As a Supply Chain Professional, I have had the privilege of spending my entire career in the private sector… Not that there is anything wrong with the public sector, but I’ve always taken the approach of staying about as far away from the laws of competitive bidding as I could possibly get. Why would I take such an approach? Well, it is not that I want to create an uneven playing field, because that is not what this is about. It is simply about being able to consider the variables that I believe provide the most value for the organization, without having to waste a substantial amount of time and effort trying to justify why I make the decisions I make. Why waste the time and energy if one doesn’t have to?
I’d like to start by stating that tenders do have their place in business, and are a justifiable approach for the right types of sourcing activities. And of course in some organizations (like the public sector), we have little choice but to follow this path. The path is, however, not without its pitfalls, and sometimes these pitfalls can be significant.
One of the most common misjudgements that I see in the tendering process is when the writer keeps adding volumes of information and criteria for responders to meet in order to be “qualified”. They do so actually believing that they are creating increased value for their employers by making the tender requirements as stringent as possible. The unfortunate truth is, however, that they accomplish the exact opposite.
What happens when you add layer after layer of qualifiers to a tender? You make it harder and harder, and often less desirable, for prospective vendors to respond. This in turn, reduces the number of responders, often leaving only large organizations (with high overhead and high cost structures) to respond, which in turn drives up the cost associated with the resulting contract.
So assuming that tendering is the right choice for your sourcing activity, or is the only choice available to you, it is important to think strategically when writing the tender document. Will these additional criteria actually drive value for the organization, or will they simply act as a barrier for applicants, thereby eliminating prospective high quality vendors from the pool?
In the end, sometimes simpler is better.
