OK, you’ve decided to tender for a government contract. But before you begin, do you know exactly where your business sits in the supply chain?
In simple terms, a supply chain comprises all parties who either directly or indirectly fulfill a customer’s request. Governments at all levels are always keen to bring into their list of suppliers new organisations which can meet their exact requirements. (Take special note of that word ‘exact’, by the way. Government tenders ask for specific information in a very specific format and any bid which doesn’t comply is automatically rejected.)
What do government departments look for?
In essence, the government wants a supplier who can deliver the goods, literally and figuratively. Two crucial questions they ask when assessing bids are:
- Will this supplier deliver in full and on time (DIFOT)?
- Does this supplier represent value for taxpayers’ dollars?
From the government’s point of view, they’re keen to deal with one key supplier who can either provide all the goods and services they need or who can subcontract out to other suppliers who can.
Obviously, all departments need to keep costs down, but at the same time the government has an obligation to get the best value for taxpayers’ money, so this doesn’t mean they will automatically award a tender to the cheapest option. There are many other cost and non-cost criteria which make up their definition of the word “value”.
So, where does your business fit in and should you put in a government tender?
The government department is the project owner; they are at the very top of the supply chain and there can be many levels underneath. Their relationship will be with the main supplier only, sometimes called a “Tier 1 Main Supplier”; this is the one company they’ll be dealing with for every aspect of the project at hand. If your business isn’t such that you could be considered as being “Tier 1” and you can’t supply to the levels required by the stringent parameters of the tender, then you won’t be considered.
But all is not lost. Being in a lower tier doesn’t mean you’re knocked out of the process altogether. Your energies can now be channelled into sub-contracting to a main supplier. So do your market research, keep up to date on who is winning tenders and set about making your business proposition attractive to them.
That way, you’ll still be in on the action.
For more insight into government tenders, watch our quick video: How to write a winning government tender