You have to re-tender for an existing contract. What do you do? Don’t worry, this guide to re-tendering will help. It explains what to do and how to avoid some common pitfalls when re-tendering. Follow these steps to increase your chances of keeping the contract.
How to Re-tender for an Existing Contract
The need to re-tender for an existing contract is a common reason for clients contacting us for help with a bid. They tend to fall into these categories:
- They have never had to submit a modern, more complex tender before and so are not sure how to approach it. Many clients have held contracts for years. They have won previous re-tenders which were price driven but not so complicated. This is typical of contracts involving public money falling in line with OJEU rules.
- A friendly buyer has recommended that they engage a tender consultant. Sometimes the buyer has seen a past submission which was not up to scratch. Or the buyer knows the client’s in-house resources / skills might not be able to create a winning bid.
- It’s a must win tender. If they lose it, it will hurt the business.
Whatever the reason, they want to win the tender and keep the contract.
The starting point is to follow tendering best practice.
This is obvious – do everything correctly and you increase your chances of winning! There’s lots of information about this in our blog. Start with how to answer tender questions and writing positive Tenders. Also, make sure that you avoid making the most common mistakes when re-tendering.
Apart from applying best practice, the following steps will help you win the re-tender:
Don’t Assume They Know All About You
It’s common for business owners to say to me “Our customer knows all about us, so we don’t need to write everything down.”. WRONG!
Buyers should look at each bid objectively. They should mark the tender submission on what is written in the response. Tender are also normally evaluated by a procurement panel – some of whom may not really know you. So, buyers need to be told all about your business. What is is, what it does and how it does it.
When you re-tender for an existing contract, approach it as though they know nothing about you. Explain everything thoroughly.
Show How You’ve Worked Together Successfully
You have told them about your company. You now need to explain how successful you have been in servicing the contract you are re-bidding for.
“Don’t hide your light under a bushel” is something I frequently say to clients. Don’t be boastful but do explain all the good things that you do for your customer. This should include differentiators. For example, where you have added value, saved money, innovated, provided social value etc.
Case studies, testimonials & evidence are a useful way of doing that.
You can also show statistics like key performance indicators (KPIs). These are great if you have an excellent track record of meeting customer targets. Like 99% on-time, 0% accidents etc. Top Tip: if you don’t have these, start collating some key success data. They not only help with re-tenders. They can also be useful in price-increase negotiations. Or showing new decision makers how good you are etc.
You can also use examples of success from your other contracts as evidence of success.
Explain why you are the perfect supplier – with proof!
Check the Specification
When you read the invitation to tender (ITT), you need to carefully check the specification. It might be different to what you currently do. When you respond to the tender, you must make sure that you meet the specification.
Show Innovation and Continuous Improvement
Most high-value public sector tenders will ask how you will innovate. Showing how you will bring about new ideas or improvements will help you gain vital points.
When you re-tender for an existing contract, have a re-think about what you have done. Then what you will do better. Are there new ways of doing things? New technology? Better systems?
Your competitors will be doing this so make sure you do to!
Sometimes, clients say “what if they ask why we haven’t done it before?”. It’s not as embarrassing as it might sound. You just explain that this is new contract. You are keen to win this. So, you have carefully thought how you will bring improvements to the new contract.
Another way of gaining more points is to show how you have continuously improved performance. Ideally, for the current contract. You might have identified an issue (e.g. regular complaints about the same thing) and fixed it. Or you have seen opportunity to do something differently to improve your service. This should then be tied in to assuring the customer that the process will be applied to the new contract.
Again, you can also use examples of your other contracts to provide evidence of continuous improvement.
Prices May Need to Change
Study the requirements, contract, specification and pricing template. You may find that you need to re-evaluate your tender pricing. It’s common to think your prices will increase. But you may decide that prices might have to go down to keep the contract. If you have held a contract for many years and enjoyed good increases, your prices might be higher than current market rates.
You may find the way that prices are being requested are different to how you currently do things. For example, you might have historically priced on hourly rates. But the new contract asks for job prices.
Start off by treating the re-tender as though it is a brand-new opportunity.
Do You Really Want to Win the Re-tender?
Not if it means that the contract will run at a loss! Or it might involve something that you don’t do (or don’t want to do).
If the contract is not right for you any more you might decide not to bid.
Write Specifically for the Re-tender
Don’t submit a generic response. That is a sure-fire way to fail the re-tender!
When you re-tender for an existing contract, you have distinct advantage to your competitors. You have the best / most knowledge of the contract – use it!
When writing responses to the tender questions, demonstrate your understanding. Make your response highly relevant to the re-tender.
Carefully Check Re-tender Questions
Then make sure that you answer the actual questions. Don’t just write what you think is being asked based on your knowledge.
Highlight the Cost of Change
Something often overlooked when re-tendering for an existing contract is cost of change. Quite naturally, suppliers are worried that the buyer choose the best deal. But changing suppliers has a cost. The obvious cost is that the buyer will need to invest time bedding in the new supplier. Mistakes are common at the early stages, increasing costs.
Always highlight how the buyer will not incur any cost of change by selecting your company.
Your knowledge will also ensure a seamless transition to the new contract. From day-one!
Start Working on the Re-tender Immediately
Don’t delay, there’s lots of work to do in creating a winning re-tender. Start working on the tender as soon as possible.
The quicker you start planning, the more you increase your chances of success.
Preparing to Re-tender for an Existing Contract
Even a rolling contract can be terminated and re-tendered. Whether the re-tender is due soon or sometime in future, start preparing now.
This tender checklist is a good place to start.
Start gathering evidence. For example, recording KPIs, obtaining testimonials, writing case studies and examples of continuous improvement.
Make sure that your service is good. And ensure that your staff are aware of the need to shine.
Look at continuous improvement, innovation, adding value and social value. Now and for the re-tender.
One of the most common failings when re-tendering is to assume that your customer knows you. So, you might think that you don’t need to write much. Hopefully you can now see how wrong that is!
Your competitors will be approaching this as new business. You must do the same. But don’t forget to highlight the cost of changing suppliers.
When you have to re-tender for an existing contract, follow this guide. You will increase your chances of retaining the contract!
I’d love to hear your thoughts on other things to watch out for when re-tendering. Or your experiences with re-tenders.
Feel free to add your comments below.