Tender Clarification Questions – Getting the Tactical Edge!

Clarification Questions (CQs) are a fundamental part of professionally managed procurements and frequently the only way to engage in a dialogue with the buyer once the tender has been published. As with any seller to buyer conversation, especially one where everyone gets to see a transcript of what has been said, it is worth being very clear about what you are trying to accomplish and use  questions to maximise your competitive positioning.

Matters of fact and functionality: The procurement design and operating parameters should be clear. Buyers are busy and errors can creep in, but if these are found and highlighted early and politely it can prevent distress for all concerned later on. Nobody wants to find a formula error in a pricing sheet so late that the timelines have to slip, or recreate images in a different format at the last minute, because the portal can only accept certain file types.

Read every instruction first, before framing your response.  Buyers will be irritated if they have to tell you the answer to a question that is clearly stated in the guidance or has been provided in a previous CQ response.

Open up the opportunity:  Mandatory requirements stipulated within the bid should protect the buyer from the risk of appointing a supplier without appropriate skills, experience or financial stability. However, it is possible that the specifications are disproportionate or too rigid for some, such as Small to Medium Sized (SME) businesses, which the public sector is keen to nurture.

Show that you understand the objective of each requirement, but if you believe that you are a viable supplier, ask whether the criteria could be loosened or what alternative evidence / assurance would be acceptable. Propose something specific.

For example, is the buyer asking for bidders to have 3-5 years relevant contract experience, which your company cannot claim? Consider whether there are people working for you who have this experience, but gained it working within another organisation. Perhaps the buyer could be persuaded that this qualifies you to bid after all?

Some requirements may simply have been inherited from other, earlier tenders and the buyer may be happy to change or remove them altogether if you challenge them.

Balance contract risk and price for the buyer: In the public sector you will typically be expected to sign up to the Terms and Conditions as issued.  Don’t be afraid to counter-propose specific terms or clauses which don’t suit you, particularly if you can see that there might be a benefit to the buyer as well.  For example, expecting suppliers to take on liability for all consequential losses could exclude viable providers or force bidders to buy expensive insurance to cover this.

Tighten the scope: In a loosely defined tender, there may be ambiguity about exactly what is required. This could lead to bidders submitting widely differing proposals with resultant diverse pricing.  Don’t risk losing a bid because one of your competitors has put forward a cheaper, but far less comprehensive proposal. Always seek clarification to ensure that all bidders are pricing for the same things.

You can even phrase these questions to your advantage. For example, perhaps the buyer has stipulated a service level response of 2 hours, which you would need to staff up to support. Could you recommend a 4-hour window instead, which would enable you to deploy existing resources at lower cost?

Signalling intent and competence: Since your CQs will be visible to  buyers and competitors alike, you can take the opportunity to include questions or phrase them with the express intent of either demonstrating your own strengths, or undermining (without naming) others – this is known as ‘ghosting’.

You might want to explore set-up costs such as IT infrastructure or a fleet of vehicles  (an incumbent will typically have lower ones); termination or step-in rights (which could be triggered by a change in a supplier ownership); cyber security credentials (increasingly important); disaster recovery effectiveness or environmental commitment. How will the buyer measure and monitor such activities?

TUPE or not TUPE; Sometimes a contract will involve migrating staff from an incumbent to a new supplier. This must be tackled head-on during the bidding process.   Transfer of Undertakings (Protection of Employment) i.e. TUPE legislation will be relevant in these cases, but the actual costs involved will be invisible to everyone but the incumbent until specifics such as employment contract terms, salaries and pension commitments are requested – and sometimes not even then. These factors might cause your business to qualify out. Alternatively, maybe migrating staff will expand your capacity to help service other contracts.

Clarification Questions – top hints and tips

  • Do not delay or be fearful. There will be a defined window for you to ask questions and for buyers to respond. Some answers may need further clarification so make sure you allow time for this.
  • Conform to the process and respond using the prescribed format and channel. Do not be tempted to deviate from the buyer’s instructions.
  • Access, disseminate and record all the CQ logs so that you can refer to them later, if necessary. Allocate this responsibility to an organised individual.
  • Recognise that while the default will be open publication of responses, normally there is scope to ask confidential questions with appropriate justification.

Buyers and suppliers alike have an incentive to make informed risk and reward decisions. Fuller and clearer information makes for better decisions. Clarification questions remove any ambiguity which is the major benefit for all.