Winning business – Tenders and Contracts – 5 Must Knows

Do you know your contracts basics? How do you tender for work?

contracts-and-tenders

There may come a time when running your business that you may need to enter contractual arrangements or tender for work.

Understanding contracts and tenders can open new opportunities for you, help you win more business and run your business more effectively.

Here are our 5  Must Knows for tenders and contracts.

1. Contractual requirements

Contractual requirements set out how small businesses operate. If you understanding contracts better you can improve the viability and security of your business.

Your state, territory or federal government in your country may provide information to improve your understanding. In Australia, you can refer to The Working with Contracts Guide.

The guide explains in plain English the essential ingredients of a contract, with useful and practical examples. It also covers legal jargon commonly used in contracts, the different types of contracts and useful pointers.

It’s worth noting that getting a contract right in the first place can save you time, money and heartache in the long-run, so you should consult a solicitor for legal advice before committing to a contract.

2. Selling to government

Since government agencies purchase a wide range of goods and services, and in larger quantities, they can be key to winning new business.

If you plan on selling your services to government agencies, you most likely will have to enter a tender process.

3. What’s a tender?

Tender usually refers to the process that governments and sometimes larger organisations use to select vendors for projects, goods or services.

The organisation will invite bids that must be submitted by a deadline.

The process can be likened to applying for a job. The organisation publishes the criteria and the requirements for the tender, and asks applicants to make a submission to meet the criteria and requirements. They will usually also publish details of how and when the successful vendor will be selected.

Government and organisations most often use an ‘open tender’ process for transparency, where they publicly promote or make a call for applications via newspaper advertisements, or website notifications. There is also something that may be a limited, selective or closed tender process which may be appropriate in some circumstances. This is where the organisation approaches selected vendors to apply for a tender.

There may also be opportunity for you to join forces with one or more competitors to meet the terms of a tender. This may be referred to as collective bargaining.

4. How do I apply for a tender?

First you need to find out how the organisation or government agency you wish to work for publishes its tender opportunities.

This will differ from state, territory and country as well as the organisation type. Most often, government agencies will have one central website or portal, which provides information on tender opportunities, guides on how to apply and may give you the option to sign up for alerts based on a specific criteria.

In Australia you can search the AusTender for Australian Government tenders or go to your relevant state or territory government.

If you’re not sure where to get the tender information you need, you should just contact the government agency or organisation and ask.

Most importantly when applying for a tender, read the criteria and requirements carefully and address each and every one of them. Present your application professionally and make it easy for the selection panel to glean the information they need from it.

5. What’s a Preferred Supplier arrangement?

Government organisations and larger organisations often use preferred supplier lists. This is a list of preferred suppliers that have met the necessary conditions/requirements for the supply of certain goods and/or services. The list may be used for selective tender processes.

Like a tender process, submissions are often called to join a preferred supplier list. If you’re not sure where to get the information you need on joining the list, you should just contact the government agency or organisation and ask.

Similar to a preferred supplier arrangements are Standing Offer Agreements (SOA).  An SOA is usually set up for frequently used products or services and means suppliers do not have to repeatedly respond to tender requests.

Arrangements differ from state, territory and country as well as the organisation type. Most often, government agencies will have one central website or portal, which provides information on tender and supplier opportunities. In Australia you can search the AusTender for Australian Government opportunities or go to your relevant state or territory government.

It’s worth noting that with any contractual arrangements you should consult a solicitor for legal advice before committing.

Kylie Fennell

I love creating and curating content, strategies and resources that will make your day. I’m a Writer, Marketer, Business Advisor and Trainer with 20 years of industry experience. I'm also a passionate home cook. By far though, my biggest role to date has been (and continues to be) Small Business Owner and Mother.