Considering applying to government tenders but feeling overwhelmed by it? You are not alone.
Many MSME owners, like yourself, recognise the potential and importance of government tenders, but are apprehensive to apply for them. The myth that government tenders are suitable for large enterprises only, and MSMEs stand till chances of winning government contracts, has prevented many capable businesses from exploring tendering opportunities for business growth.
In this article, we will talk about seven practical tips and points to keep in mind when applying to government tenders, to increase your MSME’s chances of standing out and winning the tender.
Tips when applying to government tenders in India
Finding new customers for B2B selling is difficult. But as a MSME owner this is something you cannot avoid.
To ensure your MSME’s growth you will have to find new customers, build contacts, expand your network, quote competitive prices, and keep customers happy. Government tenders help you to beat all these challenges and accelerate growth for your MSME.
Keep the following tips in mind to help you get government contracts:
1. You are competing with many others and not the only business applying for the tender
You are competing with thousands of other large and small businesses when you apply to government tenders in India.
There are thousands of public tenders (state and central) released every month, and thousands of businesses apply to relevant tenders. And though this makes the situation competitive, there are a couple of things you can do to increase your chances of winning:
- Apply to tenders you are eligible for
- Prepare the tender documents meticulously
- Write the bid proposal as per the tender guidelines
- Consider sub-contracting options in case of high-value tenders
With e-tendering becoming the norm, eligible bidders from across the country can bid for tenders. The online tendering system and e-procurement portal (CPPP) are easy to use, and keeps the process fair and transparent, making it convenient and beneficial for MSMEs to bid for tenders.
2. Train your team on how to find relevant tenders
Half the battle is won if you apply to the right government contracts. There are thousands of new tenders live on the CPPP portal and GeM portal every month from railways, defence, power, energy, and other sectors. Though most contracts come with some standard guidelines, every tender requirement is different, and they come with specifications.
The secret lies in being able to sort and filter the right government e-tenders that you know you stand a chance to win.
This is however a slightly tricky piece. Finding the right tender from thousands of tenders is not easy and can be time-consuming and tedious. Here are some best practices to ace this step:
- Register your business on a tender website to get daily tender alerts on relevant government tenders
- Consider using relevant filters based on industry, tender value, location, organisation, tender due date, and more to get matching tenders
- Identify one or two team members to follow-up on every tender alert, check eligibility and requirements, and shortlist the one right for your business
3. Invest time in researching the tender notice
A quick scan of the tender invitation will let you know if you are eligible for the tender opportunity or not. For instance, if the tender is for a specific civil engineering project and your business has little prior experience working on similar projects, or the team lacks the technical skill requirements, there are lesser chances of your business winning the tender.
It is therefore recommended to spend time in reading the tender information thoroughly. To your resources, the ask should be to identify the specific requirements, w.r.t. technical requirements, quality parameters, certifications and credentials required, location, timelines to begin with.
As a pro tip, it’s smart to search for MSME tenders, that is, tenders announced exclusively for the MSME sector. The government is encouraging MSMEs to participate in the e-Procurement system to help them scale and grow their business. In fact, almost 20-25% of all government tenders are usually given to MSMEs.
As such, if you want to win tenders for your business, the smart choice is to select the right tenders and understand the requirements thoroughly before proceeding.
4. Make smart calculations
Did you know?
- One of the many benefits of MSME tenders is that EMD and tender fees are often exempted?
- Most businesses spend almost 1-2% of the tender value amount on preparing the tender proposal?
- If your MSMEs annual turnover is significantly lower (20-25%) than the tender value, there are lesser chances of you winning the government contract?
While these are not always true, these can affect your bid. As such, it is important for you to keep all factors in mind when calculating costs. You must consider profits, inflation, timelines, shipping, resources, and any other operational costs you might be bearing before sharing your bid.
As mentioned earlier, the tender invitation authority will meticulously go through all details shared. Pricing, though an important component in awarding tenders, is not the first and only component. Hence, price your product/service competitively based on market standards.
5. Get expert help when required
Your MSME may not have the resources and expertise required to write proposals for government tenders. And that’s why it’s advisable to take help when required.
There are several tender consultants and agencies that can help with bid consulting services to help you write an authentic, accurate, and detailed proposal. For instance, a Class 3 Digital Signature Certificate is required for many government tender applications. A consultant can help you to get one.
It’s also a good strategy to include your internal teams in the proposal writing stage to provide accurate, relevant details.
6. Submit a well-drafter proposal
Your proposal is what will get (or not get) you the contract. So, it’s imperative that this piece is drafted thoroughly.
As stated previously, seek professional bid writing services to polish and submit a fine proposal. While writing the proposal, keep the following in mind:
- Ensure you are preparing proposals for active tenders only i.e., check the due date and check internally if your bid will be ready in time
- Keep answers to the common tender questions in hand e.g., industry experience, team size, technical skills, health and quality standards, certifications and patents etc.
- Write confidently, highlight your strengths and achievements, provide details on your working methods and how you would be able to complete the tender order efficiently
7. First impressions matter
Thousands of bidders will apply to the latest tenders with the tender invitation authority receiving many applications. And their procurement team will be looking at specifications meticulously to shortlist the most suitable applications.
This means, in order to make the cut, your tender application must stand out.
Apart from adhering to the specifications mentioned in the tender notice, a best practice to follow is to design and present your proposal in an easy-to-read format. Include design elements such as images, charts, graphs, info-graphs etc. to highlight key points and make the right first impression.
Growing your business with tenders in India
With online government tenders many of the previous tendering challenges have been minimised. For instance, earlier, awareness and access to information were common obstacles that kept MSMEs and emerging businesses from applying to government tenders. Detailed paperwork, location, multiple rounds off discussions, were other challenges that prevented MSMEs from leveraging tendering opportunities.
However, with time, most of these challenges have been removed. Today there are tender websites, MSME growth platforms, and other online sources to find relevant tenders and other business opportunities.
As a MSME owner, remember that government tenders are a great opportunity for your business to grow. It helps to:
- Create trust in and credibility for your brand
- Keep a regular flow of earnings
- Explore other opportunities in private and public sectors
On that note, prepare well, plan and be confident in your tender applications for your business.