Five Reasons why Local Government Tenders Add Business Value
One has to admit – local government tendering can be tedious, time consuming and frustrating. However, local government tendering provides a great opportunity to benchmark your business. Below are our five reasons why local government tenders add business value; why you should consider including local government tendering as part of your business growth strategy.
Local Government tenders all follow a similar pattern, dependent on your particular state’s regulations. They all require you to show value for money and require you to demonstrate:
- systems and processes and
- provide a competitive price.
The tenders are generally same-same but are “flavoured” by the requirements of the specific council and its strategic focus.
Generally the same businesses apply for local government tenders.
What are the five reasons why local government tenders add business value?
Benchmark how well you demonstrate your business capability and capacity
All local government tenders require you to show past history and experience. The questions generally focus on:
- access to plant and equipment.
- demonstrating your understanding of the required scope;
- showing your capacity to deliver the outcomes of the tender with details around people, training and similar past experience
- demonstrating relevant experience in providing the same or similar experiences over a period of between 3 and 5 years.
Benchmark your pricing
You cannot really phone up your competitor and check out their pricing. But you can use tenders to work out whether your pricing is higher or lower as your competition
Benchmark your maturity in terms of business maturity, financial capability and systems and processes
Local governments are clear on what they require in terms of:
- minimum compliance requirements,
- understanding financial viability and sustainability and
- what minimum level of systems and processes are required.
Generally where you cannot demonstrate your business maturity, it is not worth spending the time to complete and submit a tender. Non-compliant tenders will not be evaluated.
Benchmark your competitors
You will get to know who your competitors are, when they win tender and why they win tenders. The level of feedback provided by councils vary, however as a minimum you should be able to determine who submitted tenders, who won the tender and an estimate contract value
Benchmark local government as a customer and understanding your customer’s expectations
Tendering is a way to pitch your business to a customer. In this case it is a fairly regulated customer but a great opportunity to enter into a contract which in many cases would be a three year contract. Having defined contracts are an asset to your business and very important for business growth and sustainability.
Same Same but Different
“Same same but different” certainly applies to local governments. Certain local governments are more progressive both in terms of using technology and in terms of thinking. Some local governments are more open and transparent in terms of the feedback on tender evaluation.
You need to match your business to the local governments that fit your style of business. Local governments that like technology and are spending money on technology will be more open to businesses that are technology savvy. More traditional local governments will prefer the old style way and be comfortable with stable but reliable service.
The level of detail provided certainly differs from local government to local government.
Where to find the information on tender awards?
“There are no secrets to success. It is the result of preparation, hard work, and learning from failure.” Colin Powell
Be warned – it takes time to find the information. It is hard work.
You have to firstly determine which local governments are best suited for your business; then dig and troll through a number of local government ordinary meeting agendas.
It is a boring task but certainly worth it.
As a minimum local government meeting agendas will show:
- who tendered,
- the estimated contract value and
- who is the winner.
Progressive local governments will provide you with a table that shows the evaluation criteria and how the tenderers scored in each criteria. If you can find details on your products or services, it will make your benchmarking much easier.
Tender search companies do have details available on contracts awarded.
I use Australian Tenders and a copy of contract award details is below.
Local government tenders as an opportunity to benchmark
We submit a number of local government tenders, not only in Western Australia. The level of information available on tender evaluation and scoring differ vastly from local government to local government.
You need to determine if you are tender-ready and if benchmarking will add value to your business.
Local government tendering is not easy in the start up phase of a business. It works well for businesses that have well established systems and processes in place and have faced the tides of time.
A great example are the extracts below taken from City of Cockburn and City of Stirling Ordinary Council Meeting Agendas.
This provides an excellent opportunity to benchmark your business in terms of:
- understanding what the customer requires,
- how well you performed in terms of capability and capacity,
- where your business is in terms of pricing,
- maturity of systems and compliance requirements, and
- who your competitors are.
Hopefully more local governments will understand that this level of open and transparent information is useful and still within the guidelines of probity. The agendas and minutes do not reveal any commercial sensitive information.
Local governments must provide feedback on tender submissions. Companies should insist on proper feedback after your efforts to complete the tender.
Transparent feedback is the least any local government can do to recognise the time and effort of tenderers!
How Long is a Piece of String?
Tendering is an opportunity to secure a longer term contract which adds inherent value to your business.
You need to do homework before tendering by reviewing previous tenders and how the specific local government approaches tenders and tender evaluation. Then decide where you want to tender.
How many times should you try your hand at tendering before you give up?
This is a decision specific to your business.
You need to determine if you are tender-ready and whether you want to include tendering as part of your business strategy.
If you want to benchmark your business and your competitors?
Maybe two – three times at least.
If you want to grow your business and secure longer term contracts?
As long as it takes – inside and outside of the public sector.
With every tender, your business pitch will become better. You will get a better understanding of what your customers require.
Tendering is part of your business strategy for growth
Tendering must be part of your business strategy for growth, it is not an overnight idea.
Have a great day!
Business Growth Through Tendering and Procurement