Responding to Invitations to Tender (ITT)
Practical guide to understanding the tender documents and submitting a successful tender for public service delivery.
Responding to an Invitation to Tender (ITT)
Once you have found a suitable Invitation to Tender (ITT), checked you are ready to bid, and submitted and passed your PQQ. you need to develop and submit your tender. This will set out the technical detail of how you will run the service, what you intend to achieve, and what you will charge. The content of the tender will form the background of the contract which, if successful in your bid, you will eventually sign and deliver.
It's important that tenders are realistic, and that you use this opportunity to plan ahead and map out how you would set-up, deliver and manage the service and your other contractual obligations. Only embark on the process of writing a tender if you are sure it is what you want, and you have the resources to do justice to your application.
Before you write your tender make sure you read:
- Contract Notices: finding Invitations to Tender (opens a new page)
- Pre-Qualification (opens a new page)
- Are you Ready to Bid for a Contract? (opens a new page)
- Glossary: Public Service Delivery (opens a new page)
Then continue on this page to read:
- Tender Process
- What Must be Included in the ITT Pack
- Service Specification
- Expressions of interest and tender packs
- Building a case - writing your tender step by step
- Contract (Tender) Award Process and Criteria (opens a new page)
- Recommended Reading
Or back to the Commissioning and Procurement frontpage.
Tender Process
The process for completing a tender:
- Find the opportunity and register your 'Expression of Interest' (EOI)
- Complete any Pre-Qualification (PQQ). If successful,
- Receive and analyse Invitation to Tender (ITT); submit any questions
- Write and submit your tender/bid
What Must be Included in the Invitation to Tender Pack (ITT)
Statutory commissioning bodies make available Invitation To Tender (ITT) packs when they are ready for potential providers to bid for a contract. ITT's include:
- Details on the service or the outcomes that are being purchased
- Terms of the contract, including how much money it is worth, geographical area, and the timescales
Invitation To Tender (ITT) information packs must include work on the following principles (taken from the IDeA website):
- You must ensure that you provide the same information to all tenderers.
- You must not do anything, intentionally or otherwise, which could give any advantage to some tenderers over others.
- You must provide all tenderers with the contract documents, including the contract specification and contract conditions.
- You must state the criteria you will use to evaluate tenders, for example, quality, price, technical merit, aesthetic and functional characteristics, cost effectiveness, after-sales service
Principles for ITT Packs
Commissioning bodies must ensure all potential providers are given the same information. If questions arise from any of the providers, these should be answered and the answers publish, so all providers have again equal information. As well,
- You must ensure that you provide the same information to all tenderers.
- You must not do anything, intentionally or otherwise, which could give any advantage to some tenderers over others.
- You must provide all tenderers with the contract documents, including the contract specification and contract conditions.
- You must state the criteria you will use to evaluate tenders. Under the EU Directive and UK Regulations – EU Directive Article 53 and recital 46; UK Regulations, Regulation 30 – only two award criteria are permitted: ‘lowest price’ and ‘the most economically advantageous tender.’
- If you plan to award to the most economically advantageous tender, the directive and the regulations include an open-ended list of possible criteria linked to the subject matter of the contract or the manner in which it is performed. For example, quality, price, technical merit, aesthetic and functional characteristics, cost effectiveness, after-sales service – Article 53(1) and Regulation 30 (3) to (5).
Social Value
The Social Value Act 2012 means all public bodies must consider the 'social value' of submitted tenders. Read our full explanation of how social value functions in contracting.
Identifying special criteria
Commissioning bodies are allowed to specify specific social criteria, for example;
- Recital 1 of the EU Directive refers to EU case law which has clarified that public bodies can refer to the social needs of people likely to be affected by a proposed contract provided. Such criteria are linked to the subject matter of the contract and do not give the purchasing body unrestricted freedom of choice on the purchasing body.
- Recital 46 of the EU Directive states that you may use criteria:
“...aiming to meet social requirements, in response in particular to the needs – defined in the specifications of the contract – of particularly disadvantaged groups of people to which those receiving and or using the works, supplies or services which are the object of the contract belong".
For example, in a contract to provide educational support for children excluded from school, where such children are disproportionately minority ethnic boys, you would be able to use an award criterion on how well the tenderers’ proposals will enable the children receiving this support to re-enter and succeed in the normal educational system.
You must also state the weighting you have given to each criterion. Alternatively, you must list the criteria in descending order of importance.
Service Specifications
These are included in the ITT, and set out what is expected in the design and outputs / outcomes of the service itself.
From Think Smart, Think Voluntary Sector: good practice guidance on procurement of services from the voluntary and community sector (PDF 194KB) June 2004, published by the Office for Government Commerce;
'The specification or statement of requirements forms an integral part of any service contract. VCOs will base their pricing and resourcing structure largely on this document. It is vital if good, well-structured and innovative tenders are to be received that VCOs can fully understand and empathise with the specification. The most frequently mentioned problem at this stage is the issue of prescriptive specifications which prevent VCOs from using their knowledge and experience to design cost effective and viable solutions to required policy outputs.
'Inappropriate risk allocation is also a serious cause for concern amongst VCOs. One quoted case involved the delivery of a service by a VCO to clients who were referred to it by a third party organisation over which the VCO had no control or influence. However, the VCO was paid a set amount for delivering the service to each client. Referrals fell dramatically from those which had been estimated in the specification, meaning that the VCO’s income from the contract was not even covering its fixed costs'.
Building a case: Writing your tender step by step
1. Practical tips to managing a tender submission
In preparing a tender, organisationss should:
- Designate someone to take overall responsibility for compilation of the tender
- Read all of the documentation carefully and note the key points
- Check the organisation can meet the principal requirements and that it will have the necessary resources to fulfil the contract, if successful
- Note the duration of the contract
- Compile a checklist of all items to be provided in, or with, the bid
- Use the checklist before finalising any bid and submitting it
- Bind bids so that they are easy to read
Download the tender checklist (PDF 37kb) to help you compile your own checklist of items.
The task of putting the bid together needs to be planned for. Time needs to be set aside to plan the bid’s structure and content, ensure that all points are answered and that the case made is a convincing one. Do not leave it to the day before the bid deadline. Time is needed to develop and refine your case, gather evidence and get constructive feedback.
2. Analyse the specification
The type and style of specifications vary considerably. In broad terms there are two types – although some are combinations of the two:
Output -based
This is the most common. Here the specification lists outputs: volumes of activities. An example might be 'to provide meals for fifty people over +65 years of age'. This means that as a minimum, you must provide that level of output.
Outcomes-based
This is a far rarer form of specification. Here, the specification lists an outcome: the change they want to see as a result of the service. Instead of listing a level of activity, they may instead state they want to see 'reduced hospital admissions' or 'better social integration'. Other examples taken from specifications include:
- “Preventing multiple debt”.
- “Reducing fuel poverty”
- “The service provider will operate an accessible town centre advice centre open week days between the hours of 09.30 to 16.30….”
- “The commissioner wishes to commission services and projects that will contribute to the economic and social regeneration of the estate…”
This type of specification gives those bidding for the contract far greater scope to meet the outcome in different ways. Outcomes-based specifications are considered to be best practice, but are uncommon because commissioners are wary that they are too unspecific.
Some useful pointers in analysing a specification include:
- What’s driving it? What is the background to the specification?
- What are the key drivers? – User demands? Dissatisfaction with the current arrangements? Policy change? Are there any hidden agendas?
- What is the current situation? How are services currently provided?
- Is there an existing provider if there is, could a transfer of undertaking be involved?
- Is it achievable?
- What risks are involved?
- Are the assumptions about levels of demand sound?
- Can it be done in the time and resources available?
3. Are you ready to bid for a contract?
Opens a new page - our checklist to see if you are ready.
4. Research
Ensure that you have a thorough and up to date understanding of the needs and issues facing the intended service users. How have their needs changed? What has worked in other places? How personalised is the service you intend to deliver?
5. Test your ideas
Sometimes the written specification only describes one picture. It is useful to probe what is wanted, what is the background to the contract might be and what are the concerns uppermost in commissioner’s minds. Time spent with commissioners can give a valuable insight into their thinking and concerns.
6. Gather Evidence
It’s not enough to do good work – you need to prove it.
Organise your organisation’s evidence base. Here are some of the types of evidence that can be referred to in your bid:
7. Writing the bid
Tender documents may have different formats. Some may require the tenderer to answer questions and some others will have no structured questions and leave it to the tenderer to decide what to write. As part of the selection process tenderers may also be invited to provide a presentation to detail and illustrate their offer.
Remember that your tender documents may form part of the contract. There may be no further opportunity to re-negotiate what you have submitted.
Whether you are successful or not, don't forget to ask for feedback at the end of a tender process. It will help you in your future tender submissions.
a. Important content to consider
Having decided you're ready to tender, here are some of the questions you should consider in writing the content of the bid.
Your organisation's strategic advantage
- Why is the service being tendered?
- What are the gaps in the current provision? How will your service improve this?
- What is your experience of the client group involved?
- What is your experience of the geographic area?
- What is your experience of delivering similar services?
- How many people have benefited from your services to date?
- What is the competition like?
- What added value can you bring?
The service provision
- How will you deliver the service?
- How many people are you planning to reach?
- What geographic area will you cover?
- Will you use new approaches / technology etc.?
Costs
- What cost does the service entail?
- What is the impact of the opportunity on your existing operations and services?
- Will funds provided through the contract enable all costs to be covered?
- Will TUPE apply to the contract? If so, what are the financial implications?
The outcomes
- What will be the outcomes for service users?
- What will be the outcome for the wider community?
- Will there be other relevant benefits?
- What levels of customer satisfaction are you expecting to achieve?
Partnership working
- Would a consortium bid with other providers be favourable?
- Which other organisations or authorities would you seek to involve, and at what stage?
Risks
- What risks does this initiative entail?
- How can you minimise or address them?
Exit strategy
- Will the work continue after the funding comes to an end?
- How will the end of the contract effect staffing in your organisation?
b. Three approaches to shape your offer
A bid can be planned and designed around three elements:
The quality of the service provided
Does it meet the needs of the intended user and the requirements of the specification? How can the provider show that they can deliver a consistent service that will deliver outputs that lead to lasting outcomes?
The price
How much will the commissioner have to pay? This should be based on the likely full costs incurred by the provider. Is the price competitive?
The reliability of the provider
Does the provider have the structure and expertise to properly deliver the contract? Has it got the management capacity to take on the contract? Is it a reliable and competent organisation?
There is usually a playoff between these elements. An organisation that has failed to invest in sound management systems might not be able to deliver or guarantee consistent quality. Quality might not come cheap. There are instances (known as the MEAT – Most Economically Advantageous Tender) where commissioners can reject the cheapest price on the basis that a more expensive provider might deliver greater benefits.
c. Designing and costing your bid
Designing and costing the bid involves researching what is needed and wanted and then coming up with an offer that you are confident that your organisation can deliver and covers all of the costs involved and will meet the commissioners interests.
Four tasks are involved in this stage:
Focusing on the intended outcomes
Increasingly commissioners are more focused on what the service will achieve for the user or community as a whole rather than what the service does to get to this result. This shift to outcomes is a significant one. Outcomes can be described as all the changes and effects that happen as a result of services provided. Some outcomes are about creating a positive change (for example, a client being able to live independently) or preventative nature (for example, stopping young people getting involved in anti social behaviour. Outputs are what you do and provide; examples of outputs could include running an advice service, providing counselling support or setting up a new project. In the past statutory bodies were inclined to fund an activity in the hope that it would meet a need. Their focus was on the means rather than the ends. Outcome based planning means starting the commissioning process by setting out the intended outcomes that service providers will be asked to achieve or work towards a desired outcome.
Some outcomes can be very long term aspirations (such as reducing crime or improving the health of the community) others are more specific (such as enabling a young person to get a job). It is important to find out what outcomes are important to commissioners and be able to show how your work can deliver or contribute to outcomes.
Describing the methods that you will use to achieve the outcomes
Often the bidding process requires bidders to produce a methods statement or delivery plan that sets out what services the bidder will use if appointed. The methods statement should show how the services will deliver the intended outcomes. You need to show that your choice of method is based on experience and evidence that the method chosen is likely to deliver outcomes. It is useful to show:
- That the intended methods have been properly tested,
- That the intended methods are based on best practice and have measurable quality standards.
- That the service methods are flexible enough to cope with different and changing needs.
Costing the bid
Open our page 'Understanding your Costs' on costing for bids, full cost recovery, and common causes of misunderstanding.
d. Common bid mistakes
Bid writing needs dedicated time and an organised approach. A group of commissioners identified some common bid writing mistakes:
Not fully reading the material
Not following the commissioner’s instructions, ignoring specific requirements or bidding for what you want to do rather than what is being commissioned.
Assuming prior knowledge
Bidding on the basis that the commissioners have personal knowledge of the organisation so there is no need to explain or make the case. Some organisations have omitted key information on the basis that they ‘know us already’. Some public bodies have procurement rules that only the information supplied by the bidder can be used to make assessments.
Using a different set of language or jargon
Overuse of a jargon or insider language can create barriers and blocks to understanding.
Not following the prescribed format
Often commissioners will lay out how they expect a bid to be structured and completed. Departing from a prescribed format can make the assessment process harder and in extreme cases lead to a bid being excluded.
Using a standard bid
It is tempting for organisations to have a standard bid that they cut and paste all new bids into. This can lead to all bids looking the same and not being tailored to specific needs.
Under selling
Voluntary organisations are sometimes reluctant to acknowledge their successes, their expertise and track record. They sell themselves short.
e. Stylistic Tips
The following points are designed to help in writing bids:
Show that you understand the needs and outcomes
Your bid needs to show that you understand and have researched the community or user need and have an appreciation of why the commissioner wants this service, how it fits with their objectives and other strategies. The bid needs to show that you understand the context and local situation.
Start with a fresh approach
The bid needs to be drafted to meet the specific and unique needs of each tendering exercise. See each bid as a separate project that needs researching and a creative approach. Just because you have been delivering a similar service does not mean that you will win the bid.
Focus on the detail
You need to check that all specific requirements are met and that requested supporting information (such as policy statements or business plan) is available. It is important to check that by bidding you could be indicating your future agreement to the commissioner’s draft contract.
Get the style right
Use a positive and active style. Although the bid needs to be formal and business like it is still possible to show that your organisation has a commitment to the service, is enthusiastic about doing it and has the experience and energy to deliver a service that will achieve outcomes.
Follow the criteria set out in the specification
If the commissioner has published the criteria that they will use to test and select bids this can provide a useful framework and starting point for structuring and drafting the bid. The bid needs to show that you can meet all of the elements of the criteria. The commissioner should be able to easily and quickly find the information they need to measure your bid against the criteria.
Keep to any prescribed format
Be diligent about following any specific instructions or requirements made by the commissioner. Ensure that you answer each and every question. There have been occasions when bids have rejected early in the assessment process because the bidder has preferred to bid in a way that they like rather than use the commissioner’s format.
Start at the outcomes
The bid needs to show what you will change, improve or make different. Managing and providing services in an efficient and compliant way is only part of it. It is useful to show the kinds of outcomes that you anticipate the service will be able to deliver for individual users and communities.
Show how it would fit in with your organisation
The bid needs to show that what you are bidding for fits with your role, strategy and competence. The bid should that the service or project fits in with your other activities and that you have the skills and competencies to deliver it.
Be able to back up and evidence any statement
Be wary of making great sweeping statements or claims that cannot be evidenced. Ensure that you have evidence on hand to support all the claims that you make. Evidence might be past work, evaluations, feedback and quality assurance systems.
Get feedback
Throughout the drafting process it is worthwhile to have a few people who can act as sounding boards or critical friends. As well as proof reading the bid, they should be encouraged to give precise feedback and play a “devils advocate” role.
Get approval
Organisations need to agree who has the responsibility to sign off bids and agree that they can be submitted. The bid checklist below is designed to act as a useful final check.
Ensure that it is submitted on time and in line with any set requirements
Usually public sector bodies have strict rules about how bids should be submitted. These rules are designed to prevent corruption and ensure fairness between all bidders. There is usually little flexibility in the application of the rules.
8. Checking the Bid
- Does the bid answer all of the question and conditions required by the commissioner?
- Might the bid involve existing staff being transferred? - Have the potentials costs and issues of complying with the TUPE regulations been considered?
- Does the bid price need to include VAT?
- Does the bid cover all the likely direct and indirect costs involved in setting up and delivering the project?
- Does the bid highlight the organisation’s experience and track record
- Does the bid relate to the criteria or marking system that the commissioner intends to use?
- Does the bid show that the bidder understands the issues facing the clients?
- Are the contractual terms and expectations stated or implied in the specification satisfactory?
- Is all supporting information (e.g. accounts, business plan etc) requested by the commissioner attached to the bid?
- Can all claims and selling points be backed up with evidence or real examples?
- Is the bid submitted in line with the requirements outlined in the ITT?
Recommended reading
- Pre-Qualification Questionnaire for tender evaluation - useful guidance from the Office from Government Commerce with downloadable standard forms
- NCVO's pages on Full cost recovery
- Introductory Pack on Funding and Finance - Procurement and Contracting (PDF 716kb) - A guide to the rules and procedures that constitute public sector procurement.
