The tender trap
After the launch of the BLSA, and the commitments made by big business to entrepreneurs, it sparked a train of thought about the intentions of big business in the tendering process.
It got me thinking that over the last year, many entrepreneurs have spoken to me about tenders and the tender procedures from public and private big business that were issued, but not implemented. Why is this? Could it be because of flexing budgets? After all, operational needs do change.
I know of entrepreneurs who have been asked to submit tenders only to be told by the relevant companies that they will do the job themselves. In my view, that’s a form of corporate theft because you’re drawing the best of thinking from that entrepreneur – so they must pitch harder to big business. Many of the tender procedures could be “fishing expeditions” by corporates for
the best of the smart business intelligence of possibly, people who have worked for big companies, gone out to work for themselves and are pitching for the business.
Then there are those entrepreneurs who responded to tenders only to find it was there to help a certain division in the business build a budget. This leaves you with questions about why this is so. How does an entrepreneur assess if the tender is a valid one?
Here’s what business owners can do to protect themselves:
Ask questions and become familiar with the tender procedure. If the procedure is unclear or not supported by strict terms, conditions and timelines, be wary.
Be aware of a tender that has a shortened process or one that misses out the key logical steps in the procurement process. If the company for example has not clear procurement policy and issues a tender with a 3 day response time, you might just be part of a procurement compliance exercise.
If the specified scope of work is unclear or has many variables to it, this could indicate that the procurement team has not scoped the work internally nearly sufficiently and this will most likely lead to a failed procurement process.
Buyers beware of these clauses often found in tender documents.
If the company says: “You can submit the tender, but please be aware that your ideas will become our property.”
Fixed prices – but you must submit to a price that you will roll out over the next five years.
If you respond to a tender, what people say they need and what happens when you implement, are two very different things.
Unless you can negotiate a variance order in your tender, be careful of scope creep (continuous changes or uncontrolled growth in a project’s scope after its start).
Who is the company and what has it done before?
Has it issued tenders before and did this translate into work?
What is the reputation of the company? Has it ever been involved in corruption?
We work with hard-working, invested entrepreneurs and this type of activity can make or break a business. Forewarned is forearmed so when tendering for business, do so you’re your eyes wide open. In all instances, you must remain focused on your goals of growth, sustainability or profitability to guide your decisions about what work they’re willing to take on.
If the golden goose seems too good to be true, question it over and over until you are sure it is the best move for you. Your business is your asset of value, we will work with you to ensure you are growing your business in the best possible way.