Government contracts and large business tenders can offer lucrative business opportunities for small businesses. According to Infrastructure Australia’s 2020 Infrastructure Priority List, there is a record 147 nationally significant proposals with a project pipeline of almost $60 billion, designed to guide the next 15 years of Australian infrastructure investment.
Although the major contracts for these large-scale projects are typically awarded to the large construction firms (CIMIC, Transurban and the like), these firms will subcontract much of the work out to smaller firms, who in turn will subcontract projects out also. Much of this subcontracting is done via a tender process.
However, while winning such work can mean a large step up for many businesses, taking on these projects is not without risk. We recently ran a Webinar that looked at how SMEs can ensure working on these contracts works for their business, with insight from ASBFEO Deputy Ombudsman Dr. Craig Latham, and author Maurice Downing (Winning Government Tenders).
It is an expensive and time-consuming process for any business to put a tender up, so it’s crucial for smaller suppliers to be aptly prepared to ensure strength to their bargaining power. When tendering for large scale work there are things smaller suppliers can do to ensure their application stands out from the rest. These are the main points we learnt from the experts.
When evaluating tenders, government and other project managers will examine the financial viability of their suppliers. Do they have enough capital on-hand to ensure they be around to complete the work? Can they sustain their services between their invoice payments? The answers to these questions can greatly affect the assessment panel’s decision. Anything that the supplier can show that they are financially sound, such as having an invoice finance facility in place, is looked upon very favourably. At Apricity, we regularly supply our clients with letters of support when bidding for tenders. These can be helpful in demonstrating that the company can sustain its obligations to staff and suppliers.
Getting ready to apply for tender ahead of time will reduce stress, make for a better application and win more business. Ahead of time, it’s a great idea to collate a series of tender documents that represent types of opportunities of interest. Businesses should create a document library, so they have all the background materials already prepared. This can drastically reduce application time and ensure you can focus on the business you already have. Preparation pays off.
Get to the Point
Keep it concise – Keep in mind the primary audience, which is tender evaluation panel. Making their job easy is key, the tenders that take the least time to evaluate are the best tenders.
Answer the question – While this might seem obvious, it’s important to identify the key information needed, answer the question without unnecessary detail, back up information with evidence, and where possible use graphics to support the narrative. Avoid hyperbole and meaningless motherhood statements.
Seek good advice – Get close with your trusted consultants such as business advisors, accountants and lawyers, and be aware of industry groups, professional associations and business chambers should they be needed.
Finding Upcoming Tenders
There are great tools for small businesses to utilise to locate upcoming tenders, such as government websites as well as services that offer subscription notifications as new projects arrive.
The 2020 Infrastructure Priority List, complete with summaries for each project and initiative included in the current edition, is very helpful and available on the Infrastructure Australia website here. The 2020 Priority List is also available as an interactive map on the Infrastructure Australia website www.infrastructureaustralia.gov.au, which sets out a detailed view of infrastructure issues and opportunities identified around the country.
We have created a list of resources on our website on where to find accurate and reliable information relating to tenders and government contracts. Additionally, we have created a helpful e-book titled Landing The Big Fish which details, and can be downloaded here.
There are formal training courses and workshops for companies that teach skills on how to develop strong tender responses. Maurice Downing, as well as authoring this book, also runs Corfocus, which helps businesses prepare for the tender process.
Additionally, talking to State and Commonwealth departments about how best to respond a tender can be a great way to get clarity.
To learn more, watch the 60-minute webinar, here. The Apricity team is available to chat over the phone in regards to any questions about making big business work for you.