Within the public infrastructure space, I’m known
for my specialisation in collaborative contract
bidding – in which non-price-based “project
alliancing” is the premium delivery format. When responding
to Requests for Proposal for this type of contract, price –
literally – cannot be used to win the deal; it’s formulated in
collaboration with the client only ‘after’ award of the project.
In that type of bidding environment, you sink or swim
based on your ability to develop a bid strategy with no
reliance on price – but with total reliance on value delivered.
With “value” the focus of every element of the research
and strategy formulation effort, the quest becomes firmly
focused on exactly what it is that constitutes “value” and
“value for money” in the context of the project being bid for,
and in the context of the client’s world.
How is that relevant to tendering for a logistics or
transport contract?
The key point of relevance is this – and it’s consistent
with the core message of all my columns to date: If you can
determine, with precision, what it is that’s most important
to the client, above and beyond all else (and sometimes,
the answer to that lies buried deep in the collective
subconscious of the client organisation), nine times out of
ten, you’ll have the foundation for your strategy. And nine
times out of 10, it will be ‘non-price-based’.
If you come in with the keenest price, but somehow
manage to trash the client’s reputation within its
marketplace, of what benefit is your low price? If you cause
grief and aggravation through unreliable delivery times
or poor materials handling, what is the true cost of your
“service” to the client?
These are clearly extremely basic and obvious examples
of “cost” versus “value”. However, if you drill down into all
the ways a low price might be irrelevant in the face of poor
performance on any particular contract, you’ll find a vast list
of potential pain points that company will want to avoid.
And faced with the prospect, its decision-makers will usually
readily concede these aren’t worth putting up with for the
sake of a low-ball price.
On the same hand, a bid team that does its background
research, and that also finds a way and takes the time to drill
deeply into the psyche of the client, is generally rewarded
with the insights into exactly what it is that constitutes
“value” to that organisation. And, again, nine times out of 10,
the primary point of value will be non-price-based.
There are too many bidders out there – in all industries
– whose automatic response to a loss is to attribute it to
“being beaten on price”.
Some years ago, a survey of UK construction company
executives was conducted. These executives were asked
why they though they lost bids – and why they thought
they won them.
In almost every instance, these seasoned industry
representatives believed their tendering victories were
due to the outstanding job they had done when it came to
understanding the client and the specific requirements of
the project. But these same respondents believed the only
reason they ever lost a bid was because they came in too
high on price!
This flawed logic stems from a reluctance by bidders to
admit that maybe they lost to a competitor not on price,
but because that competitor had done its homework more
thoroughly.
It’s a very simple equation:
The more thoroughly you’ve gotten to know the client
organisation, and its working environment relevant to the
contract in question, the more chance you have of lining up
your strengths with the (often intangible) requirements of
that client and that contract. And it’s there that you’ll find
your core value proposition.
