Andrew Morrison of AM Bid outlines what buyers will be looking to get assurance on when evaluating tender submission
Following a sharp decline in tender activity during March and April, we are now seeing the return of opportunities to bid for contracts in the social housing sector. However, bidders need to take account of the changed environment that we are all in (the “new normal”), especially when the virus clearly has some way to run.
In this article, I will briefly outline 13 main areas that buyers are likely to focus on when assessing bid submissions through a Covid-19 lense. These include:
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- Financial Stability – Attention will inevitably be placed on business finances, especially the company credit rating and perceived failure risk. Organisations which have good levels of working capital and positive acid ratios (above 1.0) should have nothing to fear, although you may still expect that some buyers will want to see accounts and budget forecasts for the current trading year. Also, do you have good banking facilities arrangements in place e.g. access to finance / additional lines of credit if needed?
- Health & Safety – As a responsible employer, you firstly have a duty to protect your employees. This currently has its own challenges which can include testing for corona/antibodies; personal protective equipment (PPE); employees maintaining social (physical) distancing from fellow workers and residents / members of the public; and ensuring that your employees have access to adequate welfare arrangements which do not increase the risk of contracting the virus, or passing it on to others. Of course, behind this interest, will also be their absolute priority around the health and safety of their tenants.
- Capacity Planning – There is an inevitable backlog of maintenance repairs and safety inspections following 2-3 months of lockdown. What capacity will you have to overdeliver on the usual levels of jobs? Will your staff (and sub-contractors) be willing to work additional hours to help clear the backlog including during some evenings and weekends?
- Contingency Planning – Business resilience is more than just financial resilience, it also includes having measures in place to maintain contract performance even if key staff go off sick. What if 25% (or a higher %) of your staff went off sick at the same time? How would you resource the contract? While these were often considerations for buyers, they have understandably moved up the priority list now.
- Further Lockdowns – While we hope that there will no need for further lockdowns, if cases and deaths rise exponentially again, then there will likely be further lockdowns. How will your business and staff cope with this? Importantly, how would your business cope financially?
- Materials Supply – Supply chains (both at home and abroad) have been considerably impacted from the lockdown. What contingency arrangements do you have in place to ensure that you will have the needed supplies to deliver the contract? You will need to provide assurance that you will be able to complete work in a timely manner.
- Environmental Considerations – One positive consequence of the corona crisis is that we are all being kinder to the environment. This includes less commuting and a greater emphasis on home working where this is possible. Sustainability / the environment have been factors for some years now in many bid evaluations, however, the more positive changes that you can evidence (without an adverse impact on your contract delivery), the higher your environmental scores will be in the tender evaluation.
- Innovation – Another positive is the increasing uptake of innovative means of service delivery e.g. using Augmented Reality (AR) to provide short video tutorials that can help tenants to solve some of their own repair needs e.g. turning water off; resetting heating timer, etc. How is technology and innovation influencing your service delivery? Even if some of your enhancements are still at the trial / piloting stage, they would be worth mentioning to show a direction of travel.
- Social Value – Steps to tackle the inevitable recession will include a focus on what the social value elements of contracts can deliver e.g. local jobs, apprenticeships (there will be large numbers of young unemployed people) and using local suppliers. It will be important to put extra time and thought into designing meaningful social value offerings.
- Client Meetings – While these were usually face-to-face meetings, the rise in video conferencing during the crisis (including the screen sharing function) has shown the art of the possible. Do not be prescriptive; instead give your client a range of options to choose from.
- Brexit – While the UK exited the EU on 31st January 2020, we remain on the EU membership terms until 31st December 2020. The position after that will depend on whether a comprehensive trade deal can be agreed in time (or whether an extension to the timetable will be agreed). If no trade deal is in place (or one that is not so good for your part of the sector), then expect to see currency fluctuations e.g. a decline in the value of sterling which will likely have implications for your costs and access to finance. There is also less EU National labour in the UK and this trend is likely to continue. Your bid response (especially where materials and labour are concerned) will need to set out how you will deal with these variables.
- Scottish Independence – This is another factor to be aware of, especially if you are a Scottish-based business either bidding in Scotland or to the rest of the UK; or a UK-based business bidding into Scotland. What effect may the process of a second referendum have on your business? What if the outcome is a vote in favour of independence with all the changes (including perhaps to the currency) which that will bring?
- Risk Register – You should provide a comprehensive risk register with rationale for risks selected, probability and impact scoring along with mitigations. This will go a long way to provide the comfort that clients are seeking that you have a well-managed business that can evidence effective strategic and operational planning.
Of course, you will also need to have staff in place to write the bids. In some cases, bid staff have been furloughed. As we are likely to see an increased amount of bidding to catch up on planned procurements, will you have enough bid resource? Many organisations are unaware that specialist bidding assistance is available at the times that you need it. Look for professional bid staff (i.e. members of APMP UK – the bidding profession’s membership organisation) and especially those with experience of successful bidding to the social housing sector.
Andrew Morrison MSc FCIH CP APMP MIoD Founder of AM Bid is a qualified housing and bidding professional