If an organisation undertakes the expensive and time-consuming processes involved in a tender, it goes without saying that it wants to get the best out of it.

Yet not every firm goes the right way about structuring the tender process to ensure they get the best responses from bidders that meet their business needs. 

This is borne out by figures from ALD International. While the number of international tenders has increased significantly over the last five years, the firm says that the percentage of tenders officially or unofficially cancelled remained stable at around 25%, which means that one tender out of four never reaches the decision-making stage!

So what should fleets be considering?

One area that is vital to look at from the outset is the target of your project, according to Alphabet International. The firm's Dr Nancy Storp, general manager international sales & marketing, and Mario Hermans, international sales manager, explain: 'Often, this will be cost savings, but how should these savings be realised? Of course, the potential leasing companies will be challenged to offer very competitive pricing, but the true savings must be searched in the day-to-day business; savings are much more sustainable than a low price.

'A good and efficient approach is to focus on quality and offering of the leasing companies before starting the pricing exercise. Items like country coverage (in case of an international tender), account management, consulting products, IT systems and direct driver contact are typical benchmark topics to compare the different leasing companies. The first selection can already been done here, by excluding leasing companies that offer different approaches then requested. Also contract negotiations should start here, to avoid discovering "show-stoppers" in the last phase, when you are short before the final choice.

'When these first rounds are done, monthly lease rates have to be considered. Depending on the characteristic of the fleet, it might not be the most efficient way to compare too many lease rates, as the prices are only suitable for a limited period of time. Especially in case of a user-chooser strategy, where models that will be configured by drivers are mostly not identical to the ones that were benchmarked in the lease tender. In these cases, it makes sense to concentrate on interest, management fee and additional services like fuel card and insurance.' 

Arval agrees that there are a wide number of objectives that should be considered over and above lease rates.

Denis Ferault, head of consulting at Arval, says: 'Tendering is not just about seeking the lowest prices. Tendering is only a step in a global process starting with clarified, validated and prioritised objectives and a clear strategy. For example, what are the realistic and achievable targets in terms of fleet performance, cost reduction, environmental performance, vehicle selection and driver satisfaction? Only after, tender is a possible option amongst all operational, tactical and strategic decisions.'

Once objectives have been agreed, pricing is a key area where better results can be achieved by more effective collaboration, according to ING Car Lease.

Clive Buhagiar, head of public sector account management, says: 'For example, miscellaneous charges – such as fines admin and re-scheduling costs – are the hidden expenditure which can change the balance in a competitive situation. By working together on a clearer brief, we can ensure decision-makers are not left comparing apples with pears.

'From a pan-European perspective, it is important to understand that manufacturers may change model types across international borders. Here, clarity and co-operation is even more important to achieve consistency in quoting. It is also essential to be upfront and realistic about timescales. Too little time and submissions may lack depth, too much time and they may be lost among other priorities. To get the best proposals, it is important to have a definitive cut-off point for alterations to the tender and to ensure there is no slippage – decisions should be made within the promised timescale.'

One other key area is process and methadology, according to ALD International, which says that preparation is key.

Benjamin Daels, international sales manager – new business, recommends the following steps.

Step 1: Purchasing team selection and tender's targets definition    

* Select an experienced international team with the support of regional/local stakeholders; discuss with the end-users and agree on the key elements involved in the process.

* Define roles and responsibilities of all levels involved.

* If the project is driven centrally, make sure the international team has the mandate from all the entities involved.

* Appoint a sponsor at executive level.

* Define clear and internally agreed targets: savings, process optimizations, supplier base consolidation, …

Step 2: Process definition

* Define the most suitable format to be used, i.e, Request For Information, Request For Proposal, Request For Quotations?

* Select the criteria and evaluation process

* Decide which vendors have to be included/excluded

* Define the minimum requirements

* Create the documents keeping in mind the targets of the tender

* Define a reasonable time frame (4 to 6 months for step 3 to Step 5)

Step 3: Tender issue

Step 4: Response analysis – negotiation round

Step 5: Decision and contract signature

Step 6: Implementation

Mr Daels concludes: 'It usually takes one year between the selection of the team and the signature of an international agreement with the selected vendor(s). Before investing time and resources in such an ambitious project it is crucial to make sure that it has good chances to deliver tangible results; the keys of the success are in the preparation phases and in a constant and transparent communication with the internal stakeholders and with the possible vendors. '

TENDER DOCUMENT CHECKLIST:

Once you have set out your targets and identified the most appropriate suppliers, it is crucial to prepare a good tender document. Simon Spremberg, supply chain manager at Fleet Logistics, provides a checklist to help fleets compile that perfect tender document.

* The tender should give a clear and not too elaborate description of what any potential bidder should offer. It should provide clear information on the specification of the product or service and a clear idea of the volume that is expected.

* The format of the tender document should be clear and appropriate to allow the bidder enter the offer. Standardised offers should be encouraged to give comparable offers. A good idea is to use a protected Excel-spreadsheet so that bidders cannot add their own additional columns with unrequested information. Also, leave enough space for comments.

* If you are using a protected Excel spreadsheet, make sure that everything is 100% correct, as the bidder will not be able to make changes. I recommend the use of different formulae, to calculate totals for example, instead of letting the bidder enter their own values. This gives you more control.

* Make sure the bidder understands that he should enter net or gross values, and include or exclude fees.

* Ask the bidder to enter only the real values that he intends to stand by. For example, in a leasing tender, provide a car's list price in the tender instead of asking the bidder to do so. By pre-setting this value, you can avoid bidders arguing about the current list price.

* To ensure clear and comparable offers, make sure the bidder is only quoting prices he has total control over.  Try to exclude prices that the bidder has no control over, such as vehicle transportation costs. You may already have a different supplier for that or you might want to make a separate tender.

* Always keep in mind that you have to analyse the tender document in the end. So build it up in such a way that you can easily copy and paste the relevant facts into an overview.

* When sending out the tender, set a short but realistic deadline for receiving the bids. Be sure to cover all your company's guidelines; for example, do you need a signed reply on paper, does the bid have to be uploaded to a bidding system and so on.

* It is a good idea to include a Non Disclosure Agreement to maintain confidentiality.

* After your analysis, be sure to give a quick feedback, so that you can quickly remove the bidders with unsatisfactory replies. 

* Hold a review meeting with all suppliers that are qualified and try to fill in any information gaps that might have been left.

'In my opinion, a good and clear tender is a very important factor that contributes to a successful client/supplier relationship. It ensures that you have chosen the right supplier, because you know exactly what you are looking for, you have asked the right questions and the bidder knows exactly what to answer and offer. Carried out this way, it is unlikely that two potential partners meet who were not made for each other.'