Each year, oil producing companies and other oil service firms invite other companies to submit bids for the supply of goods and services. Tendering processes in the oil and gas industry in Nigeria share many common elements. Currently, a conventional tender process in the Nigerian oil service/drilling sector includes a pre-qualification stage, a technical evaluation stage, and a commercial stage.
The process of bidding for a project will normally start with the issuance of a Request for Proposal (RFP) or Request for Quotation (RFQ), or Invitation to Tender (ITT) by the issuing company or public body. The tendering process may be through open tendering (in which case any qualified entity may bid), or selective tendering (when bid is opened only to some selected organisations).
Open tendering may sometimes be preceeded by a pre-qualification stage called Expression of interest (EOI) when interested companies will be requested to provide some basic documentation e.g company registration, financial statements, evidence of registration with appropriate governmental and professional bodies, evidence of tax payments, etc. This will be used to screen out unqualified companies before the ITT is issued to only qualified companies. An overview of the main steps to take to prepare a competitive tender is as follows:
Research and Planning
This step involves establishing the qualification of your company to meet the requirements of the project. It is critical to know if your company has the experience and resources to fulfill the needs of the project. It’s also important to do further research on the requesting company, to understand what they are trying to achieve with the project. This information will be helpful to structure your bid in a way that is tailored to the needs of the client. Also try to review the recently awarded contracts by the same organization. What type of companies won similar tenders in the past? What does the contracting organisation look for? What can you do to match their expectations?
Develop your Tender Response Strategy
If you are bidding for a high-value tender, plan your tender carefully and consider the requirements and resources involved. For example, ask yourself:
- How much will it cost to prepare the tender?
- What information do we need to gather?
- What resources will we need to fulfil the contract?
- Who will manage the tender project?
- How will we plan the workload, assign the work required, schedule the meetings?
- Who is our competition and what are our chances of winning?
Attend Tender Information Sessions
An organisation issuing a tender will normally make provisions for bidders to send clarifications for any requirements of the tender request that is not clear. The requesting organization may also provide for a tender information session. These are valuable opportunities to ask questions and make contact with the company. They may also give you a chance to meet potential subcontractors or make contacts that could participate in a Joint Venture (JV) or consortium.
What should be included in a bid document is dependent of the requirements specified in the Instruction to Tender. Your bid needs to be customized to highlight how your company is able to fulfill the bid request.
Make sure that you use the response forms provided and answer all questions. Stick to any word/page limits that there may be, and (as a general rule) do not go altering things like fonts and font sizes and numbering unless expressly permitted.
Be clear about your structure and propositions. Decide on several key propositions you can use to set your tender apart from others. Review the evaluation criteria to gain a better understanding of what things the organization is particularly looking for and will be evaluating your offer against.
Remember that a bid is not always given to the lowest price but is given instead to the company best able to provide the service required in the bid. Go through the costs, make sure they are accurate and justify the costs, based on project needs. Be clear as to whether you are providing discount or premium services and why that is beneficial for the project.
Understand the Payment Terms
When putting together your tender, make sure you are aware of the payment schedule specified. Payment schedules will vary from company to company and also from one government agency to another. You may not get paid as soon as the job is finished or goods are delivered. If you required payment different to that specified, you should detail this in your offer.
Make sure you check your proposal carefully before submitting it. Use a checklist to make sure your bid meets all the requirements (some tenders will include a checklist that you can also use).
Most companies or government agencies seeking a RFP or RFQ nowadays utilize online portals for bid submission. Make sure you learn how the portals work and that the submission goes to the right place with the correct documentation attached in the specified format. For smaller submissions, it may be possible to have all the files in one combined PDF file. However, in others, you may need to submit in separate files not exceeding certain sizes e.g 10 MB each.
While digital formats are widely accepted because they are easily distributed to all stakeholders, some organizations or government agencies might still want want printed bids. Follow their rules in making your submission.
Tender panels responsible for high-value contracts may request a formal presentation from bidders. If you need to present your offer to an evaluation panel, stay focused on the key messages in your proposal. Most importantly, prepare. Plan your presentation carefully, rehearse and, if you don’t feel you’re a strong presenter, get some coaching in presentation skills.
Be prepared to answer questions about the bid, provide additional details regarding pricing or timelines. This is often the stage where you might be asked if this is your “best and final” bid. Make a decision if there is any room for adjustments and inform the group that you can provide a revised bid if necessary. Be sure to detail what changes for a lower price whether it is quality of materials, the experience of labor or any other factor affecting the end product.
Request a De-briefing
You should always request a debriefing on the tender after the process, especially if your bid is unsuccessful. Feedback from the evaluation panel can be extremely useful in understanding how your offering can be improved and can assist you in preparing for your next tender. Look for ways to improve your next bid. However, note that not all organisations will respond to this request, as they are not obliged to do so.
If your bid is successful, be sure to find out when the contract will be awarded. While these timelines are subject to change, you’ll want to set your calendars and provide yourself enough time to make the necessary preparations to fulfill the contract. Stay in communication with the key personnel in the awarding organisation, note any requests for changes in scope and provide adjustments to the contract for them. Be professional and deliver on time to increase your chances for future bidding awards.