Tender for a contract
How to prepare convincing tenders to win business from both private and public sector organisations
Submitting a tender is common practice for businesses supplying goods or services to other businesses or the public sector.
At a basic level you expect to quote for a job or write a letter saying why you should be given the business.
More formal tenders often apply to bigger jobs or for supply contracts spread over time. Public sector work in particular has specific tendering processes. This could include your local council or hospital or a central government department.
Even if you don't win the work this time, writing a tender can clarify your aims, strengths and weaknesses. You can learn for next time by asking for feedback on your bid. It raises your profile with the customer and helps you learn about customers' needs.
This guide explains how to identify potential contracts, what to include in your tender and how to write it for the best chance of success.
Finding out about private and public contracts
Where to search for private and public sector contract tender opportunities for your business
You can find out about private sector contracts in a number of ways:
- build contacts with potential customers
- advertisements in local and national newspapers
- advertisements in trade and professional magazines covering your area of business
- research contracts outside your business sector which may produce secondary contracts for you, eg if a new office block is built, it will need desks, carpets, signage, stationery, cleaning and laundry
- follow up press and other reports - a company may be expanding or sub-contracting part of a big order
- network and pick up information from other businesses
You can identify public sector contracts by:
- Browsing online procurement portals - such as eTendersNI for opportunities in Northern Ireland, and eTenders.ie for opportunities in the Republic of Ireland. Read more about tender for public sector contracts in Great Britain and Ireland and tender for contracts in the Northern Ireland public sector.
- Reading procurement pipeline information - some public sector organisations publish pipeline information relating to upcoming tendering opportunities
- Finding out the challenges currently advertised by the Small Business Research Initiative (SBRI) - this provides funding for innovative products that could help solve a specific problem a government department or agency wants to solve. Successful applicants receive a development contract for the full cost of demonstrating the feasibility of their technology, and the opportunity for subsequent funding for prototype development, whilst retaining the intellectual property.
- Contact your local Enterprise Europe Network.
If you are interested in high value public sector contracts available in other European Union (EU) countries, you can search on the Tenders Electronic Daily (TED) website. This is the online version of the Official Journal of the European Union - where all contracts worth more than specified EU procurement thresholds are advertised.
Should you bid for a tender?
The key points to consider when deciding to tender
Preparing tenders can help you to win big orders but it can be time-consuming, cost money and tie up valuable resources. If you don't get the contract, the money and time spent is usually lost - so consider the key points below before setting out to tender.
Key points to consider before tendering
- Get hold of the bid documents and analyse them.
- Make sure you can match the technical, skill and experience requirements.
- Do you meet the necessary requirements - eg environmental and diversity?
- How much will it cost to prepare your bid?
- Would the work fit in with your strategy and positioning of your business?
- Estimate the costs of fulfilling the contract and whether or not you'd make enough money to justify it.
- Assess how the contract would affect your other work, staffing and ability to take on other new business.
You also need to consider how important the customer is to your business. Is this a good potential client or one you don't want to offend by not tendering? Consider how it would look from the client's point of view.
Search for public sector opportunities on eTendersNI.
Understand the tender requirements
How to identify what a client is hoping to get from the tendering process and whether it will worthwhile for your business to submit a bid
For a private sector tender, in order to gain a clearer understanding of a potential client's requirements, see if you can arrange a meeting or have a telephone conversation with them before you start work on the tender. You should always raise questions by phone or email if tender documents are unclear - on anything from deadlines to how you'd get paid.
Make sure the client is serious and that you're not there just to make up the numbers or to test the market. Sometimes customers may just be fishing for ideas they'll then use for themselves. You can prevent this from happening by requesting customers to sign a non-disclosure agreement before presenting your tender. But don't forget many clients genuinely want you to make a creative contribution and provide ideas.
If you're selling to the public sector, the tender documents will contain instructions to tenderers. Read the instructions clearly, and if you are unsure about the detail within the specification, then raise a query online through the tendering portal. The buyer will respond as soon as possible.
What to put in your tender
Ways to ensure your tender document reflects the client's needs including focus on the client, value for money, contracts and risk management
Make sure you read the specification carefully and answer all sections of the bid fully.
Summarise your bid and explain why it answers the client's needs. Write this last but put it at the beginning of your tender.
Crucial rules for your tender documentation
- Focus on the client - talk about their needs and how you can solve their problems. When you write about yourself, it's to prove you have the skills, experience and organisation to fulfil the client's requirements.
- Help the client by coming up with ideas - from alternative ways of doing things to how to tackle possible worries about future maintenance and staffing implications.
- If the client has provided a qualification document, make sure that you cover everything in the document.
- Value for money and not price alone decides most bids. Try to bring something to the work that can't be done by the client or your competitors. Emphasise business benefits, service improvements, risk reduction, low maintenance, quality, reliability, previous satisfied customers, lifetime costs etc.
- Analyse all the cost and pricing factors of the contract. Don't ignore fixed costs such as pay for staff who could be working on something else.
- Consider whether to include some protection of your information from future disclosure under the Freedom of Information Act. You may wish to indicate which information you consider to be a 'trade secret' or is likely to prejudice your commercial interests if disclosed. You could also include a non-disclosure agreement.
- Contract management - show you have the resources to do the work in a cost-effective way to meet the client's needs, hit deadlines and respond flexibly to changing situations.
- Show you have thought about - and can manage - potential financial, commercial and legal risks that could cause contract failure.
- Give details of your team. Emphasise strengths - CVs or tailored biographies should highlight successes with similar projects as well as qualifications and experience.
Writing your tender
The key points your tender and covering letter should make and considerations such as who will do the research, writing and editing
Once you have decided to bid, you'll need to decide how you'll manage the bid:
- Who gathers information and does research?
- Who co-ordinates all the material you need?
- Who writes the drafts?
- Who checks them?
- How will the rest of your firm's work get done?
A good starting point is to make a list of all the questions you would ask if a company was submitting a tender to provide a product or service to you.
Clients will expect you to:
- state the purpose and origin of the bid
- summarise your work as a contractor, past experience and credentials for this job
- say how you'll carry out the work, and how and when you will meet the client's needs
- explain the benefits and value for money of your bid
- detail when and how goods and services are to be delivered, and provide a timetable
- demonstrate your team's skills, experience of similar work and their responsibilities if you win the contract
- explain how you will manage the project
- give details of your pricing and any aftercare arrangements within the price
- be practical and identify potential problems, but do not make promises that are clearly impossible for you to deliver
Include a covering letter that responds to the bid invitation, summarises your main message and explains how the documents are organised.
You should also be aware that information from your tender may be disclosed in the future under the Freedom of Information Act. This gives anyone, including your competitors, the general right to see information held by public authorities - including the information in your tender.
You should clearly indicate which information is commercially confidential. If the information is particularly sensitive, you might want to ask for a non-disclosure agreement.
If the tender is for a public sector contract, then follow the instructions given in the tendering documents carefully. The documents will be clear on what the client needs and the criteria for evaluating the tenders.
Use the award criteria headings to structure your bid, and do not assume the evaluation panel have any prior knowledge about your organisation.
Ensure that you answer all parts of the tender and upload all the required supporting documents. Check your pricing schedule to ensure that you have included all the requested items. Failure to provide a complete pricing schedule could lead to your tender being excluded.
Editing your tender
Advice on the language, style and format you should use in a tender document such as consistency, clear layout and formatting
It is well worth spending some time looking at the presentation of your tender. Here are some tips on editing and supplying your tender:
- Keep sentences and paragraphs short, punchy and business-like.
- Use bullet points and headings to break up text.
- Decide on a typeface, layout and type size - not too small - and stick to them.
- Make sure everything is consistent. Are CVs all presented in the same way?
- Be careful when cutting and pasting text to make sure the format stays the same.
- Make sure you have developed a logical argument.
- Read everything again. Then get a colleague to read it - checking for meaning, typing mistakes and omissions.
- Use appendices for supporting additional information.
- Produce a front cover with the project title, date, name of the organisation requesting the tender and that of your own firm.
- Number paragraphs and provide a contents page so material can be easily found.
- Consider getting it printed and bound professionally - if the client has asked for hard copies rather than submission via email.
Above all, make sure the tender is delivered on time - it is unlikely that organisations will consider your tender if it arrives after the closing date. You may want to deliver it yourself, by hand, to ensure it arrives safely, or by courier for secure delivery. Alternatively, contact the organisation to check they have received it.
If the tender is for a public sector contract, then you will be uploading and submitting the tender online. Leave plenty of time to ensure your bid is fully submitted before the deadline. Most tendering portals have a telephone helpdesk to contact if there are any problems.
Check you have provided enough detail for each of the award criteria, and there are no spelling mistakes. If you are using the eTendersNI portal, then you can edit and re-submit the tender as many times as required, up to the tender deadline.
Five top tips for public sector tenders
There are a number of ways that small and medium sized businesses (SMEs) can successfully tender for public sector contracts in the UK. Follow these tips to help your business win government contracts:
- Start small - Start with low value procurements to build up a government customer base. Aim for opportunities under £100,000 where government has abolished Pre-Qualification Questionnaires (PQQs). Building up your base this way is a great foundation for competing for bigger sales in the future.
- Spot opportunities early - Keep an eye out for potential opportunities before they formally go to market so you can be prepared. Attend information days and sign up for email alerts. See finding out about private and public contracts.
- Play to your strengths - Public sector procurers see SMEs as flexible, quicker to react and able to offer better prices. Use the pre-market engagement to show this by reacting quickly to questions, offering options and evidence of where you've responded to change in the past. Recognise that you are likely to be cheaper than bigger players and show evidence that you offer value for money.
- Pass the test - No matter how good you are, success hinges on making your strengths clear on paper. Think of your bid documents as an exam - take it seriously and answer the question being asked. Consider getting advice if it's your first time.
- Provide evidence - If you say your offering will do something, prove it. For example, include a screen shot of how it works or other tangible evidence.
See prepare your business to tender for contracts for further advice on getting ready to bid successfully.