proposals).

The qualification process is fundamentally data-driven decision making around which RFPs, fit the sweet spot and are winnable. We identified 4 key categories of tools used to help make decision:

  • Customer Relationship Management Tool (CRM) to record details of your relationships with buyers and build up a record of your engagement with them.
  • Buyer Profiling to better understand who the buyer is, who the key decision makers are, what the buying history looks like, how they make buying decisions, how much they typically spend and what their needs are.
  • Competitive Landscape Analysis to acknowledge whom your competitors are, their strengths and differentiators, their relationship with the buyer, their track record, experience and expertise and whether they are likely to submit a better proposal than you can.
  • Bid/No-Bid process to standardize decision making in the context of your solution, the buyer need, the competitive landscape, the budget and timescales within which the solution is to be delivered and so forth to determine whether all else being equal your proposal will meet their needs and be a more compelling proposition than that of your competitors.

Businesses are using tools like salesforce, Datahug, VisibleThread and TenderScout amongst others to simplify the process, increasing the robustness of their decision making and ultimately giving themselves a platform for sustainable success.

Finding government contracts that you can actually win

Public sector contracts represent about 12% of the Irish economy. There’s huge potential for companies to grow their revenues through government contracting. Yet, the majority of businesses don’t compete for contracts because they don’t feel that their effort is worth the reward.

Many small and medium businesses have the potential to compete and win government contract, but there are challenges to overcome. The first is figuring out just why all of these opportunities are hiding.

The Irish government publishes around 7,000 tenders each year, the majority of which are between €25,000 and €135,000 in value. They can mostly be found on etenders.gov.ie. If you’re feeling more confident, higher value contracts are found on the pan-European website ted.europa.eu.

There are other sources of tenders, mostly paid-subscription services offering some value added features like email alerts and market research, but most of their opportunities come from these public sources.

The key challenge of course is not finding where the opportunities live, rather finding the opportunities that you actually have a chance of winning. There’s no point in writing proposals for opportunities that just don’t fit your sweet-spot. Even if you win the contract, you’re going to be up against it to try and fulfil the contract terms, much less make a profit.

It’s easy to miss the right opportunity if you’re spending all of your time sifting for hours through different websites looking for that perfect opportunity.

To increase your chance of starting out on the right path, choose a source of opportunities that combines multiple sources and automatics as much of the sifting through opportunities as possible. That means you’ll just be focussing on opportunities that are right for you.

To give yourself the best chance of success, focus on finding opportunities that you truly believe are ‘meant for you’. Use alerts services like www.tenderscout.com that give you a single source of information and fast-track you towards winning those contracts you deserve. There are a thousands of public opportunities out there. Make sure that you’re competing for the ones with your name on it.