No offers to the tender
No offers received in response to the invitation to tender in the private-law (RfP) or public-law (Submission) environment? This is not only disappointing, but usually means lost time and additional costs. In extreme cases, it can even completely disrupt a critical project.
HiTect is a construction supplier with around 80 employees at two Swiss locations and would like to completely outsource its IT operations. Corresponding RfP documents were carefully and extensively prepared and checked for "marketability". Nevertheless, no offers have been received. The CEO is surprised and asks himself "where did we go wrong?
What is the reason?
The reasons for the "no bid" must be analyzed on a case-by-case basis. Typically, however, one or more of the following aspects are overlooked when conducting an RfP or submission process:
- The market for IT services currently tends to be determined by the providers: These do not have to accept contracts with too many compromises - on the contrary: providers have a feeling for "attractive" tenders, namely those which ideally offer long-term contracts, prestige and deployment opportunities for their core competencies.
- The preparation of a bid costs bidding companies a great deal of time and resources, for example in studying the documents, preparing the bid, and internal review processes. On the other hand, it is often uncertain whether all this is worthwhile - because there is usually only one winner who is awarded the contract.
- The situation is similar when suppliers cannot estimate the contract volume awarded, or can only do so with difficulty, for example if no or only low binding minimum sales or only reference quantities were put out to tender. The effort for a bid must be worthwhile, at least the chances must be right.
- The subject matter of the procurement is described in a (possibly unnecessarily) rigid manner and restricts the providers in their choice of solution methods, so that they cannot optimally offer their core competencies and preferred solutions. In the worst case, the procurement object is specified in a very detailed form, which is no longer up-to-date or misses the market.
What can you do at the RfP?
Fortunately, in the private law environment, it is possible to at least partially eliminate these causes, thereby significantly reducing the risk of a "no bid." Some measures are listed below:
- Make RfP documents manageable and readable: The time until the basic decision ("to offer or not?") must be short, offers should not fill federal folders.
- Focus on the "what" rather than the "how." The need must emerge from the RfP documents. For the choice of solution, the providers should be given as much freedom and flexibility as possible in terms of implementation variants. A balance is required here between flexibility and simultaneous comparability of the offers.
- Inform early and get feedback through an RfI: Communicate the most important information and ask key questions to the market. This can save you some surprises.
- Create transparency: Communicate the selection process (see graphic below this section) and make it clear that you would rather have three suitable offers than ten random offers. The smaller the group of competitors, the higher the perceived chance of the individual provider.
- Involvement of potential providers: Use Q&A to incorporate opportunities for improvement and other ideas. Encourage providers to contribute suggestions.
- Courage to be "agile": If the results (e.g., number of vendors still "in the running") are different than expected, a change of plan is also legitimate. Invest time and resources to repeat one or more steps in the "selection funnel" shown below.
What can you do in case of a submission?
Additional rules and restrictions must be observed for procurement projects under public law.
- Submissions are more binding. Changes of contents and processes are only possible to a limited extent. Some is possible via "corrections" in simap.
- Comparability of offers: This is not only about fairness and correctness, but the evaluations must be documented in a comprehensible way and be robust against complaints.
- Uncertainty as to who will offer everything: The selection of suppliers is not made by the procurement agency, but by the market. This requires special foresight and a good understanding of the market.
- The limited communication between the procurement agency and the suppliers makes informal exchanges difficult in general, and clarifications after the deadline of the supplier questions in particular. In the case of complex procurement objects, a dialogue procedure can be carried out at best. Basically, there are two ways to deal with this: Anticipate as many questions as possible and specify them in detail - or give a lot of leeway. Incidentally, an RfI is also possible for public procurements - via simap "advance notice".
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...and if it has already happened - i.e. if no offer has been received?
If no offer is received after the offer deadline, there are several options.
- In any case, the reasons for the respective rejection should be determined. Providers will have a vested interest in revealing these. This is because any feedback from their side can be incorporated into a revised RfP, which may then be attractive enough for an offer.
- An internal "lessons learned" event should be held and the RfP documents adapted accordingly - both in terms of requirements and methodologically and in terms of scope. With these revised documents, in which the providers recognize their own input, a second tender round can then be carried out, if necessary with additional providers.
There is less flexibility in procurements made under procurement law, but there are opportunities here as well:
- It is certainly least attackable to cancel the procedure in the "no bid" case. Furthermore, this offers the most possibilities for further action and there is no time pressure (at least not due to the submission procedure).
- It is also advisable to do a "lessons learned" as described above .
- Thereafter, the basic options are to retender, to award by private treaty or to retender based on the original tender.
And what did the CEO of our company HiTect do? He contacted selected companies with his evaluation team and revised the RfP documents based on their input. In the end, he received three interesting offers and selected from them a provider that was a very good fit for the company. He now has a checklist for future RfPs and is convinced that he will continue to receive good offers in the future.