Bid 101 – The Ultimate 2023 Guide to the Procurement Process
Whether you are a seasoned bid expert or brand new to the tender world, navigating the procurement process is mind-boggling and complicated. RFPs, RFQs, RFIs (and even RFTs!)—sourcing and procurement can be a veritable alphabet soup of acronyms, and so many sound almost identical. No wonder people get confused; what do they all mean? But do not fear; we are here to help.
Our Bid 101 series will cover everything you need to know to smash the procurement process. In session one, we will cover the following:
- All the essential acronyms you need
- The different types of documents that clients receive from a buyer/contractor
- How response documentation should be formatted
What is a tender in business?
The tender process is a compilation of written requests sent to potential suppliers. These documents require the buyer’s information to evaluate and select a preferred supplier. Tenders are often sent out in a specific order to ensure the suppliers meet basic and complex requirements.
The first question you must ask every single time is – what is the purpose of this document? There are many names for tender documents, each with a specific purpose.
RFI – Request for Information
This is usually the initial step in the bidding process. It is primarily issued to non-qualified suppliers and focuses on research. It aims to acquire important information such as the company name, registration numbers, addresses, and a broad product overview. Regarding formatting, this should be in Q & A format only. MS Word works best as the answers may have marketing material/imagery as part of the response.
DDQ – Due Diligence Questionnaire
Due diligence questionnaires are frequently issued early in the bidding process. This in-depth document is based on compliance, corporate structure, company/product management, and appropriateness for the business. Before moving on to the RFP stage, this is your chance to establish any “must-have” requirements. The best format for a DDQ is MS Word in a Q&A format. Some companies use portals that allow for electronic responses – but ensure the portals you are using allow the supplier to download as they will need to keep a record of their response.
RFQ – Request for Quote
The purpose of the RFQ is for pricing only; this is more applicable if you have a specific service or product and are just looking for costs only. The ideal format for an RFQ is MS Excel; this allows for easier comparison against each offer.
SQ – Security Questionnaire
Data centre locations, country/state data laws, strict system requirements, and mandatory certification requirements. A security questionnaire is issued alongside an RFP or shortly after; this is not a document meant for scoring. Instead, it is to ensure suppliers can meet your specific requirements. An SQ works best in MS Excel, with Yes/No/Partial compliant dropdowns – with additional space for comments if applicable. Some companies may use a portal at this stage for electronic records. However, this will be very similar to the layout of an RF. The aim is to identify those who comply with your technical and security-related requirements.
RFP – Request for Proposal
The RFP will ultimately allow you to identify the suppliers who have demonstrated value and understanding of your requirements. The questions should cover all aspects of the company, from values, people, and financials to products and processes. You will use the response to take your shortlisted suppliers through to presentations or final negotiations.
An RFP comes in many formats, but we highly recommend you use MS Word as this will allow for easy input of imagery, graphs, supporting documents, and videos. Some companies use Excel if they have multiple products/locations where requirements differ. However, be aware that this is only sometimes a user and issuer-friendly format. MS Excel is designed for text and numbers; if you need the respondent to input graphics or other crucial information, think about a different strategy. Portals are also frequently used, but make sure your portal permits downloads because it’s excellent practice for a corporation to keep a copy of its submission on hand at all times.
The Bottom Line
We understand that was a lot to take in, but we hope you can use this article as a reference point the next time you bid on a project. And, while we cannot guarantee that it will win you that business, you will have a much greater chance if you master the basics.
Join us next time, and we will arm you with the most valuable tips and tricks to nail the tender process.
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