A Bid Bubble or the Professionalisation of Procurement?

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As my bidding colleagues and counterparts become busier and the bidding industry heats up across geographies, I find myself in the fortunate position of being in a career that seems to constantly be in greater demand.

This is obviously very good for the people who ended up on this career path, which is increasingly a profession in its own right. This article explores whether this is a fleeting moment or a more sustained professionalisation of procurement processes that result in the need for people like us, the bidding professionals.

What is the driver behind the need for more bid teams?
Anyone who works in medium to large companies (and increasingly even in small businesses) will be used to the mandatory training modules on conflict of interest and other business anti-corruption initiatives. This drive is led, in part, by the World Trade Organisation and their Agreement on Government Procurement (GPA) 2012 which requires member states to adhere to these rules. National legislation is increasingly powerful as well. The UK Bribery Act (2010) allows prosecution for corrupt practices (even for companies outside the UK). The US’s Foreign Corrupt Practices Act of 1977 has similar clauses regarding enforcement of US companies even overseas. Most other countries have their own similar legislation.

The net result is that the drive for anti-corrupt practices has, over time, led to a professionalisation of procurement for goods and services worldwide. This corresponds to the need for professional bid teams to be set up across all sectors.

To put it simply, this means the need for professional bid teams is here to stay.

Who benefits?
One positive reason for the probable sustainment of formal proposal processes is linked to the current economic climate. Our post-COVID world is steeped in inflation, sharp price increases and a turbulent global political environment.

This means that clients in both public and private sectors can much more easily demonstrate value for money and appropriate commercial clarity through the ability to compare bidders. For example, the ability to clearly assess the assumptions, exclusions and contractual red lines across a minimum of three bidders results in far fewer variations once a project has been won. Clear comparisons of companies’ abilities, methodologies, CVs and insurance provisions lead to reduced risks for clients. This is thanks to a clear understanding of the ‘small print’ by professional procurement teams.

On the other side of the fence, professional bid teams must be set up to assess the commercial and technical viability of the projects they propose to bid for. These teams can be expensive and require investment. In the long run, though, they benefit the bidding companies by providing confidence that whatever they are bidding for has been thoroughly considered and assessed prior to submitting a proposal.

That said, it is possible clients may be more likely to return to informal procurement processes when the boom times end and liquidity returns. This could mean the teams dealing with RFPs would be reduced or disbanded. The production of informal quotes would be returned to the after-hours tasks of project managers and other fatigued professionals with day jobs and little time for detailed commercial and technical responses.

However, this backtracking is unlikely. Once clients (both public and private) have set up systems and processes that formalise the procurement of goods and services, they should remain in place thanks to the clear benefits mentioned above. The days of informal contracts being handed out without formal paper trails and auditable documentation are over in most established industries and geographies. Even in the developing world, formal procurement processes are increasing due to a combination of legislative oversight and global norms being implemented.

Multinationals who have been burnt in the past by questionable practices in the developing world are now often at the forefront of the drive for auditable and transparent securing of projects to allay the fears of shareholders. This is also backed up by the increased enforcement of anti-corruption legislation across the world.

To reiterate the key point, there is a clear increase in a ‘norms and rule-based system’ of procurement processes across public and private sectors, and across multiple geographies. As a result, professional bid teams are here to stay.

This article was written by Michael Brown.

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