Credibility Beats Price Hands Down

An organisation’s credibility will win or lose a bid

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This may be a little controversial for those seasoned commercial bid managers but I believe an organisation’s credibility will win or lose a bid.

There is a common perception in bid land that 80% of bids in the public sector are won or lost on price or your ‘value for money’ proposition.

In the private sector the perception is not as clear and there does seem to be more opportunity to win on innovation and quality rather than price alone.

Most of us know that there are a number of criteria (other than price) that contribute to a positive decision to award a government contract to you e.g. compliance, risk, deliverability and quality. These seem to be the first ‘hurdle’ or what I term the ‘bid compliance’ elements – if you can’t meet these you won’t get to the table to talk about price or value for money.

A number of sources, including a wonderful research paper by Grichan Business Winning Services confirm that the following elements contribute to an unsuccessful bid:

Offer

  • Robustness of claims
  • Poor pricing strategy
  • High pricing – not value for money or competitive
  • Low pricing – abnormally low pricing raises questions about your ability to deliver
  • Poor solution innovation
  • Unable to demonstrate can deliver a superior service or product to others that bid
  • Poor internal processes

Bid Management

  • Poor bid skills
  • Poor compliance with the tender requirements
  • Quality of bid documents/dysfunctional bid team
  • Quality of supporting documents

Reputation and Ethics

  • Weak strategies and/or leadership
  • Poor customer perspective
  • Lack of competitor focus
  • Complaints from rival bidders
  • Financial capability – poor financials and track record, rumours in market etc
  • Prior performance e.g. failed to deliver on previous or similar contracts/poor reputation
  • No track record working with public sector
  • Unable to produce referees and examples of success in delivering the scope of work

I won’t go into each of these areas except to say that it’s interesting that the issues identified seem to fall into three distinct areas – Offer, Bid Management and Ethics and Reputation (Credibility).

It’s true that each of these areas are important when submitting a bid response and that if you fail in one area you fail overall. However, I don’t believe that all are equal.

Take this scenario – you have a good reputation and competitive offer and are well known to the client (wink, wink). It’s feasible that you could get over the line with a poor bid process and less competitive price. The value of being known to the client cannot be underestimated and an internal ‘coach’ can go a long way to getting your bid approved (a subject for another day).

In the alternate, consider this scenario – your credibility is poor and your ethics and reputation are questionable. I guarantee you will not get to the table to discuss price and all the effort to put together a professional bid with bells and whistles and pretty pictures, a low price and lining up your internal coach will not save you. Why? Because poor credibility creates risk for the tenderer, particularly public sector organisations.

If you are thinking about getting into bidding for government work, look towards your market credibility. What do you clients think and say about you? What do your own people say about you? What evidence can you produce that will demonstrate your effectiveness and credibility? If you ‘Google’ your business and your senior executive team what would the good doctor find? This is how bids are evaluated. Not just against assessment criteria but against your credibility.

How’s your business credibility? Would it stand up to public scrutiny?

By Brenda Stephens

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