Nailing Down Construction Contracts

Construction Contracts

Danny Alexander, the Chief Secretary to the Treasury has recently stated that The National Infrastructure Plan (NIP) for the next 20 years will include an investment of £375bn in construction and civil engineering projects. In addition, the insurance industry also plans to spend £25bn over the next five years.

Tendering for the projects included in this investment will be fierce and winning the contracts will go beyond merely attempting to undercut the competition with price. The successful bids will deliver a proposal that highlights how your organisation can offer the best solution, inspiring confidence that you can deliver on budget and to programme, with innovative and sustainable solutions.

Stand Out From The Crowd

When attempting to bid for contracts within an industry as competitive as construction, it’s essential to differentiate from the competition to ensure that your bid stands out. By examining the core competencies of your business and its competitors, Win that Bid can identify, develop and isolate the key reasons why your business is better than the rest.

It’s All In The Details

In order to maximise your success rate on the bids your company decides to submit, it is essential to examine the requirements, and ensure that each question and its required detail is addressed. From the initial planning through to the drafting and review of each response, a detailed Bid Management Plan is a key element of a successful proposal document. The Plan will assist in mapping out your plan to meet the client’s needs, and will also functions as a visual demonstration to the client that all of their requirements have been met.

To be successful with your bids, being thorough is non-negotiable as it is very easy to miss vital elements of a question. However, bids do not always arrive at the right time from clients. You could be busy with current contracts, have insufficient resources or just not enough time, but if it is a targeted bid, you still need to complete the documents professionally Win That Bid specialise in giving businesses the resources and extra capacity to get a winning proposal put together in time.

Match Your Capabilities

It’s important to remember that the bidding process is a two-way street and, as much as a client may get to choose which company to employ to develop their project; the client must also be a good fit for your business. Whilst it is wise to focus your efforts on bidding for contracts that concentrate on your strengths, it is tempting to try and diversify your portfolio. It is important to select the right schemes to avoid wasting your time and potentially leave you with less business.

At Win That Bid, our APMP qualified team are experts in the bidding process and our Project Intelligence team identify projects that are an ideal fit for our clients. With extensive experience in construction and civil engineering projects, we can help your company secure your next construction contract and benefit from the significant planned investment.. As the UK’s biggest bid writing and tender process specialists, our experts can prepare and write proposals that are proven to win contracts for both UK and international projects. Get in touch for more information by calling 020 3405 1850 – and visit our site to learn more about our bid services.

Laying the procurement pipeline

New information has emerged from the Cabinet Office describing the £84bn ‘procurement pipeline’ planned for the next five years. Covering 18 business sectors, the pipeline lays out the government’s anticipated project needs over the next few years. Notices of this kind have been published since November 2011; the most recent announcement adds professional services, financial services, waste management, and fire services.

The government’s goal is to make it easier for companies to plan ahead, something that has traditionally been difficult for organisations working with the public sector. Skills gaps can be identified and dealt with earlier. Moreover, it is evidence of a laudable transparency in government spending that can only help improve processes and efficiency.

Back in April business secretary Vince Cable laid out the reasoning behind these plans. “Frankly, we’ve been too short-term in how we’ve done procurement in the past. Our key competitors in Europe already see procurement as an integral part of a proper industrial strategy and it’s time we did the same.” Recent procurement scandals and political rows have made it difficult for the government to prove it has any kind of industrial policy at all, and rather overshadowed the wave of initiatives, ideas and proposals streaming out of the cabinet office.

This initiative comes at a time when many businesses reliant on government contracts (especially those devoted to major infrastructure projects) are struggling. Construction giant Balfour Beatty recently issued a profit warning based on a dearth of major schemes, while a former Laing O’Rourke executive recently told the press that lack of infrastructure investment and planning in the UK would lead his ambitions elsewhere. Infrastructure schemes have fallen by half in the year to October, while £3bn of construction work is behind schedule or even entirely halted as a result of planning appeals. Friends and colleagues in the construction sector have sitting around waiting for suitable bids to emerge.

The Pipeline can give companies time to plan ahead which they might not have had before. Win that Bid’s vast experience in a number of sectors can help you make best use of that time, to be ready to grab the opportunities ahead.

Mysteries of the Cabinet Office

Over the last year you may have seen mentions in this blog of the Cabinet Office’s “mystery shopper” initiative, an enterprise that offers businesses the chance to ‘shop’ bad public procurement practice.

They’ve finally released their first progress report, and it makes for fascinating reading.

They’ve investigated over 300 complaints. Of those grievances:

  • 81% of all cases raised issues with the procurement process.
  • 38% of complaints concerned the problems faced by SMEs in dealing with very complicated (and long!) PQQs.
  • Unachievable financial requirements were repeatedly cited as a major problem for SMEs.

The Cabinet Office claims to have been able to bring about a positive change in 4 out of 5 cases investigated. Among the successes they cite: reducing the required insurance levels for a British Council contract by 50% to 90%, settling invoices left unpaid by Imperial College Healthcare and working with the Eastern Shires Purchasing Organisation to smooth their procurement process.

Tender specifications came up for special criticism, either for being too complex or too prescriptive. Problems with insurance requirements were a repeated issue. Several cases (usually involving NHS trusts) required companies to have required insurance at the time of bidding, rather than in time for the contract itself. This was one area in which the Cabinet Office was able to make changes.

7% of issues dealt with the contracting process after the bid. A lack of clarity surrounding the end of contracts was something flagged up for attention. Other issues involved e-procurement systems. In one case, two companies with very similar names submitted similar bids, resulting in one company being entirely ignored.

The mystery shopper programme is one of the more realistic initiatives to have come out of the Cabinet Office under the current government. Unlike more top down initiatives it can respond to specific process problems quickly, sometimes during a live bid.

The Public Procurement process can be deeply intimidating for small companies with limited resources. However, in the event of unfair or dubious decisions there are recourses SMEs can take, the mystery shopper programme included. Win that Bid’s consultants have lots of experience on both sides of the fence: we can help you make the best decisions.

Processing your Proposal

Submitting a winning bid is an enormous task. The method statement alone might consist of 10 or 15 different documents and dozens of appendices. The final process of assembling a tender proposal often involves an enormous deluge of information, emails and revisions, during which time there isn’t time to stop and think. This is one of the reasons it is so important to take stock after the proposal for the tender opportunity has been submitted.

How effectively did the team work together?

Even when the bid writing team is working well together, there can be problems which effect the creation of the tender proposal. These often involve lines of communication, especially during the review process. It is important to ensure that the team is aware of where their different responsibilities lie. Creating checklists and document folders available simultaneously to the entire team can be a great help.

How effective was communication between the bid team and other people involved?

During a large proposal the bid writing team may well have needed a great deal of technical information for method statements or financial documents. A delay here can be a real bottleneck in submitting the final tender proposal.

Again, problems here can often be down to failures in communication. After submitting the tender proposal, discuss where those problems occurred and what can be done to ameliorate them later.

What can be done to improve on the process?

There will be times during a bid where you will wish you had done something in a different order or used a different method. During the final assembly of the bid there often isn’t time to implement that change.

After the bid, note down the problems that occurred and the solutions that came to mind. Take the chance to update your internal process documents or create a checklist of things to assess when going for the next tender opportunity. Win that Bid can help you assess your processes to make them even more effective.

Get Tender Ready with The TROC button today

What Does It Mean?

Get Tender Ready with the TROC todayCompanies that have passed the TROC (Tender Readiness Online Check) or otherwise prequalified to respond to large private or public sector invitations to tender may display this symbol.

What Does It Mean For Tendering Authorities And Procurement Officers?

Public Sector organisations should look for this symbol on SME company websites, because:
  • An SME company displaying THE TROC TENDER READY symbol is indicating that it has met the minimum criteria qualifying it to respond to a Public Sector tender
  • This means that the tendering body can confidently approach the company and invite them to participate in a procurement exercise.
  • Looking for the TROC TENDER READY button will help tendering authorities to meet the Government’s aspiration that ‘25% of public sector contracts should be awarded to SMEs’.

The TROC Tender Ready symbol is a private sector initiative, with no government funding or taxpayers’ money involved.

Companies who have successfully completed and passed a Public Sector PQQ or won a contract within the last TWELVE months should contact info@procurementconnection.org.uk to get their badge and press pack.

It’s up to the both the Private and Public Sectors, as well as the press and other media organisations, to raise awareness of the TROC Tender Ready symbol: it will help procurement officers to identify ‘Tender Ready’ busineeses and therefore help more SMEs to win Public Sector contracts.

Knocked out at PQQ stage? Learn how to get feedback

Writing a tender for the vast majority of public tender contracts in the UK will involve filling out a PQQ. There are plenty of suppliers eager to fill those tender contracts and so the contracting authorities use them to keep the number of tenders they look at manageable. This can raise problems for suppliers that we’ve discussed before.

However, even if you do provide everything requested by the PQQ , it’s still possible to get knocked out at this early stage. It isn’t always easy to find out why you’ve missed out on a contract at the tender stage, let alone the PQQs.  For this reason it is important to know what the regulations are.

Regular 29A of the Public Contracts (Amendment) Regulations 2009 states that a contracting authority must notify an applicant of exclusion from the process. Regulation 32 then clarifies that the contracting authority must provide reasons for this decision, including details of why successful candidates progressed.

It is important to ascertain what went wrong in a failed PQQ so you can use that information the next time you find yourself writing a tender. Win that Bid can help you analyse the feedback you received and help you seize the next opportunity.

Two Stage Tendering for Destination Builds

Perhaps the most crucial factors contributing to the success of a destination builds (tourist attractions, hotels, restaurants, head offices) are location and design.  Once chosen, there’s not much you can do about location.  Design however, is a different matter.  Not only does it cause challenges throughout the initial fit out, over time the building will need to re-design to keep up to date.

There are four main methods of procurement and central to each is the responsibility of design.

1) Construct Only: This method sees the developer appoint a design team which will control all areas of design until the project is finished.  Once the design of the building is completed the developer will tender for a construction team.  This tender will be solely for construction duties and as bidding is for a finished design, tenderers can bid a lump sum.  The main advantage of this procurement process is that the developer retains control of design, vital to the owners. The contractor is also taking on less risk than a project that may still change so costs can be driven down.  However, this step by step process demands a lot more time than ones where building and design can overlap or coincide.

2) Design and Build: Design and build procurement involves the developer having their own design team which will begin the design process.  Then, once the design has reached a suitable stage, a design-build contract is issued.  The contractor who wins this contract will continue to develop the design, replacing the original team, while carrying out building works.  An advantage is that the work can begin earlier which will save the developer money.  It also limits the risk of extension of time claims due to design error.  There are some disadvantages.  Tenders will ask a higher price than Construct Only contracts, as they do more work.  Also, the developer loses design ownership key to the brand of the building.  It is possible for the developer to employ a team of design monitoring consultants but the opportunities for confrontation and crossed wires arise, as do more costs.

3) Two-Stage Tendering:  This can be seen as a adaptation to the Design and Build process.  It is sometimes thought of as more suitable for smaller, less complex buildings, but is increasingly popular.  This arrangement involves a contractor carrying out pre-construction work and assisting the developer’s design team.  It is usually let on a guaranteed maximum price basis.  When the design has progressed to a point where construction is able to begin, the developer will enter into either a construct only contract or possibly a design-build contract to complete the works.  The benefits of two-stage tendering to the developer involve retaining the all-important design control.  Also, as the developer has been able to engage the contractor early and obtain a fixed price for the second stage, this system provides cost and time savings.

4) Construction Management: With this system, the developer employs a construction manager as an advisor.  All works required throughout the building will be divided into packages and the construction manager will give guidance on the best way to do this.  The developer then enters into each separate contract while the construction manager oversees the process.  As everything is done under separate contracts, pre-construction works can begin while design is still being finalised.  When the design is finished one single contract can be issued for the rest of the works.  The main advantage to this method is the degree of control the developer keeps over the design.  The main disadvantage though, is that there is no single point of contact on the construction side.  Errors, queries and suggestions must involve tracking down the relevant contractor.  This is difficult for the developer and very unattractive to any lenders.  Previously, construction managers were assumed to have relatively little liability, as they are have no direct, contractual link with sub-contractors.  However, after the high profile Great Eastern Hotels case, construction managers and developers may view the arrangement differently.

Need tender writing or bid management assistance? Get in touch 0203 405 1850 or email hello@winthatbid.com

Tender Writing Insights: What no PQQ, Francis Maude?

The hills are alive with the gentle rumblings and occasional cheers about the possibility of scrapping the PQQ (pre-qualifying questionnaire) stage of the public tender process.

Francis Maude has confirmed that by scraping certain parts of the PQQ process, it will help encourage small and medium-sized enterprises to win public sector contracts. Nice sentiment but is it really going to help the SME? At Win That Bid, we spend some of our working day with clients to help them with the tender writing and PQQ process and quite frankly some of them are so badly written and poorly assembled, you wander what the Buyer was thinking of. Maybe they were thinking of what they were going to do at the weekend or what they are going to have for lunch, definitely not thinking about the job in hand. Often they are riddled with errors, contradictory text and have confusing sentence structures which all add to the hassle of the tender writing task.

Inspite of these frustrations, we must remember that the questionnaire stage serves an important purpose. It helps the buyer reduce the amount of unsuitable bidders whilst suppliers spend a fraction of the time finding out whether they are/are not suitable. Imagine if the way to win contracts meant going straight to tender? This would mean that SME would have to spend much more time tendering to no avail which could ultimately mean less companies compete. Francis Maude’s intention is good, however, perhaps he needs to think about his approach. Perhaps it is not the process that is at fault, more the interpretation by buyers.

Often irrelevant questions are asked and demands for policies and procedures need to be met even if they have nothing to do with demonstrating one’s capability at delivering the actual service. Francis Maude should focus on delivering more training and guidelines to buyers as well as reviewing the PQQ process to ensure the all important fairness to the SME market.

What do you think? Tell us or drop us a line on any aspect of the tender writing process.

Tender checklist – Reviewing you tender

Once you have written your tender the importance of reviewing it cannot be overstated.  Although you may feel sure that you have met all specifications these mistakes are among the most common reasons for bids being rejected.  Here is a checklist to help.

  • Be critical of what you have written, there is always room for improvement.
  • Make sure everything included is consistent.  When cutting and pasting text have any formatting changes arisen?
  • Have you used uniform and correct font, size and formatting throughout?  Does the style and order of your document meet with the requirements?
  • Seek written permission if you want to include any additional information about your company which is relevant and may help your bid.  Add these as appendices.
  • Number your paragraphs and ensure the accuracy of your contents page so everything can be easily located.
  • Create a front cover with the project title, date, name of organisation requesting the tender and the name of your own organisation.
  • Confirm that there are signatures wherever required, by the correct member of your company.
  • Once you feel sure that you have completed the document hand it to a colleague to check for spelling, punctuation, grammar and meaning
  • Consider getting the document professionally printed and bound if the client has requested it in hard copy.

How many public contracts are out there for my business?

golden ticket

Have you got the Golden Ticket?

Through my experience as Business Development Director on the front line of Win That Bid and through talking to lots of sales directors out there, it seems that the burning question is often ‘how can you guarantee me some relevant contracts that can increase my business turnover?’  The answer is, there are no guarantees in this life but we can help you make sure that you are in the right place at the right time.

If you want some assurances that there are enough contracts in a particular sector then a good place to start would be to look in http://www.publictenders.net or http://ted.europa.eu; if you spend some time reviewing what has gone then that will give you a good idea of whether it is worth spending valuable time and resources incorporating contract tendering into your business strategy.

We strongly believe that if a business wants to win their business changing contracts, they need to build tendering and bidding into their long term strategy. Though it may feel like winning the lottery when it happens, more often than not, winning happens because the company has been working very hard behind the scenes in preparation for the big day. It can take years, rather than months or days.

If it is something that you are thinking about incorporating into your business plan then we think that some of things that need to be considered are

  • Make a plan of attack
  • Allocate staff
  • Prepare the pitch
  • Understand the market you are pitching towards

Most importantly learn to be selective and always benchmark your progress so you are constantly on the road to improvement.  But anyway, more on this in another blog.

What are your thoughts and experiences – we would love to hear from you.