Big contracts and big jobs sound appealing, but what does it take to get a big tender over the line? We spoke to people from inside and outside of the industry to find out.

Tendering for big contracts is big business, and it can be appealing to think it’s a great opportunity not to be missed – a natural step for your business and something you should be ‘grown up’ enough to do.

But, first things first, you need to ensure it’s what you want, and what you need at this moment in time.

Jim Micholos, Gemcell Director and Commercial Manager at P&R Electrical says it’s important to approach any opportunity to tender from a position of realism.

“You have to tender for projects that suit your service offering and capability,” he says.

“Be realistic about what you can and can’t offer, and think about how it fits in with your vision and scale of business – understand what you would have to change to accommodate the work.”

Understanding what’s needed – from the ground up

Winning a tender requires a lot more than the technical ability to do the work. It’s essential you’ve got everything right on the business side of things, but first things first it’s important to understand the bigger picture of what’s expected.

Jason Rowe, Founder of Hello Electrical in Sydney, says. “Broad contracts need structure, documentation and systems of compliance that are not needed when dealing with small jobs. A tradie business should tighten its belt before bidding due to its safety management, insurance coverage, quality assurance and financial reporting.

“In larger organisations, they will want to see that you are able to keep deadlines, keep WHS up to standard, and produce consistent results without overworking your crew.”

Evidence, not ambition

In any walk of life, it’s important not to become an echo chamber – and when it comes to tendering for big contracts there’s plenty of valuable insight to gain from related businesses – and those that operate in completely different spheres too.

In the world of plumbing, Caleb John, Director of Exceed Plumbing in Adelaide, says, “Large contracts require operation evidence, rather than ambition, so the business should prepare the documentation on safety policies, licensing, and insurance.

“My team develops elaborate tracking systems of its jobs to manage cost and schedule since government and corporate clients monitor the consistency of delivery prior to the award of work.”

Fellow plumber, Steven Bahbah, Managing Director of Service First Plumbing, says small trade businesses find it difficult to cope with tenders due to the fact that they venture into it without the infrastructure to sustain a bigger workload.

“Tech-knowledge is not enough on big contracts,” he says.

“They also demand written safety mechanisms, proper compliance procedures, solid supplier association and financial dependability demonstrated by transparent documentations.

“The tender assessors seek uniformity in previous performances, record of the executed projects of the same magnitude, risk management initiatives that demonstrate the capability of the firm in keeping schedules without compromising quality.

“Within my practice, the advantage of the contractors maintaining a good record of job costing and quality assurance logs is quite measurable since the procurement officers are able to test the reliability of the contractors instantly.”

What are the key drivers for tender assessors?

Caleb says it’s important to understand what those people assessing tender submissions are looking for – and minimising risk is key.

“Risk reduction is the most important factor to organisations that are awarding tenders,” he says.

“They seek safety performance evidence, technical qualification, financial resource endowment and staffing capacity to manage long-term workloads without service failures. Most of the tradies do not realise the administrative cost, late payments, and reporting provisions associated with such contracts.

“Whether tendering is successful or not is determined by the internal systems being good enough to take those pressures and still remain profitable. The bids that are won are the ones that can prove reliability and can be repeated on a large scale without compromising on the operation.”

Jason agrees, and says it’s reliability that is supported by evidence that wins tenders – with that recording of job performance critically important.

“The credibility that my team instilled in it was achieved through capturing job performance measures, maintaining electronic records of the project and ensuring clear communication with the clients.

“Big companies appreciate a partner who would fit their systems and be professional in all dealings. A tradie business should also go beyond technical capability and show operation maturity, well established processes, leadership and growth responsibility.

“The latter factors disconnect an otherwise competent local team with a contractor with whom one would trust on a large project.”

Steven agrees about risk management being essential, and believes the big organisations prioritise that over cost and long-term reliability.

“Their preference is partners who are able to demonstrate insured operations, stable workforce and communication systems that make accountability at all levels possible.

“The business that seeks to compete should have scalable scheduling software, trained supervisors and contingency staffing plans in place prior to bidding.

“Most tradie companies do not realise the working capital buffer needed to cover late payments, and higher material expenses, which is usually at least three months of operating expenses. Lasting success in tenders is based on maturity of operations, documented procedures and record of service on time delivery and not marketing presentation.”

Assessing whether it’s the right approach for you

Only you can truly assess whether going after big contracts is the right approach at this stage of your business, but Jim says it’s essential to fully understand the reality of what you might be getting yourself into.

“Read through all the documents carefully, and obviously all responses need to be well thought out but honest. Know what you’re signing up for and what are the penalties if you fail your obligations.

“Make sure you fully understand scope of work, the tender requirements and the contract terms – and ensure you are comfortable on the deliverables – or amend or clarify to what you can offer.”

Whether you want to go after big tenders now or in the future – the key takeaway from our experts is this: the opportunity has got to be right for the business, and your business has to be set up correctly for the opportunity.

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