At a recent APMP event held in London, the majority of attendees on the bidding side were adamant that, given the choice, they would choose not to be part of a tender in which they were the incumbent supplier. The response follows ‘Attitudes to Incumbents’ research (Rebidding Solutions 2014) which found that whilst in the commercial sector the incumbent supplier is frequently successful in tenders, in the public sector incumbent wins are less predictable.
This might come as a surprise for many people not involved in public sector bidding. Surely an incumbent must have a huge advantage in terms of relationships and inside knowledge, not to mention the fact that they have a proven track record and capability?
Is it possible, however, to know too much? One of our members recently raised the dilemma of how to address any wrong assumptions that have been made in the tender document. For example, as an incumbent, do you actually cost an element that you know is not possible under the current operation, bearing in mind that the other bidders will – resulting in a situation where procurement teams may not be comparing like-for-like? Are you viewed as being helpful or disruptive? This is increasingly an issue on electronic tenders where there is no opportunity to discuss queries and any deviation from answering the exact question is discouraged.
In some cases there is, perhaps, a temptation to pitch for what you are currently delivering rather than what is in the tender document, which is a real mistake. It is also very hard to propose any new and innovative ideas without risking questions as to why you haven’t proposed them before. You are also aware of what works and what doesn’t, as you have probably evaluated many options. Examine any such observations carefully before including them in your bid, as resulting initiatives may come at a higher cost and even create a perception that you are either arrogant or complacent.
At our London event, a senior procurement executive from one of the local authorities said that in his experience incumbent teams look back, while newcomers look forward and that a successful bid should be able to do both. Whilst he recommended bringing in some fresh eyes, he also said that he had seen cases where a new bid team parachuted in with no prior knowledge of the operation, and had neglected to speak to the people actually operating the contract. As a result they have thrown out everything achieved during the contract period – both good and bad. This, to me, is incomprehensible and certainly does not meet any of the standards and best practice to which our membership adheres.
There is no doubt that being the incumbent brings its own challenges. I would recommend starting the process as soon as possible, and perhaps even trying to influence the thinking of the procurement team by sharing your unique experience and understanding of the contract. A good bid team must be able to apply its privileged supplier insights intelligently and carefully, for example, not overpricing rebids because of their knowledge of the reality of the contract.