The ABC of the public sector’s calls for tenders — (First part)
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Would you like to break into this competitive market to boost the growth of your business? Here’s what you need to know…
You own or manage a company? Or, you work in the sales department and business development of affairs in a company?
In any case, you might be interested in getting a better understanding of call for tenders in the public sector to bring exposure and optimize your business’s expertise in that field. As you are aware, this competitive market has its bundle of constraints, but don’t let it stop you before learning more about its process and potential by reading what follow’s!
Calls for tenders in summary
A call for tenders can be defined as:
“A procedure of request for proposal which consists, for the planning of a project, to invite suppliers of goods, providers of services or building contractors to present a precise offer in order to achieve the award of a contract.”[1]
A call for tenders can be private or public. It states a company’s or government agency’s need to obtain goods and/or services from a third party.
Each country in the world has its own bidding policies. Daily, business opportunities are being published worldwide.
In general, a tender notice contains the following information:
- The name of the organisation in search of bidders
- The contact information of the contact person
- The type of contract being offered (service, procurement of goods or construction work)
- The description of the required products and/or services requested
- The awarding procedure
- The criteria to be met in order for a bid to be considered
- Information regarding the quantity, time and delays planned for the delivery of the products and/or services needed.
- The financial capacity, experience and technical skills required
Private vs Public
Private sector
In the private sector, you can have access to contracts by networking, consulting specialized magazines linked to your activity area, online research and a spontaneous offer of your products and/or services in front of anticipated needs (example: approaching a general contractor of a condo project that is under way to present your cabinets and counters). In this area of the market, the selection criteria are at the discretion of the company that is subcontracting.
Public Sector
In the public markets, the calls for tenders are displayed by ministries and government agencies, education organizations, health and social services, municipalities and by government owned corporations. They are generally published for at least fifteen (15) days to let as many companies as possible bid.
It is important to know that the supplying process is very different than the one stated above. Why? Because it is subjected to rigorous criteria and tight scrutiny for the respect of the laws, rules and regulations stated, considering that the money spent comes from taxpayers who have the right to know if it was invested properly.
How to find public call for tenders?
Generally, the search for public sector contracts is done through the consultation of specialized newspapers and magazines, as well as on the online platforms dedicated to them.
In Canada, each province has its broadcast site, here are some examples:
Buy and Sell — (Federal Tenders, About 10,000 Business Opportunities Published Annually)
SEAO — (Province of Quebec, approximately 50,000 publications annually)
MERX — (Canadian Government Procurement)
Service Nouveau-Brunswick — (Province of New Brunswick and submissions published by other public sector organizations such as municipalities, hospital corporations, Crown corporations, universities, regional landfill corporations and Atlantic Lottery Corporation)
On the American market, they can be consulted on these sites:
Acquisition. Gov — (Federal government, main source)
Federal Business Opportunities — (Federal government)
USA GOV — (Federal government, version beta)
New York State — (State of New York)
US Small Business Admin. — (Allows access to the different platforms of each of the American states)
Selection Process
Based on transparency, this more complex procedure than the private sector’s one aims to ensure that bidders have a minimum level of fairness and avoid any form of fraud or bias.
The federal government has the obligation to start a tendering process the moment that expenses to expect are equal or greater than the following thresholds:
Thresholds adjusted to inflation — ALEC. ACCQO, AQNB and AQNY[1]
Ways to solicit
There exists three ways to solicit in public markets. These are defined as follows:
Contract done by mutual agreement
This type of contract is concluded between an agency of the public sector and a private company that is entitled to meet its current needs. However, before proceeding in this manner, a public organisation must consider the other available procedures to tender and its leader can also decide to restrict to a specific solicitation method. The main reasons that justify this kind of contract are usually linked to pre-existing warranties or property rights.
Contract awarded by public call for tenders
The public call for tenders is a formal tendering process characterized by the obligation, for a public agency, to publish an invitation to tender in an electronic system. All companies that fit the admission criteria have the right to bid in answer to the published public call for tenders.[1]
Contract awarded by invitation
Another way used by public agencies to solicitate is the invitation to tender which permits the government to invite specific companies to bid when the worth of the contract is inferior to the previously shown thresholds.
Awarding methods
For tenders posted in Canada, it must be understood that the selection process of the supplier or contractor is based on a predefined method of adjudication, meaning certain criteria for awarding a contract.
In general, the four ways to award on which the choice of the candidate relies on are:
Based on the price
This way to tender relies on the principle of awarding the contract to the bidder that bids the lowest price.
Based on the price and a certain level of quality
This method means the selection of the candidate whose bid not only presented the lowest price, but also met minimal predefined quality standards.
Based on the adjusted lowest price[2]
When the public agency is willing to pay a higher price for better quality, it chooses the mode of adjudication based on the quality-price ratio. By the end of the tender, the price of each acceptable bid is adjusted by a mathematical equation.
The public organization evaluates the quality of the bids, adjusts the price according to the mathematical formula and awards the contract to the bidder whose bid is compliant and whose adjusted price is the lowest.
Based exclusively on quality
This method of selection is based only on the selection of the bid whose achievement of the quality standards is evaluated as being the highest, despite the price, to the extent that it is considered acceptable.
Final results
In the public sector, when a contract is awarded to a tenderer, the agencies are generally upheld to publish a selection notice presenting the following information:
- The number of received tenders
- The expected delivery date
- The information of the chosen tenderer (name and company contact information)
- Evaluation criteria (known under the name of adjudication criteria) that justify why the tenderer was chosen
- The worth of the signed contract
Patience!
Even if your company has not won the contract it was interested in, do not be discouraged! Instead, consider this process as a learning experience and know that you will always have the possibility to ask for feedback from your bid within 30 days following the announcement of the selection, which can enhance the image and seriousness of your approach towards the client, in addition to helping you better understand your strengths and weaknesses and discover the most competitive prices in the market to earn a contract in the near future.
In the meantime, be aware the that the team at Umaneo works tirelessly to provide you with a simplified technological solution allowing quick access to this market with artificial intelligence (AI).
Would you like to know more about our project? Click here!
