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News

Managing Budgets and Improving Services by Tendering

Date issued: 2nd June 2010

As the financial squeeze begins to take hold this may be just the right time to consider tendering services. It surprises me how often people stick with an existing supplier, rolling over contracts, undertaking value for money assessments and generally finding reason not to re-tender services convinced that what they have is the best service possible.

There are good reasons to re-tender periodically. Number one is that as you are feeling the pinch so are potential suppliers – they are more likely to give better prices or find innovative ways to add value in these circumstances; number two is that as technology moves on so do opportunities for suppliers to make their offerings more attractive, for example, through cost savings brought about by new machinery, equipment and systems.

Another reason is that companies are constantly adjusting to ever changing circumstances; companies are merging and changing so that the offer that they made you two years ago when you asked them for a price may be very out of date to what they can offer today.

People often avoid tendering because they have a comfortable working relationship with current providers: ‘they know what we want and we know how to handle them’. This can be a good thing but it can also be limiting – when new suppliers are appointed they are usually full of enthusiasm to satisfy you, make you a reference site, go the extra mile. When the contract has been running for some time the enthusiasm can fall off and ‘what gets measured gets done’.

This is not to say that long term contractual arrangements cannot remain good but a good supplier has little to fear from a bit of healthy competition so long as the competitive process is fairly managed.

Re-tendering also gives you an opportunity to revise the specifications that you currently use to manage your externally supplied services. These can usually benefit from being brought up to date in terms of user needs, technological advances and legal requirements. We have undertake numerous tendering exercises and have good experiences working with project teams that comprise staff, residents and external consultants to ensure that the needs of the various stakeholders are recognised and addressed.

If you are looking to make financial savings now might be the time to consider re-tendering some of your existing contracts.