Module 8

What Happens if I Win?

• Celebrate Your Success and Get Ready to Work Hard
• Your Obligation as a Bidder
• Risk Management
• Insurance
• Other Considerations

WHAT HAPPENS IF I WIN?

This module discusses some of the factors you need to consider once you’ve won a bid.

Celebrate Your Success and Get Ready to Work Hard

Congratulations! You have won the bid. Take a moment to celebrate your success — and congratulate the members of your team who helped to assemble the proposal.

Now it’s time to get down to work and consider some next steps.

Your Obligation as a Bidder

YOUR BID IS A LEGALLY BINDING DOCUMENT

Be aware that your proposal is considered a legally binding contract.You must be prepared to fulfill the terms of your bid exactly as specified in your proposal or quotation.You have limited opportunities to change specifications or to make product substitutions. What you have proposed is what is expected.

WILL THERE BE SOME CONTRACT NEGOTIATION?

With ITQs and price-sensitive bids there is usually very little negotiation.Your bid has been accepted on the basis of a stated price for a stated product or service, and what you’ve quoted is what is expected, and nothing else. The only exception to this is when there is a significant change in the volume of the original order.

With an RFP there frequently is some negotiation that takes place to refine the scope of services, particularly if there are value-added components that are provided within the proposal. There may be some discussion about the specific tasks in executing the project, the project timeline may be adjusted due to unexpected circumstances, and buyers may even seek slight modifications to the products or services recommended within a proposal if new information arises. However, the proposal has been accepted on its core elements around product, service, delivery and price, so don’t expect this to vary too much with any negotiations. If your strategy was to lowball in the proposal with a view to “upselling” in a negotiation phase, don’t expect to succeed.

Risk Management

Risk management is often overlooked.We tend to focus all our energy on winning a bid, but there are often real risks involved in winning the bid. It is best to consider these risks upfront. Here are a few things that you should consider before you submit your bid — and reassess when you’ve won the contract:

• Do you have the necessary financing and credit available to carry you through periods of low cash flow? Some clients can be slow to pay, or you may be expected to carry inventory.
• Is your supply chain solid? Do you have backup plans in place regarding suppliers, import issues, etc.?
• Is your team stable? Can you still provide seamless service if a key player leaves?
• Have you worked through these considerations with your strategic partners? A new partnership or strategic alliance takes time to mature. Make sure it can withstand the stress of delivering on an important contract.
• Don’t forget about your existing customers. A new major contract can easily divert your attention from existing clients and customers. Don’t lose core business for a short-term contract.

Insurance

A government contract usually requires suppliers to indemnify the government against any losses it incurs as a result of the contractor’s activities in performing the contract. This may also be the case with other buyers. To ensure that contractors fulfill this indemnity, buyers require evidence of adequate liability insurance. Arrangement and payment of this insurance are generally the contractor’s responsibility. However, government can sometimes arrange for the contractor (if it will be delivering services directly to the public on behalf of the government) to obtain the insurance through the government.

Other Considerations

Are you prepared for the consequences of success? Here are a couple of other issues to keep in mind if you’ve been selected to be a supplier to the Vancouver 2010 Olympic and Paralympic Winter Games or an event of similar scale:

• Business volume can increase quickly — you may need to ramp up your infrastructure or operations in order to deliver your products and services.
• Once your foot is in the door, be prepared for more opportunities to come your way.