The collapse of Carillion (the UK’s second largest construction company) on 15th January 2018 was a disaster for its staff, sub-contractors, suppliers and shareholders. It will have significant impacts for many of its clients. But to quote Winston Churchill, “Never let a good crisis go to waste”. Andrew Morrison examines how a crisis can, and should, provide the catalyst for new thinking, new approaches, perhaps even root and branch reform of a creaking system.
The “subbie bashing” culture that appeared to be going on with Carillion has been shown up to be not in anyone’s best interests – even the big players! I know many successful SMEs who are keen to be first-tier contractors rather than operating further down the food chain at wafer-thin margins. They would also settle for being second-tier to main contractors who don’t want them to embark on a race to the bottom on price and quality. Main contractors can demonstrate their good faith by adopting the Prompt Payment Code – payment within 60 days and working towards adopting 30 days as the norm.
Whilst the procurement landscape has ostensibly never been more open to SMEs, there are a number of key actions that SMEs can take to optimise their prospects of success in competitive tendering.
First though, SMEs need to decide what type of contractor they are. For example, if your business was a supermarket, which one would you be? All supermarkets sell food, yet there are large variations in terms of quality and service, and hence also in prices and profit margins. Match your pitches and bids to buyers and main contractors who are looking for what you offer. If you have decided that you are a “Waitrose”, then don’t enter 80% price 20% quality contests.
Next, is to ensure that you are appointable to a risk averse public sector buyer or the procurement department of a main contractor. If you want a seat at the big table, then it will usually mean having at least the following in place:
- Accounts filed promptly at Companies House
- A good credit rating (preferably above 50/100)
- Insurances to the required limits
- Access to a parent company guarantee or performance bond
- Full set of policies and procedures covering your operations
- Quality Management System (preferably ISO 9001 accredited)
- Environmental Management System (preferably ISO 14001 accredited)
- Occupational Health and Safety System (preferably OHSAS 18001 accredited)
- Health and Safety Assessment Scheme membership – of SSIP member scheme (e.g. CHAS)
- A strong track record of excellent health and safety performance (RIDDOR stats are important)
- GDPR compliant processes and systems
- Robust supply chain management arrangements
- Business Resilience / Continuity Plans
- Case studies, testimonials, references for similar work
So, you’ve got all that in place – what’s next? Now, it’s time to work on your bid. Tendering for work in the public sector will require an investment of time and it may also be wise to get an external bid specialist to assist you … more on that later!
Here are some steps that you can take to create a winning bid:
- Read all the buyer-issued documents carefully
- Attend any meet the buyer days or tenderers meetings
- Arrange an organised bid kick off meeting bringing the key people together who will be working on the bid
- Consider client ‘hot buttons’ as well as your USPs and differentiators
- Give thought to managing risk, innovation and added value
- Knit all this together into bid win themes and bid promises
- Have a “good to go” solution
- Use clarification questions to check understanding e.g. of specification, pricing and bid response requirements
- Gather information from your subject matter experts
- Build a “straw man” to stress test your solution
- Have a disciplined bid management plan in place with clear responsibilities, deadlines and escalations … and stick to it!
- Allow enough time for critical bid review
- Involve a number of people in checking the draft submission and verifying the upload arrangements
- Do not leave your submission to the last minute – uploading 24-48 hours before the deadline is recommended
- Capture lessons learned even before you get the result
- Win or lose, ensure you get detailed feedback