Submitting a tender is common 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.
But 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 applies to customers ranging from your local government or hospital to a central government department.
Even if you don't win the work this time, writing a tender can clarify your aims, strengths and weaknesses and 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 contracts
You can find out about private-sector contracts through:
- building contacts with potential customers
- advertisements in local and national newspapers
- advertisements in trade and professional magazines covering your area of business
- researching contracts outside your business sector which may produce secondary contracts for you, e.g. if a new office block is built, it will need desks, carpets, signage, stationery, cleaning and laundry
- following up press and other reports - a company may be expanding or subcontracting part of a big order
- networking and picking up information from other businesses
You can identify public-sector contracts by:
- following up contract notices published in newspapers and trade magazines
- monitoring online government tender notices. See the factsheet Selling to governments.
More information on preparing tenders can be found on the buyandsell.gc.ca website.
Should you bid for a tender?
Preparing tenders can help you to win big orders, but it can also 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 you need to carefully weigh up whether or not a tender is worth bidding for.
Key points to consider
- Get hold of the bid documents and analyse them.
- Make sure you can match the technical, skill and experience requirements.
- 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? Try to understand things from the client's point of view.
More information on preparing tenders can be found on the buyandsell.gc.ca website.
Find out what the client wants
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 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.
More information on preparing tenders can be found on the buyandsell.gc.ca website.
What to put in your tender
Make sure you match the bid specification and answer all the questions.
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 document
- 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. 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 wages for staff who could be working on something else.
- Consider the possibility that certain information filed in connection to a tender could be subject to disclosure under the Act respecting access to documents held by public bodies and the protection of personal information.
- 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've thought about - and can manage - potential financial, commercial and legal risks that could cause contract failure.
- Give details of your team. Emphasise strengths - CVs should highlight successes with similar projects as well as qualifications and experience.
More information on preparing tenders can be found on the buyandsell.gc.ca website.
Writing your tender
Once you've 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 the client's aims will be achieved
- 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 without promising what's 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 Act respecting access to documents held by public bodies and the protection of personal information. This gives anyone, including your competitors, the general right to see information held by public authorities - including the information in your tender.
More information on preparing tenders can be found on the buyandsell.gc.ca website.
Tips on editing your tender
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 businesslike.
- 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 standardised. Are CVs all presented in the same way?
- Be careful when cutting and pasting copy to make sure the format stays the same.
- Make sure you've developed a logical argument and that everything hangs together.
- Read everything again. Then get a colleague to read it - 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.
- Include a contents page.
- Number paragraphs and provide a contents page so material can be easily located.
- Consider getting it printed and bound professionally.
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. Alternatively, contact the organisation to check they have received it.
More information on preparing tenders can be found on the buyandsell.gc.ca website.
Original document, Tender for a contract, © Crown copyright 2009
Source: Business Link UK (now GOV.UK/Business)
Adapted for Québec by Info entrepreneurs