I don’t have to worry – We are the “incumbent”! October 2, 2015 at 10:34 am

You are the incumbent supplier in a Public Sector contract and it has come around for a rebid.  You and your team have been doing a fantastic job for years.  You know you have the client’s staff on your side because they tell you that your team is doing a good job and you have rescued the client’s business from several, indeed many, disasters of their making in recent months.  Relationships are good across both sides of the contract and when issues do arise they are sorted out quickly, with a great deal of mutual support and understanding, no matter where the issues originated from.  Altogether, with such a good track record, winning the rebid will be a cinch.

Or will it?

A very high proportion of incumbent suppliers will lose in this situation, even when the Public Sector client wants the incumbent to win.  Having analysed a few of these situations, I believe the reasons for such high failure rates are based in a few repeated areas of weakness.

Firstly, a good technically competent bid from the incumbent cannot win on its own!

This is because the competition is in it to win it.  The competitors will have predicted the main strengths of the incumbent (that of a proven track record and no new supplier transition costs) and they will have clear strategies to deal with and overcome these claimed advantages – otherwise they would not be bidding!  So the competitors must already have a good technical solution which they will claim has such overwhelming advantages for the client that the transition problems of it moving to a new supplier will be completely vanquished.

Next, the incumbent will be hesitant to propose a truly innovative solution or slash costs.

Why?  To do so would telegraph to the client that you had been “ripping them off” and that you had not shown ability to be as innovative as you would like the client to believe, in the past.  Otherwise it would not have taken a rebid to show these things up, would it?  So it is likely that the incumbent’s solution will just be tinkering with what it has now and real innovation (with all its associated risks) will not be permitted by its account management.
The competitors will not be hampered in this way and they will all be working from the perspective that unless innovation is fully demonstrated, they cannot win.  Radical thinking from within their bid teams will be positively encouraged.
Finally, the incumbent is frequently blind to its own arrogance and its management a bit complacent.  They think, “With such a tremendous track record to date with this client, what more do we have to prove?  The client knows how good we are!” They forget that anything not actually detailed in the response cannot be taken into account.  Even less so if they haven’t specifically identified it to be scored.  Plus, the entire team is blissfully unaware of the competitive intelligence advantage the competitors already have.

The competitors will have been analysing your track record with this client in great detail, through the information freely available through the Freedom of Information Act.  You have put this in the public domain through the minutes of your routine progress meetings with the client.  Every issue and failure has been highlighted.  For your competitors this information is gold nuggets.  Then they will show, on paper in the proposal, how these things would either have been completely avoided if it had been operating the contract, or how it would have resolved the issues with a much better outcome.  They can make all these claims on paper using hindsight, but the incumbent cannot change history, good or bad.
Sometimes I have even seen the incumbent get to the point that it does not bother with any competitive intelligence at all, relying upon the client’s all pervasive appreciation of its qualities to win.  It gambles upon its unique relationship to overcome all.
However, strengths and “uniques” are comparative.  This means you can only play these in your bid if you know what the competitors can offer against each one AND what the value to the client of each is.  It is no good in relying upon some secret insider knowledge either.  Once the evaluators see the difference between what they have asked and “reality” they will reissue the requirement in these areas or accommodate it in their analysis.  This will remove the advantage to the incumbent.  If you are the incumbent with insider knowledge, expect this to happen.

Remember that it is the client’s procurement team’s job to make sure that the invitation to tender documentation meets the fundamental principles of transparency and equality.  You might have helped them to put together the specification.  However, it is their job to sanitise the requirement so it does not suit any one supplier, particularly the incumbent.  Then they have to make sure that the evaluation rules are applied correctly and any bias (for or against you) is removed.  If they don’t, then the award decision may be subject to challenge and the procurement stopped, at least for the time it takes to resolve the issue.  Only a losing supplier wants this to happen; no one else does and the procurement team will do everything in their power to stop any potential for challenge before the competition is begun.

So, if you are the incumbent, what can you do?  Well, unless you have a truly competitive proposal, nothing!

If you want to retain the client, you must approach the tendering competition expecting every other competitor to claim and then seek to prove that it can do the job better than you have done and be cheaper.  So begin work on this basis.
Brainstorm all the proof points you have of your relevant capabilities in two sessions.  One for evidence of how well you have served the client and how well you know them and their needs.  A separate session for proof points of corporate capability relevant to the new requirements.  Ensure that these are populated in your response against questions in which these proof points can affect the scoring.

Look for real innovation and don’t be afraid to use it.  Slash your costs as far as you can (but always balance this against the impact on your quality score).  Use your knowledge of the client and what it really wants and come up with a game changer that the competitors will not foresee and which will truly impress the client.  Treat the competition as if your most feared competitor had been the incumbent and had performed well.  Then show the client that you really are the better choice.