How Tendering Works – Our Frequently Asked Questions

Last updated: Jul 11, 2022 @ 2:38 pm

You may be wondering how tendring works and you’re not alone. Some common questions we get are: “So, how does tendering work?”  

“Why does it matter to my business?”  

“Would an SME stand a chance?”  

“Isn’t it just for the big players?”

“Would tendering benefit my business?”

These are all common questions that, as tender writing consultants, we have been asked by businesses who are unsure about: a) how tendering works and b) if tendering is suitable for them. If these are questions that you have asked yourself before, then read on for a clear and comprehensive response (without going too deep into the whys and wherefores of tendering) to these queries:

How does tendering work?

In short, tendering is an opportunity for Suppliers to ‘bid’ on a contract, by submitting a combination of pricing and responses to quality questions. Ordinarily, the Buyer will construct their tender by:

• Developing a specification or general requirement.
• Setting out Supplier requirements (e.g. the minimum Economic and Financial threshold, mandatory accreditations or required experience).
• Developing a set of quality questions to be answered by Suppliers as part of their tender response.
• Establish specific rules, or instructions (e.g. where / how the tender must be submitted, how the tender should be formatted etc).
• Setting down the evaluation criteria (e.g. it will be assessed through 60% quality and 40% price). This is commonly referred to as souring the MEAT (Most Economically Advantageous Tender). For a full explanation of MEAT and how it works, have a look at this short tutorial video.
• Deciding the contract type (i.e. one-off, term or framework).
• Agreeing the tender procurement process, which can include:
  • PQQ/SQ stage (Pre-Qualification Questionnaire / Selection Questionnaire)
  • Shortlist to ITT (Invitation to Tender).
  • Site Visits (where appropriate for the sector).
  • ITT Submission.
  • Presentation.
  • Contract Award.

Once the Buyer has finalised all the details of their tender, they will release it out into the public domain, through a tendering portal such as ProContract, Intend or Delta eSourcing (this applies to the Public Tendering domain, for information on how things work a little differently in private sector tendering, check out our video on the subject).

It’s at this point that tendering starts to matter to your business.

What happens next?

Once the contract notice has been published and you see that a contract would be perfect for your company, you have a (usually small!) window of opportunity to respond. There are a lot of things you can do to make absolutely sure your business is capable and ready to try and win a particular tender. But for the purpose of this exercise, let us assume that you know that your company has the experience and meets the economic and financial threshold. Why wouldn’t you take this opportunity?

It’s a good question, and one we at Hudson find ourselves asking quite a lot of the time. There are thousands of SME businesses who could be tapping into the valuable market of tendering and who simply aren’t. We think that’s madness. The matter of fact is, many are still wondering how tendering works. This is an excellent way to win contracts with big companies and public bodies, meaning you have the potential to increase your company’s turnover and profit year on year.

So, why are so many SMEs doing themselves out of this golden opportunity?

Well, we have a few theories:

• Misconceptions

A lot of SME businesses seem to think that tendering is just for the ‘Big Players’, i.e. companies with turnovers in excess of £5M+. Whilst it is true that these companies definitely tender (pretty successfully too, we can assume) it simply isn’t true that tendering is set up for these companies and nobody else.

The UK Government is trying to encourage SME businesses to get into tendering, to help UK small business grow and to help improve the quality of businesses on offer for Buyers. The Government is committed to delivering a third of all public procurement spending to small and medium companies by 2022. That’s £1 in every £3 going to small companies through direct and indirect procurement.

• Lack of know-how

Unsurprisingly, a lot of SME businesses just don’t know how tendering works, which isn’t in and of itself that surprising. How tendering works isn’t a topic covered very much in general media or news. Plus, once people do learn about tendering, it can look pretty dense and unwelcoming to the uninitiated, which must be off-putting to even the most ambitious of small businesses. (If this is the case for you, check out our online learning resource, Tender VLE, for some guidance).

• Limited resources

This is one area in which, admittedly, the big companies have a clear and distinct advantage. Whereas a large outfit will almost definitely have their own internal bid writing resource, smaller companies don’t tend to have that luxury. Companies trying to get started in bid writing are trying to balance it against their daily tasks and duties. This can be stressful and ultimately not very conducive to success.

All of the above applies to my business! How do I overcome these problems?

The good news is that you’re definitely not alone in wanting to figure out how tendering works. The great news is that there are some very simple things you can do to overcome those three road-blocks to success.

• Fix your misconceptions

If you have a good think about it, you’ll probably find that most of what you think you know about tendering is not very substantial at all.

Do your reading and research and you’ll find that there is a whole Government Initiative with the sole purpose of improving opportunities for SMEs in the UK, and that tendering is a significant part of that. The Government is a great client to work for. They are constantly providing tendering opportunities for businesses like yours no matter what business you do. As an added bonus their payment terms are often more flexible and accommodating for small businesses. They have incentives that are making more and more SMEs looking for the answer to how tendering works.

As of 2015, the Government mandates that companies within its supply chain must pay contractors and sub-contractors within 30 days. Governments also regulate themselves to ensure this, making public their payment rates four times per year. This ethical business practice means less risk to you throughout the contract.

Tendering is definitely not just for enormous companies with glass-walled conference rooms and beanbags in a riot of colours. (Though we concede that those things are very nice, and who knows? They may even be a happy consequence of learning to tender successfully).

• Work on your knowledge on how tendering works

Diving into tendering head-first would not be a good idea. But, setting aside some time to educate yourself on how tendering works and how you can best prepare yourself is a worthy use of your time. A Google search of ‘how tendering works’ will bring up more results than you could ever look at. A good place to start is right here, on our Tender VLE site, where you can watch short (free!) instructional videos on the basics of tendering.

Many people see tendering as an impenetrable, expensive exercise in bureaucracy. So, we’re very proud to be the first company in the UK to offer a free learning resource to help demystify procurement and show people just how tendering works (we promise it’s probably not quite as impossible as you might think it is).

• Outsource if you don’t have the resource

Now, it might be that between you and your other team members, you can pull together a tender in a reasonable amount of time, without too much stress and not too much risk of missing anything vital.

However, this is where you have to ask yourself; “Is that is the best use of the resources that I have?” The answer is very likely, “Not really”. Putting a high-quality tender together is a time-consuming task (even for those of us that do it full-time). So, how much of your teams’ intended delivery-output compromised by trying to win more work through writing a lengthy tender response?

So how can SMEs bid for, and win tendering opportunities?

Tendering for business is a lot more simple than it used to be. This is thanks to the Public Contracts Regulations which came into effect in February 2015.

This means two things:

• The changes enable buyers to run tender opportunities faster, with less red tape. There’s a greater focus on getting the right company and best tender in accordance with sound commercial practice.
• The buyer must follow the procedures laid down in the Public Contracts Regulations before awarding a contract to suppliers when they are tendering for a contract to provide supplies, services or works for government departments or bodies.

Both of these are great for you because:

• It means there are more tender opportunities available more of the time.
• Every tender has to be unbiased, which means a fair fight across quality and price tender assessments.
• The tender process is similar no matter which governmental client you bid for. This means that once you know how it works, you can tender for business across every government department, body and business area.

Finding tenders

Having plenty of tender opportunities out there is a great thing. You can search for public tenders using the Contract Finder service on the central Government’s website. However, Hudson appreciates that sometimes finding the right tender for your business can feel like a waste of time.

We offer ways to avoid that hassle.

Hudson Discover has a range of tender databases designed to support SMEs to start the tendering process. We help you achieve business growth and begin to tender.

We have 11 sector-specific tender databases which our expert team manually update daily with new opportunities to ensure you can find the right tender to drive your business growth. These are:

• Construction Tenders
• Consultancy Tenders
• Creative Tenders
• Facilities Tenders
• Finance Tenders
• Hospitality Tenders
• HR Tenders
• Logistics Tenders
• Research Tenders
• Technology Tenders
• Healthcare Tenders

Applying for government tenders

Making the decision to tender can lead to securing business growth, and this is good news for your company. But it does mean you’re going up against other companies.

To give your business the best chance of winning every time you tender, here are a few tips:

Sign up to receive regular tender opportunities.

It can be hugely disappointing to hear your competitors have secured a contract you could have tendered for; if you were aware it was available.

Understand the tender terminology

Knowing how tendering works and the tendering language can help you develop your skills. Hudson’s expertise is available to help you understand what the different tender documents are for, and what buyers are expecting.

Get Tender Ready

Creating your own collection of tender documents will help your business get ready for tendering in the future. Hudson Succeed’s Tender Ready service is designed to help businesses understand how to tender for public and private tender opportunities. We can create a suite of documents for your business to build your tendering ability and increase your success rate.

Develop your writing ability

Writing bids can be a daunting experience. There are word limits, page limits, attachments and declarations to consider as part of each tender. But don’t worry, there are ways to practice, learn and develop your tendering skills.

Hudson are the first company to offer a completely free to use resource dedicated to developing your skills. We launched Tender VLE to offer FREE high-quality video resources at a range of levels to support your ability.

Don’t be afraid of learning how tendering works, embrace the potential for growth it offers.

Invest in long term growth

One mistake that SMEs make is thinking short term. Making the decision to tender is not a short term commitment. It can take weeks to write a tender, months to get the contract, and years to deliver the works and see benefits.

If you decide to tender for opportunities you need to make it a core part of your business plan in the long term and commit resources to make the most out of it.

Don’t give up

In truth, you will more than likely not succeed at your first tendering attempt. Do not give up! Ask for feedback from every tender you submit. Clients will be happy to provide this to help you improve.

Conclusion

As always, there is no ‘one size fits all’ response. Every business is different, and you have to weigh up the pros and cons and decide what is best for your business. If you are able to accommodate tender writing within your team, then it would be worth your while to get professional feedback on the first few tenders that you write to make sure that you’re using your time wisely (our Tender Ready and Tender Mentor packages could come in handy for you here).

Further Support

If you can’t see a way to write your tenders internally at all, then don’t despair.

Contact our Hudson Succeed team via phone for email for a free consultation; we promise there is no such thing as a silly question and we’ll never tell you to pursue a tendering strategy that simply won’t work for your business.

Our Bid Writers can help you when tendering for contracts. They can advise you on writing winning bids and give you more information about the tendering process in general.

We’ll do our best to help you understand all of the ins and outs of how tendering works and, if Tender Writing is what you’re interested in, we’ll do everything we can to help you succeed.

Find more helpful tips and advice in our blogs. We cover topics including:

• How to win a tender
• What is a Bid Writer?
• The tendering process
• Writing winning bids
• 7 tips for tendering for contracts
• Tips for bid management
• Bid writing services
• The types of tendering procedures
• Writing bids
• Bid writing consultants
• Submitting a tender response
• And many more.