The business services or outsourcing sector has grown over the past two decades into a multibillion pound market. Huge areas of government services, back offices and other functions are delivered via contracts run by the private sector. Blue Chip companies outsource to others what ten years ago would have been seen as ‘core’ functions. Companies such as Serco, Capita, G4S and others populate the FTSE 100 and employ hundreds of thousands of people, all delivering work that has been won through bidding for contracts.
Bidding and proposal management has become a profession sitting alongside project management. There are an increasing number of books, training courses and now even professional qualifications such as the Association of Proposal Management Professionals accreditations to advise, help and develop bidders. Bid processes are becoming well known and ‘best practice’ is increasingly well established for how to win new contracts.
But what about when you have won the contract, run it for its first contract term and it is coming up to be competed again, as almost all contracts except one off projects usually are? You are now the incumbent facing competition from new competitors. Are the processes and approaches you should adopt exactly the same as you used to win in the first place when you were the new competitor looking to win a new contract? Or are there different approaches, skills and techniques that you should use to add to or adapt your new win bid processes?
A very few companies have started to develop and adopt different approaches to rebidding that incorporate all the skills and techniques of winning a new bid but, based on their experiences of winning, and losing existing business at rebid, add to these to improve their chances of keeping the contracts they already have.
So what are some of the lessons they have learnt?
It’s how you delivered the contract that counts
If you’ve delivered a poor or even just average performance on your exiting contract then the customer will not be rooting for you in the rebid, in fact they might actively be looking for a change. And its not much use telling the customer in your rebid documents and presentations all about the great things you’ll be doing for them in the future. They either won’t believe you, or they’ll ask why you’ve not been doing that for the past x years on the existing contract. Successful rebidding isn’t just about how you run the bid part of the rebid process – its about how you’ve run the contract - and companies that are consistently successful at retaining their contracts don’t see the rebid as a separate bidding exercise – they plan ahead from the start of the contract with the rebid in mind.
The contract shouldn’t look the same at the end as it did when you started
Following on from the previous point you need to plan ahead not just for how you are going to run the contract but how you are going to change it to better meet the customer’s needs – both as you learn more about them and as they change. Partnership based contract formats have attempted to bring flexibility and change into a form of doing business – the contract – that is driven by what was specified and bid to be delivered at a single point in time. But a contract can be three, five, ten or more years long. How much in your business has stood still for the past ten years – and how much of that change could you have predicted, and contracted to have delivered ten years ago - and still be happy with it if it hasn’t changed? And no matter how many times you use the word partnering, if you haven’t actively used partnering approaches and techniques to actually help keep your delivery of the contract in line with the customer’s changing needs (and by this I don’t mean just using change controls to improve your margins), then you won’t be in the best position to win your rebid and continue to make a margin for the next ten years from this contract. A good contract should have a plan for change, and just like your business it should have processes in place to deliver that change, and a review process to update the plan regularly as circumstances develop over time. That’s the sort of contract that will be much easier to rebid successfully.
If you can’t remember all the great things you’ve done on the contract, don’t expect the customer to
Even if you have delivered a great contract, you can’t expect the customer to give you marks in your evaluation if you don’t say you have, and give the evidence. Its a frighteningly common mistake in rebids: either the rebid team can’t find the evidence to prove that things have been delivered really well (because people have changed, no one kept records, or the improvements over time weren’t measured properly) or worse the team assume the customer is so familiar with them and the great work they’ve done that they don’t need to be reminded in the rebid. Part of your contract plan needs to be to record and properly collate all the changes you’ve made and keep records of your performance over the contract. Remember: even if your operational customer contacts are totally enamoured with you and really want you to win, they might not be the ones in charge of the rebid evaluation and decision making – this is when the customer’s finance, procurement and senior management team get involved – how much are they on your side?
And if the customer doesn’t ask in the contract specification that you originally bid for you to report on measures that show the positive impact that you are delivering for them, then find measures that do show this and record them. Not only will you be able to (hopefully) impress the customer during the contract, you’ll have your own measures to work on to improve over the period of the contract.
Start your rebid early
At least 18 months prior to the end of that contract. Time should be on the side of the incumbent, but often the rebid effort if disjointed, with the rebid team not fully allocated, or a clear rebid plan in place until close to the date the customer releases documentation. Incumbents often forgo what in a new bid would be called the capture planning stage – working through customer needs, building relationships with all the stakeholders and aiming to influence their thinking. Of course those challenging for the contract are doing all this, with the aim of finding out and exploiting the incumbent’s weaknesses in the mind of the customer. Starting the rebid effort early gives you time to: review present contract performance; find out what the customer is looking for in the next contract period; move contract delivery where possible towards showing that the incumbent can deliver these new needs; clearly plan the potential solution for the next period; collate all the good things done on the contract to date; influence the customer’s thinking on the rebid process.
Get the right rebid team mix
The rebid team needs to include people from the contract plus those with experience of the bid process. There also needs to be strong input from people who can take a clear and objective view of the customers needs and create a solution to deliver it. Whilst you can start from the delivery structure on the existing contract this has to be strongly challenged. Is it still the best way to meet the needs the customer has for the next contract period? Has it become ‘fat’ through too much familiarity, increased wage costs, out of date technology or approaches compared with the market and competitor best practices? The key to success is balancing the inputs from the existing contract team, who will add experience, day to day detail and a sense of what is workable – but will tend towards a ‘more of the same’ approach, with objective review ( Green Field Review) by bidders etc who are more likely to challenge the status quo and deliver innovation – but need the operational team to ensure workability.
Use your experience
With great performance that you can evidence, innovation that has kept your contract up to date with customer needs, an early start, the right rebid team and a clear and innovative new solution you should be in a strong position to win the rebid. However you need to ensure that you properly use the evidence you have. Show the customer you understand their needs at a level of detail that challenger’s cant. Knock down alternatives that challengers may suggest by showing you have looked at them and why you have rejected them. Make sure that you only price the specification the customer has set for the new contract. If your team know there are costs or tasks that are required to deliver the contract that aren’t specified, make sure the customer knows this and that the challengers do too – don’t cost them in unless you know everyone else will also do so. Show how your experience and understanding of the customer has reduced the risk to the customer in making the changes you are proposing – you should be the lowest risk supplier anyway, but show why you will continue to be so. Never, ever assume the customer knows what you have done on the contract.
These and other approaches and techniques are being used by some companies to ensure they retain a high proportion of their contracts at rebid. Particularly their approach to how they run the contract , investing time in innovation, added value, gain sharing with the customer when costs are reduced can seem counterintuitive to other businesses whose culture, drivers or view of ‘commercial maturity’ is to maximise short term profitability from their contracts. However those that win a higher proportion of rebids gain from long term relationships with customers, longer term profits, and less requirement to constantly win new business to replace lost contracts – instead new contracts built on a core of won rebids leads to faster and cheaper growth as new business is added to a more stable foundation of turnover and profit. They feel that focussing their efforts on seeing rebids as different and worth long term investment is a key to their success.
What is your company’s approach?
To get the details of the approaches and techniques that will help improve your rebid win rates, you can read my book ‘Winning Your Rebid’ (Gower)
Nigel has 17 years experience of running, reviewing and winning rebids in a range of companies and sectors including local government, education, justice, NHS, housing and transport.
He has trained operations and bid teams in rebidding across the UK, Europe, the USA, Australia and New Zealand.
Nigel is presently Business Development Director for a leading outsourcing business based in the UK.