Should We Abolish Tenders? Your Votes, Your Story

hand holding sign saying yesHiResFirstly thanks to all those who voted, and especially those who commented.

This may not come as a surprise, but the result was a majority vote:

66.7%

…of you voted to abolish

This vote was cast in the knowledge it’s unlikely to happen.

Voters were asked to imagine a world in which alternative perspectives can be examined, and to explain their reasons for their vote.

One of the core issues of tenders is the time people invest which has been illustrated in previous surveys, and the differences between open and closed tenders.

And striking at the very heart of the frustration, I suspect for both parties in a tender, is the differences between the accuracy of the tender and what ultimately unfolds as the project goes live.

Respondents discussed the very nature of tendering which can build an arguably adversarial relationship at the outset, rather than the mutually relationship building approach of directly quoting for a job where a friendly negotiation and increased understanding can be reached.

The prescriptive nature of a tender mean the bidders have limited scope to question the tender, or point out pitfalls as openly. This can be seen in the underlying frustration that people experience.

They finely balance between a bid that can win the work at a worthwhile price, against losing out by challenging the scope of the tender.

With that in mind, let’s examine what everyone said.

Let’s Look At Those Who Did NOT Want To Abolish Tenders

Well, firstly, there were the voters who grudgingly voted against the motion.

“Love it to be “Yes” but not totally practical” said a construction company from Hull. And from a Middlesex fit-out specialist, “Unless you have an alternative otherwise how will we get any work?”.

A civil engineering company from Bath said quite succinctly that we should not abolish tenders “Due to the need for fair evaluation.”

Others suggested changes, such as a contractor from Wilshire who voted against abolition “But we should abolish or prequalify PQQs so there is a clear list of those who have clearance.”

And perhaps more dramatically a very firm opinion from a Buckinghamshire contractor: “In general it is a “No” – No, tenders should not be abolished, they should be made even more complicated! With a very strict PQQ Process to support them. I can’t think of a better way to guarantee Fair and Open Competition. Should “Open Tenders” be abolished – a definite “Yes” – Open tenders should definitely be abolished who wants to price against 20 or more on an open list? (36 is our current record and we lost!)”

And Those Who Believe They Should Be Abolished?

There were certainly more lengthy answers from those in favour of abolition, perhaps reflecting a general frustration with the whole process.

Quality is an issue from a Carmarthenshire fireplaces specialist “As a company that works on historic buildings and monuments, lowest tender bids often lead to an unqualified company tackling work they know nothing about.”

While an M&E consultant from Preston highlights the vagaries of the tender documents by saying:

“Very often tender documents are ambiguous, technically flawed, unreasonably onerous and written by people with inadequate knowledge of the standards to be complied with and the critical objectives of the client and in particular where procuring professional services is usually inadequate with regard to being clear in specifying an appropriate level of service to successfully deliver the project. A partnering approach whilst not perfect goes some way towards addressing the flaws in the tendering process.”

This is a viewed echoed by a London-based roofing specialist who adds “In an ideal world relationships between clients / main contractors and sub-contractors should be built around trust. this would allow performance to dictate whether you would be asked to go forward on a project whilst negotiating terms rather than competitive tendering.”

And the theme continues as a West Midlands manufacturer suggests a major change to our thinking: “On balance YES. Problem is that in lean times tenders become auctions and in times of plenty they become negotiations. Negotiation is far more preferable but trust, transparency and shared market knowledge is required all of which fly in the face of the traditional closed tender process. Major mind shift needed!”

Another theme to emerge was the costs and margins in tendering, for example a Shropshire builder frustrated at slim margins: “The percentage is abysmal and we seem to be working as busy fools to get the jobs too many undercut to get the job!”

And they are not alone as a Berkshire builder confirms: “Yes, abolish. They are a nightmare – they cost a fortune to process and they engender a ‘them and us’ situation before the contract has even started.”

And the clamour for change in view of the costs and tight margins is confirmed by a London Contractor who adds: “Tenders are time wasting and a costly exercise. Rarely do we get an open book approach with the client so we know the budget and develop the best scheme to win the work. Time for a change!”

An architect from Inverness believes that tendering can actually reduce competition:

“I would say yes to this. Certainly in our profession of architecture and working on the periphery of the UK, the effect of pervasive use of tenders has been to marginalise architects at the periphery ­ and rather than increasing competition has resulted in an increasingly smaller group of architects who can tick all the boxes.”

And finally, inconsistency in tendering gets a vote for abolition, unless certain conditions are met from a Programme Management specialist in Leeds:

“Subject to limiting the number of tenderers to a maximum of three, complete set of tender documents, sufficient time to tender, evaluate and recommend. If all or one of these elements are unachievable then the tender process is compromised and the answer would move towards a “yes”.

Step Toward Abolishment Or Reform?

With a perhaps surprising majority voting for the abolition of tenders, it is clear change is needed. Some point to the loss of trust and how tendering compromises the fostering of positive relationships.

Some still point to the inherent fairness in tenders. Yet to counter this view, the weaknesses in tendering, for example the ability of the client to properly and fairly specify the job perhaps, suggest the opposite.

But what about variances? The elements of a project that were not specified? When a contractor is running at low margins, any additional work outside of the tender scope is an opportunity for them to improve profitability.

So do tenders always achieve the cost savings you would think they are designed to maximise? Because so many tenders are poorly specified, their inflexibility can end up costing much more than intended.

Change is certainly needed. And a change of mindset and thinking that many have pointed to.

But for now, we are stuck with tendering.

If you’d like to stand a better chance of winning the tenders you really want, get in touch. You can give your tender submissions a boost to make them jump off the page and impress those who judge the winners.

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