Before we dive into the details, there is one rule we want you to understand about tenders right at the top: the lowest price isn’t as important as the greatest value.
What do we mean by this? We mean that being the cheapest offer on the tender table doesn’t necessarily put you ahead of the competition. Showing that you offer value, however, does. Price can be a differentiator, but strategic and personal value will make your bid stand out.
Each company going out to tender will value different elements of the bids. Some will most certainly be prioritising price, while others will be more concerned with speed or the credentials of the applicants. As a result, there is no ironproof strategy for preparing a tender, but there are guidelines that will increase your chance of winning one.
What are the main areas of value in tender decisions?
As a general rule, most organisations are looking for three main areas of value: financial, strategic and cultural. Let’s take a closer look at these:
1. Financial
Buyers ultimately want to know if you can help them avoid costs and increase revenue and profitability. Financials need to be precise and delivered in percentages and dollar amounts. We like to recommend offering these stats in six-month blocks.
2. Strategic
Your strategic benefits should work to increase the organisation’s service quality, delivery times and any other features that will essentially make their business look good.
Strategic benefits can be hard to measure, but they will be more effective if you can make them resonate. How do you do this? By having a great understanding of your prospect. We always recommend asking questions before submitting an offer to help design your strategic benefits.
3. Cultural
If you win the bid, you will be working alongside the buyer, and you need to show why they will enjoy that. Show them how you will make things easier for them at work every day, and feel free to inject some of your own personality to help give your bid a unique voice.
Once again, you need to understand the buyer to make your proposal speak to them, but always remember, they will likely read several bids; yours will stand out if it presents some personality.
Your tender application checklist
When putting together your tender proposal takes time, preparation is key, and small oversights can lead to a very quick rejection. When we initially set out at E1 to discover why tender send-outs are so difficult, we quickly discovered seven must-haves for a successful application:
- We’ve touched on this, but thoroughly examining the entire tender document’s details is a must. If you are unsure about anything, ask the questions and find out the answers before submitting your bid.
- Find out who you’re bidding for and what they want to guarantee your services align with, and what you can offer over the competitors.
- Make sure you meet the criteria, answer all questions accurately and follow all directions.
- Make sure your references are recent and relevant to the tender’s requests.
- Be transparent about your costs and explain why your product/service is worth the price.
- Always submit on time, and remember to sign it. Carefully check over to catch any mistakes or missed information before submitting, and if you decide you no longer want to submit, offer a reason why.
- Win or lose, ask for feedback on your bid to learn the strengths and weaknesses for next time. A great way to make improvements on your bids is to ask why the successful bidder got the job over you if you lose the bid. Many head contractors will not offer feedback by default, but many will if you ask for it.
Your bid outside of the tender document
The tender submission process actually goes beyond the actual bid documents, which is something many subcontractors forget. The way you communicate with the prospective client, at every stage of the process, forms their opinion on how well you can deliver what you claim you can deliver. The actual tender is crucial, but every other interaction will also impact your proposal.
Stay friendly, professional, and work to build a good relationship with the client. Even if you aren’t successful in this particular tender, you could be planting the seeds for success on the next one. When meeting the client, always be on time, respond to emails quickly, and show that you excel in your communications.
Sometimes, the decision-making process can come down to the wire, and a better attitude outside of the bid could be the thing that differentiates you from all of the other bidders.
What to focus on in your tender bid?
Most tender review processes have pre-defined criteria, and understanding these will help you know what information to focus on in your bid. Financial aspects are a certainty, but the other evaluation criteria can vary. They are most likely to include some, if not all, of the following:
- Procedure
What construction methods will you use? Will you bring in any specialists or consulting services? What specific resources will you employ to satisfy the requirements of the tender? Buyers love to see examples of similar work to the jobs they are looking to fill, as it helps mitigate risk. If you can provide a well-defined plan and timeline, along with any new methodologies that may improve the outcomes (or better yet, save money), you’ll position yourself as a reliable option that meets the objectives.
- Case studies
As mentioned in the above point, previous experience is a huge factor. Validation will help you win a tender. The frequency and relevance of past experiences are basically essential criteria for a company to evaluate. Companies will leverage reference checks, client testimonials and online portfolios to evaluate your experience as well, so be honest about the work you have completed.
- Proof of quality
Construction quality assurance is the primary element that companies are looking for. Sometimes, a higher value is placed on quality than price, with businesses willing to sacrifice cost and timelines to ensure the best result. Quality is never assumed to be relatively equal, so you need to show why you offer more than the other bidders.
- Delivery timelines
Speed of completion varies in importance but can become critical when a project has an accelerated timeline. If you think you can save time without sacrificing quality, show this wherever possible. Public contracts place less emphasis on speed due to their long project schedules, but efficiencies are always a good thing.
- Sustainability
This may be a newer component, but a growing number of tenders are looking for ways to be more sustainable. Large projects can even have established benchmarks for sustainability and social responsibility. If you have innovative, sustainable solutions to offer, be sure to include them in your bid.
Understanding the competitive landscape
When you know who your competition is and their strengths and weaknesses, it’s easier to explain your Unique Value Proposition.
Your tender exists to persuade the bidder to choose your skills over your competitors’.
This can also be a great way to ensure you are offering a competitive price. While you never want to undersell your skills and value by dropping the price too low just to win a tender, it is important to understand the market’s going rates for the type of work you offer. Your competitors can be a good signal of this.
When gathering and analysing information about competitors, look to understand:
- Strengths and weaknesses
- Strategies
- Market positioning/how they differentiate themselves
- Past performance
- Pricing
In a competitive tender environment, there is no shortage of options. The better you understand the competition, the better you can position your offer.
Accounting for contract amendments
It is important to understand the value of a successful bid past the initial project being awarded. As an example, over the past decade, about one-third of all government contract money has come from changes made to contracts after they were originally awarded. The annual value of these amendments grew from $4 billion in 2012–13 to $28 billion in 2021–22.
This can affect your bidding strategy slightly, as instead of just focusing on winning the initial contract, you should show how you can manage and grow contracts over time. Scalability and proper management of contract changes and extensions are a win for the client, and a potentially huge financial win for you.
What are the top skills for winning construction tenders?
Articulating your value proposition is easier if you ensure it includes the main competencies required for the preparation of construction tendering. These include:
- Communication
We’ve mentioned it already, but it’s a big one; communication must be clear. Effective communication creates understanding and trust. Ensure your proposal is in line with the needs and expectations of the tender and adapt your message to suit the person who will be reading it. The questions asked, and additional information provided with the tender, will give you an idea of how best to do this.
- Organisation
You will likely need to manage more than one task or deadline at a time. You should excel at resource coordination and documentation management thanks to strong organisational abilities. Proposals absolutely must be submitted on time, without errors.
- Proofreading
Attention to detail is a must, so proofread, or have a colleague proofread, your proposals to find spelling, grammar, or consistency issues. Professional proofreaders can be a good idea for large tenders.
- Strategic thinking
Strategic thinking and foresight are a must, as these skills help you identify differentiation. Look at your competition and market trends, run a SWOT analysis (strengths, weaknesses, opportunities, and threats) and think outside of the box.
- Detailing
Every area of your proposal, but especially the main ones like budget estimates and project schedules, must be verified. Triple-check calculations, cross-reference data, and confirm compliance with tender rules.
What are the restrictions and considerations in government tendering?
Government tendering can often be subject to stringent regulations to ensure transparency, fairness, and equal opportunity. Some general government procurement principles must:
- Plan and manage procurement appropriately to meet objectives
- Choose procurement models based on project value, complexity, and market capability
- Minimise unnecessary burden on suppliers
- Encourage innovation and responsiveness
- Ensure competition and contestability
- Run procurement processes efficiently and on time
- Treat all tenderers fairly and equally
- Comply with legislation, policy, guidance, and mandatory requirements
When it comes to the mandatory evaluation criteria, your bid must show:
- Value for money (which is the primary determinant of the procurement outcome)
- OH&S management criteria when:
- Works > $750,000 (incl. GST)
- Construction services > $300,000 (incl. GST)
- Industrial relations management criteria when:
- Works > $750,000 (incl. GST)
- Construction services subject to Fair Jobs Code
- Past performance for similar works or services
Effective communication creates understanding and trust. Ensure your proposal is in line with the needs and expectations of the tender and adapt your message to suit the person who will be reading it.
Keeping up to date and acting fast on tenders
While you should never rush your tender application to a point that you submit a sub-par bid, time is somewhat of the essence. There may likely be quite a few submissions for one project, and after reviewing multiple submissions, they can all blend together. Being at the front of the line can be beneficial.
Along with this, finding the right tender opportunities is crucial. E1 exists to help subcontractors find opportunities, win more work, and build lasting relationships with the builders creating the projects. As Australia’s largest network of construction professionals, we have thousands of tenders from leading head contractors passing through our system.
We help you find and bid on projects that suit your trade, while showing builders your full project history, so you stand out and get more work. Our live updates also keep you in the loop on tender status and document changes. E1 better positions you to win the right jobs, learn more about our service for subcontractors today.
