You’ve bid on five projects and have gotten all of them. Good for you! However, this is likely to be a fairy tale. The reality is you probably didn’t get all of those jobs. Perhaps an unqualified bidder did not understand the scope of work, misjudged his costs and is now the apparent low bidder.
So, what do you do next? The first thing to do is gather information. The most important step after a bid submission is prompt, timely follow up. Never just sit back and relax. Once the bid goes in, give it a day or so and ask for feedback from the buyer: “Jim, we got our bid into you, and I wanted to follow up and find out how we look.” The critical step is to get as much information as possible.
When will the actual decision be made? Find out who will be making the decision, and is it a team approach? How will the bidders be notified? Is a point or weighted value system being used to evaluate previous performance, schedule of completion, and price, or is the criteria the lowest bottom-line price?
Once you get that information, you must be ready to move quickly by evaluating your bid strengths and weaknesses. This is especially true if you’ve been told, “Your bid numbers looked pretty good, but a cursory review shows that you may not have the necessary experience and as quick a delivery time as we’d like to see.” What can you use to demonstrate your credentials? How can you improve your delivery parameters? Make sure to ask: “What would I have to do to get the job?”
If you’re not the low bidder, are there mistakes in your bid? Sometimes, if you have made a transposition error, especially in a calculation between unit pricing and the price extension to total pricing, you can ask for a correction. “Joe, I’d appreciate it if you would make the correction on your copy; this will result in a total price that is lower than what was originally stated.”
In many bids or proposals, the correct total of unit price multiplied by quantities will trump a total price that is incorrect since it demonstrates your intent. However, if you make a mistake in unit price, there is rarely anything that can be done. Or, if you leave out an entire floor, you’re usually out of luck.
Is there anything in the scope of work that is ambiguous that might have influenced your higher price? If so, perhaps you have an angle you can pursue. If it was a negotiated proposal, where you proposed a scope of work, did you actually offer more than the buyer required? “Frank, I offered to complete the job in eight days, but you’ve said my price was higher; however, we offered a quicker delivery schedule than you required as an inducement for you to do business with us. I could probably trim my bottom-line price if I offered completion in12 days. We’d really like to do the job, so will you accept this option and the lower price?” The success of this approach hinges on whether Frank really wants to find a way to do business with you.
You have the most leeway in a negotiated bid situation when the outcome can be informally discussed. When there is a formal bid, especially an Invitation for Bid (IFB) with a government agency, it is very tough to negotiate anything. Here, all you can do is state your case to the contracting professional, emphasize your strong points, and hope their evaluation system will put you on top.
You really need to read, and re-read, the section on how the award will be made, the basis of award, and the method and time allowed for a protest. You always have a much better chance of selling your bid before a decision is made on the award. People hate to change their mind after they have committed to a course of action; frequently, even if they are wrong, they will just dig in their heels and cop an attitude if you question the result. It is much better to quickly follow up – ask the questions, present your reasons, and see if you can make minor changes that will make them look at your bid favorably.
Filing a protest should be the last resort. The word “protest” is one that purchasing professionals hate to hear because it calls into question their competence. In their mind, they have carefully evaluated all bids, looked at the requirements and responses, pricing and performance information, and then made a best value decision. Depending upon the dollar volume, their decision has been reviewed by one or more bosses. Once the award decision is announced or published, the clock starts running on time for protests.
Most government agencies allow 10 days after notice of intent to award, or 10 days after award, for a protest to be filed. Many, many protests fail because they are not timely.
From my experience, I estimate that a protest will succeed less than 10 percent of the time. One reason is that people get angry and file a protest, knowing it will cause problems for the purchasing professional and delay the implementation of the award with the designated company. Once a protest is filed everything stops until an investigation is done.
Most protests are filed without proper basis, and are rejected quickly with only a 10-15 day delay. A complicated, well-reasoned protest may drag along for 90-120 days before a decision is made. If you are going to file a protest, it is best to review the basis and manner for protest with an attorney that specializes in this area. The legal review may cost $700 to $1,000, but filing the protest might be from $6,000 to $10,000. It is certainly worth filing if you have good reasons that are consistent with government regulations and if the award or continued business potential is substantial.
Here are some examples of a protest basis that usually will not work: My competitor is incompetent, and does not do good work; his price is too low so he obviously made a mistake; he is not a dealer for the specified product; there is no way he can install the product within the specified time schedule; my price is lower once you factor in my prompt payment discount; all of my installers are certified and I pay them more money, so you get a better job; the low bidder is not registered to do business in this locality; the product I submitted is superior in design and will perform better than that submitted by the low bidder; additional floor repair and prep was included in my bid, so mine is the better value.
Here are some examples of a protest basis that may work: The basis for rejection of our bid, which was low, was not germane to the scope of the project; the apparent low bidder did not provide the required bid bond with his bid; the product quantities stated by the apparent low bidder are inaccurate according to the specified areas within the physical site, thus resulting in an unrealistically low price; there is no record that the apparent low bidder attended the mandatory pre-bid conference; the apparent low bidder substituted an unapproved product (“all product substitutions required pre-approval at least 10 days prior to bid closing date”) and based their pricing on that product.
Whether it is a commercial or government bid, use their “No” response to learn how to do business with them in the future. “Harry, what could I have done better on our bid? How about telling me what I did wrong, so I don’t make the same mistake again? What should we be thinking about to prepare for next year’s bid? Is there any chance you could use us as an alternate for at least some of your work?” If not, try and leave them smiling.
There are at least 101 different ways that a purchasing pro can bury you if they put their mind to it. “I’m so sorry Joe, we never received your bid, and the bids closed at 4 p.m. today.” Or, “Jeff, your bid was found to be non-responsive because you failed to provide complete information in the vendor evaluation form.” Or, “The bid bond you provided was from a company that is not licensed to do business in this state.” There is always a next time unless you have developed a reputation of being too difficult. Never burn your bridges.
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