The price they pay

9/14/2010

Posted by Jon
I’ve been travelling pretty extensively for work of late. So much of the core of proposal management ‘best practice’ is common around the world, but I always find it fascinating to uncover the subtleties associated with bidding in different countries and cultures.

Take a recent trip to Abu Dhabi. Flicking through a local paper at dinner one evening, my eyes were drawn to an advert announcing an ITT for an engineering project to be delivered for a public sector body.

And there, in the write-up, amidst the format of the proposals they’d require and the submission dates, was a quite fascinating phrase:

Deadline for buying tender documents

Yep, you read that right: ‘buying’. A rough mental calculation showed that bidders were expected to pay the equivalent of around USD 1,000 to the client’s Contracts & Tenders Department for the priviledge of participating. Discussions with the team on the course revealed that this was common practice locally.

Even the most experienced international purchasers to whom I’ve mentioned this since have been astonished and quite dismayed! But hey, it’d certainly focus minds during the qualification process if a ‘go’ decision involved writing a cheque to the prospect, on top of any internal bid costs!

4 Comments

Ceri

3/25/2016 04:15:53 pm

I came across a tender this month (in the UK) that stated £100 cheque was needed with the tender submission. If you did not pay you would be disqualified straight away.

The Business Development Team were keen on pursuing this tender until they saw the price and suddenly they qualified it out. As an extra reality check to sales people it proved useful but it was the first time I had seen this in the UK and I wondered if this was the start of a trend or merely an anomaly. Your post has got me wondering if anyone else has seen similar practices in the UK?

Frank

3/25/2016 04:16:05 pm

Although perhaps uncommon in Europe and the US I have seen numerous occasions where tender documents required purchasing. Classic examples regarding this practice are countries like India, Pakistan and Kuwait. In these countries the details regarding this practice range from the “black box principle” where you do not know what you are actually buying (goodbye bid qualification process!) to clever processes where you can download the tender documents but in order to submit your bid you need to buy the specially stamped and numbered enveloppe in which your bid is to be placed in order not to be disqualified.

In my experience one project in India really took the cake, where an advertisement was placed for interested parties to buy the pre-qualification documents(no sign of a tender yet) for a a sum of roughly USD 500,-. Once our agent arrived at the right time at the right office the friendly neighbourhood clerk made it very clear that the documents were not ready yet and delayed indefinately.

Setting aside the frustration of the moment in these cases, one can only wonder how much material one gathers in a career in international tendering for one’s memoires (or to bore your significant other)!

Lisa

3/25/2016 04:16:17 pm

Ugh. Buying tender documents. I once worked for a company who signed an agreement with a subcontractor that forced us to pay $1,200 for tender documents. The client manager in charge of “managing” the effort did not thoroughly read ANYTHING associated with the opportunity, except that he had to buy the tender documents. Once I was involved (after the documents were purchased and arrived), it turned out that the RFP had been on the streets for six months and was due in two weeks – two weeks that spanned the Thanksgiving holiday. He committed our company to waste $1,200 on the documents, and it was decided that we couldn’t submit a proposal anyway. Just another example of people only reading what they want to see when it comes to RFPs.

Navin Quadros

3/25/2016 04:16:34 pm

Welcome to my world :) Government and public enterprise usually have this practice and more often than not, there is a refundable deposit to be remitted with every proposal submitted in response to an RFP.

Giving the client organization their due, the practice originated to eliminate mass bidding by small firms which did not have the capability of delivering on huge projects like the ones undertaken by the client. Generally such small companies would bid low for such projects and then deliver substandard solutions or pretty much goof up on delivery. So the ability to put up a deposit payment is, in a way, an indication of the seriousness of the bidder to undertake the project.

A lot of times however, niche skill players are discouraged by the relatively big payments and most projects get delivered by the big generic service providers. Whether this actually guarantees good quality delivery for the client is a huge question.

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BJ Lownie and Jon Williams are the co-founders of Strategic Proposals.

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