What can we learn from the rapid evolution of electronic bidding and procurement systems?
The relatively new processes are faster, easier to administer and encourage additional bids – but contractors and suppliers continue to make some stupid mistakes, say representatives of an electronic bidding platform and municipality which has embraced e-bidding.
Speaking at the Ontario General Contractors Association (OGCA) symposium in mid-April, Leslie Williamson, the Town Of Milton’s procurement manager, said her municipality was among the first to work with eSolutionsGroup Ltd.’s Bids&Tenders platform when it was originally introduced about 16 years ago.
Then, not everyone had personal computers or email addresses, so the municipality set up a dedicated computer at its public library and provided instructions on how to sign up and use the computer to contractors not familiar with the process.
Things have evolved, and e-bidding usage has dramatically increased, to the point that more than 250 public sector owners in Ontario use the Bids&Tenders platform today, said eSolutionsGroup principal Alison Carden.
Construction bids represented almost a third (32.47%) of the 23,278 bids issued in the past three years. Most of the opportunities (87.42%) were public and open, with 7.12% by invitation only, and 5.31% subject to prequalification.
Carden said the overall value of construction tenders in Ontario based on the past two years’ projects awarded reached more than $5.7 billion. And over the past three years, most of the bids (82.88%) come in below the projects’ estimated costs, compared to 17.09% equal or above the estimate.
On average, the opportunities attracted 6.41 bidders per submission, of which 45.65 per cent were straightforward opportunities where the lowest price compliant bid would win the competition. The rest included qualitative RFP responses and mixed price and qualitative approaches.
About 50 per cent of plan takers submit bids. Carden said most who declined to bid (5,172) said they could not handle the opportunity due to present workload, while 3,412 reported they were unable to quote competitively.
Most bids are submitted at the last minute before deadline – with 75.61% placed within 10 minutes of closing. This late bidding process can cause problems when people stretch it too far and miss the deadline. In the old hand-delivered system, these late bids would be rejected as non-compliant, but under the e-bidding model, the municipality doesn’t even see the late bids, said Milton’s Williamson.
Procurement agencies understand the reason that contractors bid at the last minute – including late quotes submissions from sub-trades, but Cardin suggests that e-bidders can still populate and prepare as much of their bid as possible electronically well before the deadline, with just the last-minute numbers going in just before the close.
Most bids are straightforward, but in at least one case, the bidding authority issued an incredible 87 addenda – and there were “hundreds with 20 or more,” though the average construction addendums per bid was 2.3, meaning the great majority proceed without any complications.
Williamson said bidders should take care about their submissions.
The majority of buyers, about 60 per cent, believe that companies can improve their submissions. “Think about ways you can really differentiate your company,” Williamson said. “Make yourself stand out and don’t be afraid to be excited about what you are offering.”
As an example, even if the bid requirement doesn’t specify you have achieved Certificate of Recognition (COR) safety certification, it doesn’t hurt to say that in your bidding documentation, Williamson said.
Most municipal authorities read electronic proposals from cover to cover, and “they do pay attention to every detail including numbers, spelling and grammar,” she said.
“Price is important, but so is overall quality of your response and offerings . . . Aa high quality response is your golden ticket to the presentation train.” And you shouldn’t assume just because you are the incumbent you should be lax in your bid preparation. “If you are an incumbent, pretend we have no idea about you, she said.
With electronic bidding, non-compliant submissions are rare (just .38% per cent), in part because late submissions are simply not counted in the first place. Commonest mistakes are missing documentation or mandatory information, failure to follow instructions or incorrect bond and security information,” Cardin said.
Sometimes these non-compliant submissions are unintentionally humorous. In one case, a contractor asked to submit proof of bid bond documentation filed a response: “My word is my bond.” Needless to say, his business was immediately disqualified.
Williamson says contractors should:
- Read over the entire proposal before you start responding to questions;
know what is being asked/evaluated and ensure you provide information that covers this;
- follow instructions carefully;
- use a checklist;
- don’t cut and paste (it is embarrassing when you post information for another organization in your submission);
- don’t be afraid to ask for questions if something is not clear; and
- ask for a debrief – even if you win – because you may find out many insights on how just a slight improvement can increase your chances significantly in the next opportunity.
Cardin said it is important to have a reliable internet service and it may be worthwhile to have alternative services available in case their is a service outage at bid deadline. She also encourages bidders to check their in-box, because often if an addendum is issued, even if the bidder has responded early, the bid will be kicked out of the system unless it is resubmitted. “You should add more than one contact to your bidding account and ensure that the contacts on your email account are up-to-date,” she said.