Tips For Managing a Successful Competitive Bid
By Susan Mercer-Tumilty, Consultant, ProcurePro Consulting
At ProcurePro we use a lean and Agile 4 Step Procurement Methodology for all our projects. This methodology, developed through decades of experience, delivers results that are practical and sustainable. It is a method that our clients find valuable and that we use internally for our projects – practice what you preach!
The tips below are pulled directly from Phase 2 – Sourcing Strategy Execution of our methodology. To learn more about our Agile 4 Step Methodology contact us today.
So, here you are, you have a competitive bid to run. You have completed all your planning and research, gathered your requirements, done a marketplace assessment and determined your sourcing strategy. You are ready to move forward with the competitive bid. There is so much to do, how do you stay organized and what are the next steps?
1. Project Plan
It is critical that at this point that you create a detailed project plan. You may have already begun one earlier in the project, and if you have, great! If not, now is the time! The project plan will outline all essential elements and activities of your project. Ensure you assign realistic dates and timelines to each activity and determine who is responsible for each. This is a good time to review any conflicts within the organization or with staffing issues internally i.e. black out dates, holidays, other conflicting projects etc. Ensure that key project members have reviewed the timelines and approve before moving forward with the execution of the plan. Your project plan will keep you on track and focused.
2. Determine Evaluation Criteria
How will you evaluate the supplier’s responses to your competitive bid? This should be completed BEFORE you launch the competitive bid or at the very least before the responses are due back. There are a number of reasons for doing this. First you want to ensure that you have outlined what it is that is most important to your organization. What are you looking for in a response that will determine the success of a supplier’s response? Evaluations should be set up in a manner that they can be scored easily. i.e. Use a rating scale of 1 – 5 and determine for each question what kind of response would warrant a 1 vs a 3 vs a 5 etc. Ideally, set up questions that can be answered with Yes/No or a drop-down selection and assign weights to each of those. If done correctly, the majority of the responses will be scored mathematically and quickly.
Second, by determining the evaluation criteria and scoring ahead of time you ensure a fair and unbiased process that can be audited. Should an unsuccessful supplier question the outcome of your competitive bid you will have the information to back up your results and prove there was no bias. Do not wait for responses to come back before determining your evaluation criteria! This is poor Procurement practice and may lead to a lawsuit if you are questioned by a participant.
Finally, you will also want to determine who is evaluating which parts of the competitive bid and ensure they are committed to doing so when the time comes. Technical aspects should be evaluated by your technical lead, financial by the Finance lead etc. Subject Matter Experts (SME’s) such as Cyber Security may be called in for their specific expertise. Procurement is the quarterback responsible to ensure all the players are performing their critical role. In some cases the pricing provided for each supplier may be held back and only reviewed once the other parts of the responses have been reviewed and scored, this ensures that no one is swayed by the pricing of any given supplier. It’s up to the Procurement lead to determine the best approach for the event.
3. Manage the RFx (Competitive Bid)
Now you are ready to assemble your competitive bid and send it out! This should be managed by the Procurement lead to ensure a fair process. Stakeholders should be advised that during this time they should not communicate with any of the participating suppliers and that all communication should go through the Procurement lead.
Typically, at ProcurePro we include major sections in our bid documents, such as Corporate Overview, Requirements, Legal Terms and Conditions, Pricing etc. and include questions and sub-sections within each of those. Depending on the type of event you may consider adding a copy of your agreement for the suppliers to review and provide redlines as part of their response. You may ask for a completed Statement of Work or Implementation Plan or even ask for resumes or profiles of any contingent labor they may be providing. Ensure that within your bid documents you outline a schedule of events for all major deadlines. This is usually a section all on it’s own and typically is one of the first sections the suppliers should review.
Your key stakeholders should review the bid documents and sign-off on them before you send them out to the suppliers. Ensure everyone is aligned and understands what is being included in the package being sent to suppliers.
Whether using a Sourcing Tool or launching manually, the competitive bid should become available to all participating suppliers on the same day and time. Advance notice of when they can expect it should also be given. Following its launch, you should confirm that it has been received, and suppliers can access all information accordingly. You may want to ask suppliers to provide their intent to participate after they have reviewed the documents so you know who you should expect responses from.
You will also want to give the suppliers an opportunity to ask questions. Suppliers should be asked to submit all questions in writing on the same date and time. The Procurement lead will consolidate all questions and facilitate having key stakeholders provide answers. Consolidated questions and answers should be anonymized (scrubbed clean of any supplier names) and sent back to all suppliers at the same time, again to ensure a fair process.
When you set up deadlines for the competitive bid do not assume that suppliers will work weekends and holidays. Ensure you leave enough time (based on the length and detail you are asking for) for the suppliers to respond. If you rush the process you will have suppliers drop out or provide sub par responses. Remember the objective is to find the best overall solution not a fast response.
Finally, you may have some suppliers asking for extensions to your submission deadline for any number of reasons. Generally, an extension is only granted if more than one supplier has requested it (that may indicate you have not granted them enough time), for a valid reason/s and if asked early on in the process. An extension should not be considered if a supplier is asking a few days before the responses are due. Extensions must be granted to all suppliers to ensure a fair process. Again, remember the intent is the best solution so consider carefully if the extension is warranted. Consider also, the other suppliers have put in their best efforts to hit the deadline.
4. Response Evaluation
You have received the supplier responses and now it’s time to evaluate them using the evaluation and scoring criteria you have pre-established. Typically the Procurement or sourcing lead will consolidate all responses (or you may have a sourcing tool that will do that for you) and send it out to be evaluated by the pre-determined evaluation team. It is important to remember that not everyone should evaluate every section. People who are not qualified to evaluate certain sections should not i.e. finance stake holders should not be evaluating technical requirements. Leave each section to the appropriate experts. Whether manual or done by a sourcing tool, if you have set up your scoring correctly it should not take long at all to evaluate. If it does, you have not set it up appropriately.
Once the responses have been evaluated it is the responsibility of the Procurement lead to consolidate those evaluations. We always recommend holding a calibration session to review all the sections and overall evaluation of each for each supplier. This ensures that all stakeholders understood the criteria, how to assign scores and are aligned and agree on the overall scoring outcome. If there are vastly different opinions on scoring, then the team should consider what may be missing? Was the question asked properly? Is the evaluation team clear on what response they are looking for? Getting together and calibrating the results is critical to ensure you are aligned, the evaluation was done in a fair and unbiased way and the team is ready to make a recommendation. This is not intended to try to influence or change the scoring, but rather, a means to ensure that everyone is consistent in how they applied scores.
Once this is completed you may down select to a fewer number of suppliers to move to a presentation or a workshop stage. This is done so that you can begin to narrow the playing field and bring in only those suppliers that you are truly interested in. Generally coming out of evaluations you will see a few front-runners that have already grabbed your attention. We sometimes recommend a Workshop before or in place of the traditional presentation stage. Workshops are intended to be collaborative and allows for open questions on both sides to ensure there is clarity so that suppliers can ensure they are recommending their best solution. Whether invited to present or to a workshop, it should be positioned that they have been selected to move to the next phase. Never let your suppliers know how many have been down selected and never award the business to any one until the contract has been fully executed. If things fall apart at any point during the process and you need to go back to another supplier, you will have lost your competitive positioning. Suppliers will continue to ask for updates on you progress during the process. It is always best to let them know that you are doing your due diligence and you will provide them with updates periodically when appropriate.
5. Supplier Workshops or Presentations
You would have determined in the project planning phase whether your team felt that supplier workshops or presentations were necessary. Key dates for these would have been listed in the competitive bid to suppliers and dates should have been held internally (and rooms booked) for all those key stakeholders who would need to attend.
Supplier workshops and presentations are useful for a number of different reasons. Both gives your organization a chance to meet with the supplier you may potentially be working with. You should ask, where possible, that suppliers bring key personnel with them for their presentations so the project team can get a sense of personalities and determine whether they have the right ‘fit’ for their organization. It also gives you an opportunity to ask the suppliers additional questions, go through parts of their response in detail or see a demo of their product or service. It also gives the suppliers an opportunity to ask you questions. The difference between a workshop and a presentation is that the workshop is intended to be more collaborative and iterative in that it may lead to a revised proposal or improved solution now that the supplier has had a chance to “workshop” with the client. It is usually only used when a complex solution is needed. It ensures the right solution and ultimately can save you time. You never want to get to an award only to find out the supplier missed the mark completely and you need to fall back to another supplier or worse, start all over again. It happens more often then you think.
Always set an agenda in advance and give the suppliers ample time to prep. Be clear on what you would like to see from the suppliers. All suppliers invited to participate should be given the same amount of time and all key stakeholders from your organization should be available for all sessions with all vendors. They cannot pick and choose which to attend. Workshops and Presentations should be evaluated, and all suppliers should be evaluated on the same criteria (again, set up in advance). Scoring should be completed during or immediately following the sessions. Each person scoring should submit their scores before the next session occurs to ensure a fair process.
6. Supplier Recommendation
Once all sessions are complete and final submissions (in the case of a workshop), are received, it is time to pull all the information together in a final recommendation. In a formalized Recommendation outline your journey to this point i.e. dates, suppliers, key decisions that were made along the way, selection criteria and finally the evaluations for each supplier and their presentations and what your final recommendation is and why. Show the math that supports your recommendation, highlight key differentiators between the successful supplier and those that did not make the cut. This deck tells a story, where you started and how you got to the final decision. Should your organization ever be audited, or your process called into question you will have this consolidated deck which outlines the entire project and how you arrived at the final recommendation.
7. Go/No Go Decision
This is a critical final step in the competitive bid process. This is an opportunity to bring the project team, stakeholders, and executives back together and summarize the results from the competitive bid (see above). Do you have enough information to make a decision to move forward? Is everyone aligned? At this point you will want to gain some formal acknowledgment on the decision to either move forward (GO!), end the project (NO GO!), or go back for further information etc.
I hope that you have found this article helpful and hope you apply these tips to your next competitive bid. If you would like more information on our 4 Steps To Agile Procurement, please contact us at email@example.com. Our organization offers deep training on the methodology and other procurement related practices for both Procurement and Sales Professionals which you can find here on our website: https://procurepro.ca/services/training/