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What is Bid Planning? Our Full Guide

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Sep 26, 2023

What is bid planning?

Bid planning is a strategic and systematic process of preparing for and responding to Requests for Proposals (RFPs), bids, tenders, or other competitive procurement opportunities.

It involves carefully analysing the requirements of the potential buyer or contract, crafting a persuasive bid, and developing a strategy to position your organisation as the best candidate to win the contract.

Why is bid planning important?

The significance of bid planning cannot be overstated for many reasons. Firstly, it provides a competitive advantage by allowing organisations to differentiate themselves from competitors.

This process helps highlight their strengths, unique value proposition, and capabilities, which are critical in winning contracts, especially in highly competitive markets.

Bid planning aids efficient resource allocation, ensuring that the necessary personnel, materials, and budget are available to deliver the project if awarded. It minimises resource wastage and optimises utilisation.

Moreover, it plays a crucial role in risk mitigation by conducting a comprehensive assessment of potential risks and challenges and developing strategies and contingencies to address these issues proactively. This reduces the likelihood of costly surprises during project execution, enhancing project success.

Emphasising the importance of a buyer-centric approach, bid planning enables you to tailor your bid to the specific needs, preferences, and expectations of the buyer.

This demonstrates a commitment to meeting the buyer's unique requirements, which can be a deciding factor in winning public sector contracts due to buyers looking for suppliers who offer the best value for taxpayer money. This is commonly referred to as being the Most Economically Advantageous Tender (MEAT).

The role of pre-bid work in winning contracts

The role of pre-bid work in winning contracts is instrumental and can significantly impact an organisation's success in the competitive bidding process. The key roles and benefits of pre-bid work include:

  • Understanding the buyer’s needs: Pre-bid work involves thoroughly researching and understanding the specific needs and expectations of the buyer or project. Whilst this information may be available in the RFP and specification, wider research into the buyer’s needs, concerns and interests will help you appeal to their broader goals. This insight allows you to tailor your bid to align closely with what the buyer is looking for, increasing the chances of your proposal being selected
  • Competitive analysis: By conducting market research and analysing competitors, you can identify your strengths and weaknesses relative to others in the bidding process. This helps in crafting a bid strategy that highlights your unique advantages and mitigates weaknesses against your competitors
  • Resource allocation: Pre-bid work allows you to assess the resources needed to execute the project successfully. It helps in planning resource allocation, ensuring that you have the right team, equipment, and materials in place. See how we can help with your bid management
  • Risk assessment and mitigation: Identifying potential risks and challenges early in the pre-bid phase enables you to develop risk mitigation strategies and contingencies. This demonstrates to the buyer that you are proactive and capable of managing potential issues, which can boost your credibility
  • Budgeting and pricing: Pre-bid work includes developing accurate cost estimates and pricing strategies. This ensures that your bid is competitive while also maintaining profitability, a balance that is crucial in securing contracts
  • Bid preparation: During pre-bid work, you can start preparing the components of your bid proposal. This includes drafting content, gathering supporting documentation, and creating a well-structured proposal that addresses all buyer requirements. When bids are rushed, quality and compliance often slip. By being prepared, you can make sure that your bid presents your company in its best light, showcasing the true extent of your goods/service. To do this, you may wish to train your own in-house writers, hire a Bid Writer, or use pre-made bid templates
  • Relationship building: Building relationships and rapport with key stakeholders, such as the buyer, subcontractors, or partners, can play a pivotal role in winning contracts. Establishing trust and effective communication channels can give you an edge in the bidding process. To do this, you should create a comprehensive public sector sales and marketing strategy to make sure that your marketing materials are reaching key procurement figures. For more marketing advice, speak to a member of our team to see how we can help

Bid design: Pre-bid work also involves planning how you will present your proposal to the buyer. This includes considering the format, delivery method, and any additional visual aids or presentations that may enhance your bid.

A nicely presented, compliant bid is more likely to appeal to the awarding panel than a poorly designed, non-compliant bid which may be immediately disqualified. Check out our Bid Design service for more information

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How the bid process works

A key component of tender management is actually understanding the bid process. A common problem we see our buyers struggling with is keeping on top of bid opportunities as they are posted. This is why we created our very own Tender Pipeline software, designed with Small Medium Enterprises (SMEs) in mind to make navigating the public procurement minefield as simple, stress-free and fast as possible.

Tender Pipeline is a collated database of all UK public procurement opportunities, updated daily. Once you have created your free account, you can save key words and automatically receive an email once matching opportunities are released!

No more trawling through Contracts Finder and Find a Tender, Tender Pipeline makes sure you never again miss an opportunity. For a more hands-off approach, or if you offer several services, see how our Search and Selection Team can help to maximise your tendering success.

Upon finding an opportunity and receiving an Invitation to Tender (ITT), you should first thoroughly review all the ITT documents provided by the buyer. This includes the tender notice, instructions to bidders, terms and conditions, technical specifications, and any other relevant attachments. Understanding these documents is essential to ensure compliance and a clear understanding of the buyer's requirements.

After reviewing the ITT documents, your organisation should conduct an internal evaluation. This involves assessing whether your company has the capacity, capabilities, and resources to meet the requirements outlined in the ITT. It may also include a financial assessment to ensure you can meet the budgetary constraints.

Based on the internal evaluation, your organisation should make a bid/no-bid decision. If you decide to bid, you'll proceed with the preparation of your tender response. If you decide not to bid, you'll formally communicate your decision to the buyer and withdraw from the bidding process.

If you choose to bid, the next step is to prepare your tender response. This involves drafting the proposal, addressing all the buyer's requirements, developing a pricing strategy, and assembling all required documentation.

It's essential to follow the instructions and guidelines outlined in the ITT documents meticulously to prevent any possible non-compliance which would result in disqualification.

Once your tender response is complete and thoroughly reviewed for accuracy and completeness, you will submit it to the buyer within the specified deadline. This often involves submitting both hard copies and electronic versions, following the submission instructions in the ITT.

Some ITTs include a period during which bidders can ask questions or seek clarifications from the buyer. If you have any doubts or need additional information, this is the time to seek clarification to ensure that your bid is accurate and compliant.

After the submission deadline, the buyer will evaluate all received bids based on predefined criteria. This evaluation may include technical, financial, and other relevant factors. Once the evaluation is complete, the buyer will typically award the contract to the winning bidder and notify all participants of the outcome.

In some cases, there may be a negotiation phase after the contract is awarded. This is particularly common in complex contracts where terms and conditions need to be fine-tuned.

Once negotiations, if any, are successfully completed, the contract is formally executed between the buyer and the winning bidder. This marks the beginning of the project or service delivery phase.

The different types of bids

There are several different types of bids used in procurement and contract acquisition, each tailored to specific circumstances and project requirements. The main types of bids include:

  • Open bidding: This is a competitive bidding process open to any qualified bidder. It is typically used for public projects and contracts and is designed to ensure transparency and fair competition
  • Closed bidding: Closed bidding, also known as selective bidding, involves the buyer inviting a pre-selected group of potential bidders to participate. This method is often used for projects where the buyer has a specific list of preferred suppliers or contractors for contracts under certain thresholds
  • Sealed bidding: Sealed bidding is a type of competitive bidding where bidders submit their proposals in sealed envelopes by a specified deadline. The bids are opened publicly at a designated time, and the contract is typically awarded to the lowest responsive and responsible bidder. This method is common for construction and government contracts
  • Two-step bidding: Two-step bidding involves a two-stage process. In the first step, bidders submit technical proposals without pricing information. The buyer evaluates these proposals and shortlists qualified bidders. In the second step, shortlisted bidders submit their price proposals. This method is often used for complex projects where technical evaluation is critical
  • Request for Proposal (RFP): An RFP is a solicitation document that requests detailed proposals from potential suppliers or contractors. It is commonly used for projects where the buyer is looking for innovative solutions and is willing to consider factors beyond just the price, such as technical expertise and experience
  • Request for Quotation (RFQ): An RFQ is a simplified bidding process where the buyer requests price quotations from potential suppliers or contractors. It is typically used for straightforward purchases of goods or services where specifications are well-defined
  • Request for Information (RFI): An RFI is not a formal bid but a request for information from potential suppliers or contractors. It is used to gather information about the capabilities, products, or services available in the market before initiating a formal procurement process
  • Design-build: In a design-build bid, the buyer contracts with a single entity (the design-builder) to both design and construct the project. This approach can streamline the process and reduce coordination challenges
  • Competitive negotiation: In competitive negotiation, the buyer selects a shortlist of qualified bidders and engages in negotiations with them before making a final award decision. This method is often used for complex projects where price negotiations are necessary
  • Best value procurement: Best value procurement considers both price and non-price factors, such as quality, expertise, and past performance, when evaluating bids. It aims to select the bidder that offers the best overall value to the buyer

How to identify the right bid opportunities

When identifying the right opportunities, first begin by defining your ideal customer profile, considering demographics and behaviour.

Analyse your competitors to spot market gaps and engage with potential and existing customers to glean insights into their needs through surveys and interviews. Stay well-informed about industry developments by keeping tabs on publications and reports and attend industry events to gain firsthand insights and establish relationships.

Talk to our Team to see how utilising data analytics tools to identify emerging trends and patterns in your industry can boost your sales and marketing strategy and help you to find the best opportunities.

When engaging with industry bodies, actively listen to customer feedback, complaints, and suggestions. Facilitating your continuous improvement and creating case studies to use in procurement exercises, conduct regular surveys to gauge customer satisfaction and uncover areas for improvement.

When paired with Tender Pipeline, these pre-bid approaches towards finding the right opportunities allow you to understand your market placement and seek the most effective routes to market.

How to evaluate bid opportunities

Before committing resources to a bid, it's essential to conduct a thorough bid/no-bid analysis. This process involves assessing the opportunity against various criteria. Factors such as the alignment with your organisation's core competencies, available resources, strategic fit, and profitability potential are considered.

The bid/no-bid process ensures that your organisation focuses its efforts on opportunities that are most likely to yield positive outcomes. It prevents wasting resources on bids that are outside your expertise or don't align with your long-term objectives.

How to build a winning bid team

Building a winning bid team is a crucial aspect of securing contracts and succeeding in competitive bidding processes. To assemble an effective bid team, consider key roles and responsibilities, as well as team dynamics. Key roles and responsibilities include:

  • Bid Manager: The Bid Manager is the leader of the team responsible for overseeing the entire bid process. They develop the bid strategy, set timelines, and ensure all components are completed on schedule
  • Subject matter experts: Subject matter experts possess specialised knowledge in relevant areas, such as technical, legal, or financial aspects. Their role is to provide expertise and ensure the bid response is accurate and comprehensive
  • Bid Writer: A skilled Bid Writer crafts the bid response, ensuring it is well-structured, clear, and persuasive. They synthesise information from subject matter experts into a cohesive document
  • Graphics and design specialists: Visual elements play a crucial role in a bid's readability and impact. A graphics specialist creates visuals and layouts that enhance the proposal's effectiveness
  • Cost Estimator: For contracts involving budgeting, a cost estimator is essential. They develop accurate cost projections and pricing strategies that align with the buyer's budget
  • Legal Advisor: A Legal Advisor ensures that the bid response complies with all legal requirements and contractual obligations. They review terms and conditions and manage legal aspects of the bid

How to develop a bid strategy

Developing a winning bid strategy is a critical step in the bidding process, and it involves gathering and synthesising essential information, including customer requirements, compliance documents, and your pricing strategy.

Understanding the buyer's needs and expectations is the cornerstone of a successful bid strategy. Begin by carefully analysing the bid solicitation documents, such as the RFP or ITT. Identify specific project objectives, technical specifications, timelines, and evaluation criteria.

Engage with the buyer or attend pre-bid meetings to seek clarifications and gain deeper insights into their priorities. Tailor your bid response to align precisely with these requirements, demonstrating a clear understanding of the buyer's goals.

It is important to remember that compliance is non-negotiable in the bidding process. Thoroughly review all compliance documents provided by the buyer, including terms and conditions, regulations, and contract requirements.

Ensure that your organisation meets all necessary qualifications and certifications to participate in the bid. Develop a compliance checklist to track your adherence to these requirements throughout the bid preparation process. Failure to comply can lead to disqualification, making compliance a fundamental element of your bid strategy.

You must also assess the budget constraints and financial expectations outlined in the bid documents. Conduct a detailed cost analysis, considering labour, materials, overhead, and potential risks. Determine your pricing structure, whether it's a fixed price, cost-plus, or another model. Strive to balance competitiveness with profitability, ensuring your bid is attractive to the buyer while maintaining a sustainable margin.

Preparing the bid documents

The structure of your bid document is essential for clarity and readability. Begin by organising the response in a logical sequence that mirrors the buyer's requirements. Use headings, subheadings, and bullet points to break down complex information into digestible sections. In addition, you should highlight key points and your value proposition.

Ensure that the response is easy to navigate, allowing evaluators to find specific information quickly. Moreover, align your response with the evaluation criteria outlined in the bid solicitation documents, making it easier for evaluators to score your submission.

The quality of your writing is paramount in bid documents. Craft your response with clarity, precision, and persuasive language. Clearly articulate your organisation's qualifications, expertise, and unique value proposition.

Address each requirement methodically, providing detailed explanations and evidence of your capabilities. Use concrete examples and case studies to demonstrate past successes and showcase your ability to meet the buyer's needs. Be concise while conveying a comprehensive understanding of the project and its objectives, and collaborate closely with subject matter experts to ensure technical aspects are accurately conveyed in non-technical terms.

The final step in preparing bid documents is meticulous checking and thoroughly reviewing the response for errors, inconsistencies, and omissions. Verify that all buyer requirements are addressed and that the response complies with all compliance documents.

Check for grammatical and typographical errors that can detract from the professionalism of your submission. Ensure that all attachments, financial documents, and certifications are included as required. Consider conducting a peer review or having a third party review the response for an objective evaluation. Double-check all calculations and pricing details to ensure accuracy.

Budgeting and pricing for bids

Accurate cost estimation is the foundation of a sound bid strategy. Begin by conducting a comprehensive analysis of all project-related costs, including labour, materials, equipment, overhead, and potential risks.

Consider historical data, industry benchmarks, and expert input to refine your estimates. A well-defined cost estimation process not only ensures that your bid covers all expenses but also minimises the risk of cost overruns during project execution.

Effective pricing strategies are essential for competitiveness and profitability. You should consider the buyer's budget constraints and expectations, as outlined in bid documents.

Choose an appropriate pricing model, such as fixed price, cost-plus, or value-based pricing, that aligns with the project's nature, and strive to balance competitiveness with profitability, ensuring that your bid remains attractive to the buyer while safeguarding your organisation's financial health.

Incorporating social value commitments or additional value-added services into your bid can be a competitive advantage, but it also requires careful consideration of profitability. Assess the costs associated with fulfilling these commitments and factor them into your pricing strategy.

Seek ways to optimise operational efficiency and cost-saving measures to ensure that your bid remains profitable while delivering on these commitments. Balancing profitability with added value not only enhances your chances of winning contracts but also showcases your organisation's commitment to social responsibility and buyer satisfaction.

Submission and post-submission activities when bidding

A common misconception is that once a bid is submitted, that that is the end of the procurement process. This is incorrect!

Ensure that your bid response is fully completed, reviewed, and packaged well in advance of the deadline is non-negotiable. To do this, you should create a checklist to verify that all required documents, forms, and attachments are included.

Allow extra time for unforeseen technical issues or last-minute revisions. Late submissions can result in disqualification, so meticulous time management is critical.

After submission, engage in strategic post-submission activities. First, acknowledge receipt of your bid submission with the buyer, confirming that your response was received on time and in compliance with their requirements.

Be prepared to address any clarification questions or additional information requests promptly and professionally. Stay engaged with the buyer throughout the evaluation process, demonstrating your continued interest and commitment to the project.

Once your bid is submitted, you should conduct a thorough post-submission review, analysing the entire bid process and identifying areas of success and areas that could be improved.

Document lessons learned, including what worked well and what could have been done differently. Share these insights with your bid team and organisation to enhance future bidding strategies. Continuous improvement is key to increasing your competitiveness and winning more contracts.

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Tools and resources for bid planning

With every bid that you submit, your collateral and experience grows. Use the post-submission period to reflect on your successes and prepare for the next opportunity.

For example, you could invest in bid management software and technology to enhance efficiency and collaboration. These tools help you track deadlines, manage team contributions, and store critical bid documents securely.

Project management software, document sharing platforms, and communication tools facilitate seamless coordination among team members, especially in remote or distributed work environments.

Your pre-written content will help you to develop standardised templates and checklists for various stages of bid planning. Templates for bid documents, proposal layouts, and pricing structures ensure consistency and save time.

Checklists guide your team through each step, helping to avoid oversights and ensure that all required components are included in your submission.

Keep accurate records and maintain a bid library containing reusable content, such as case studies, references, boilerplate text, and past proposal examples.

A well-organised bid library accelerates response preparation by providing a repository of trusted and persuasive content that can be tailored to specific bids. See our Tender Library software for guidance on how to do this.

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