Tendering, Contracting and Prequalification
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1 Tendering, Contracting and Prequalification
2 Overview Tendering Contracting Prequalification
3 Increased understanding of the tendering, contracting and prequalification processes. Outcomes Identification of common problems experienced by small businesses in these processes. Good practice examples for small businesses in tendering, contracting and prequalification.
4 Tendering What is tendering? Tendering can be defined as a formal written offer to carry out work, supply goods, or buy land, shares, or another asset for a stated price. Proposal briefing sessions Scope of Works tender evaluation TENDER contract evaluation criteria EOI RFT
5 Tender process 6. Delivery and Payment 5. Contract awarded 4. Client evaluates and selects tenders 3. Tenderers develop and submit proposals 2. Client publicises RFT 1. Client develops RFT
6 Open tender Anyone can submit a tender. Select tender Tendering approaches Government tender Procurement panels Prequalification
7 Tendering approaches Open tender Select tender The tender process is limited to a number of companies that the client considers to have the capacity to do the work. Government tender Procurement panels Prequalification
8 Tendering approaches Open tender Select tender Government tender Government tenders need to follow strict evaluation criteria and must demonstrate value for money. Procurement panels Prequalification
9 Tendering approaches Open tender Select tender Government tender Procurement panels A group of suppliers become members of a procurement panel following an EOI process. Prequalification
10 Tendering approaches Open tender Select tender Government tender Procurement panels Prequalification Most resource companies require contractors to be prequalified.
11 Preparing a proposal TIMELINES READING T H E R F T ATTENTION TO DETAIL presentation UNDERSTANDING CLIENT NEEDS USING YOUR TEAM COMMUNICATING CAPABILITIES DEVELOPING CASE STUDIES
12 Reading the RFT Missing a tender briefing Using the wrong format Exceeding the required budget Missing the submission deadline or Failing to address key evaluation criteria
13 Understanding the client s needs Undertake research into the: company industry or sector, and/or causes of (or possible solutions to) the problem the client is seeking assistance with Do not be afraid to contact the client with any questions.
14 Communicating your capability Capability statements can be used for: Meeting requirements of government registration processes Marketing literature for new clients Providing proof of qualifications Setting the business apart from competitors
15 Developing case studies One way of preparing for tendering is to develop a number of case studies from earlier projects that demonstrate the positive results that your business achieved.
16 Developing case studies Title of project Year Summary of project Project deliverables Positive outcomes for the client As an activity can you develop three different project case studies for your business in the following format?
17 Making the most of your team Identify the key selling points of these individuals Presenting them in a convincing fashion often requires more than including a CV A short biography for each team member can communicate key points of qualifications, skills and experience Develop a tender biography for yourself highlighting your qualifications, skills and experience and what that can bring to a future project or job.
18 Presentation Headings and sub-headings Photos, graphics and white space Plain English wherever possible A good diagram (can save a page of text)
19 Attention to detail Check spelling and grammar calculations (eg. pricing) you ve answered all questions in right order you ve met all requirements for tender lodgement
20 It is often beneficial for your tender to include a project timetable or a project management plan. Timelines
21 Contracting A business contract is a legally binding agreement between two or more parties. Small businesses will normally enter into a contract with a client once a tender or quote for work has been accepted. This contract sets out the range of services or products your business will provide in exchange for an agreed fee.
22 Different types of contracts Sale and purchase of a business agreement Partnership agreements Leases of business premises Leases of plant and equipment Telephone contracts Employment agreements Think about your lives and the different types of contracts you have entered into. Write up a list.
23 Essential elements To be legally binding a contract must contain four essential elements. offer intention of legal consequences acceptance consideration
24 Contract invalidity It is an illegal contract The person or entity lacks the capacity to enter into the contract The contract involves misleading or deceptive conduct, mistake, duress, undue influence or unconscionable conduct.
25 Written vs. verbal contracts Contracts can be verbal or written, provided they contain the four essential elements of a contract. A written agreement is recommended.
26 General matters are covered in a parties to the contract date of the contract definitions contract? description of the goods and services to be provided payment amount and details of payment dates
27 Getting professional advice Get the right advice before entering into a business contract. Legal advice will ensure your rights are protected. The contract could also require accounting advice.?
28 Avoiding disputes Know who you are dealing with when negotiating with a new client. Establish clear financial delegations. Put agreed work in writing at the start. Agree dispute resolution process up front. Get during with advice before you start. Document any contract variations the lifetime of a contract. Communication early and often the other party.
29 What is prequalification? Prequalification, or contractor prequalification, represents the minimum quality, financial, safety, environmental and management standards that a client requires contractors to have in place before they are allowed to quote for specific jobs and undertake work on behalf of that organisation.
30 Why prequalify? Enables your business to work with a major company on their site. Allows your business to tender for large projects with resource sector or government clients. Helps your business grow sustainably and keep your people safe. Enables your company to become a quality business that people want to work for. Makes it easier to get work with other large companies.
31 Does your business need to become prequalified? Many employees working independently on-site without company supervision. Example blasting contractor
32 Does your business need to get prequalified? Employees regularly go on-site working as part of a company team. Example plumbing firm that seconds some of their employees into a company team.
33 Does your business need to get prequalified? Employees sometimes go on-site, but always escorted by a company employee. Example cultural awareness training company.
34 Does your business need to get prequalified? Employees never go on-site. Sell goods or services to a company. Don t plan to work for large companies Example selling uniforms to a mining company.
35 3.3 Common prequalification requirements Health and safety Organisational structure and capacity Environment Quality control Human resources Financial management Community relations, heritage and Indigenous participation (for some companies)
36 3.4 Differences in prequalification between industry and government Mining Government Mining has a strong focus on health and safety. This is because mining is a dangerous business. Government clients are often focussed more on organisational capacity and financial stability. Oil and gas Oil and gas companies often have lengthy and difficult prequalification processes that require high standards.
37 Prequalification doesn t guarantee work or contracts Enables your company to tender for work with large government or corporate clients. It doesn t guarantee contracts or work. Once company achieves prequalification you still need to tender for work.
38 Demonstrating how your business manages its key risk To prequalify, your business will need to show two key things: Management system documents Examples include: Health and safety policies and procedures Quality management systems (e.g. ISO 9000) Risk management registers and strategies
39 Demonstrating how your business manages its key risk To prequalify, your business will need to show two key things: Implementation - putting an idea into practice.
40 Steps to preparing your business for prequalification 1. Risk management 2. Develop management system 3. Record evidence
41 Risk management activity Write down a list of the key risks that your business faces (i.e. things that can happen than can negatively affect your business). 1) 2) 3) Think of some steps you can put in place to prevent these risks from happening and reducing their impact if they do happen (management strategies).
42 Prequalification documentation
43 Prequalification checklist Prequalification is not easy. It may require a big investment and big changes in the way you run your business.
44
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