Collaborating with other businesses can bring a number of benefits such as improved market presence, shared resources and knowledge, and the reduction of costs and risk when exploring new markets. Increasingly businesses are also coming together as a means of accessing larger contracts.
To learn more, we spoke to CDS advisors Gill Joy and Gavin Tosh, who have collaborated together themselves to provide unique specialist support to CDS clients on collaborative tendering.
Q1. Tell us a little more about yourself?
Gill: I have 30 years’ experience in business management and consultancy, focussing on collaborative projects and programmes. I set up Intend Business Development in 2006, which helps SMEs and social enterprises compete with larger national players on public sector tenders.
In 2011, Gavin and I decided to collaborate to design a new training programme for consortium bidding, working closely with the CDS team. We continue to tender jointly for various contracts where our complementary skills can add value for clients, and we have worked as CDS specialist advisors for consortium co-operatives since 2013.
Gavin: I am a practicing solicitor and started my own niche legal business in 2009 specialising in business law. Before I was a solicitor I was a contracts manager in large engineering-based companies, and was frequently involved in tendering for contracts, including collaboratively.
Q2. Why is tendering an important area for businesses, including SMEs?
Gill: £10billion worth of business is put out to tender each year in Scotland alone, with a huge number of private and third sector contracts also subject to a tendering process. These contracts will be for goods and services that smaller businesses are well placed to provide, yet so many SMEs aren’t going after them, essentially closing their doors to this enormous source of business.
Q3. What are the barriers for SMEs?
Gill: Particular barriers for SMEs include their small size, lack of specialist expertise, and limited resources to identify opportunities and prepare tender responses. Larger organisations can have in-house resources dedicated to the tendering process, but this is usually out of the question for SMEs. Small companies are encouraged by buyers to form consortia in order to bid for contracts, however, sometimes collaboration can be viewed as a barrier in itself. Most SMEs don’t really know where to start, from finding the right partners to getting a sound agreement and working together to create a winning bid.
Q4. How can collaboration help?
Gavin: By collaborating with other businesses, increased capacity and a wider range of available resources and skills make it possible to bid for larger contracts. Coming together under a single brand in a consortium co-operative can really consolidate the members’ joint offering and put them on an equal footing with larger companies pitching for the contract. With each member business focusing on its own strengths, the customer gets a team of true specialists in their respective fields instead of a larger organisation which may not be strong in all areas.
Gill: Collaboration also means more eyes out there to spot opportunities in the first place, and the costs and time involved in the tendering process are shared, making it less of a burden on smaller businesses. An added benefit of working closely with other businesses is the significant amount of organisational learning that each partner can derive from the experience.
Q5. What are the options?
Gavin: There are different ways to collaborate when tendering. The most common approach is to have a main contractor with a number of subcontractors, however, this is rarely a collaboration of equals. Subcontractors may have little say in important decisions and can be subject to the whims of the main contractor in terms of what work they get and when they are paid.
Tools and techniques to improve the position of subcontractors in this position are available, however for a truly co-operative collaboration where all parties have an equal say, there is also the consortium co-operative model.
In a consortium co-operative, members work together for a common goal whilst retaining their own brands, identities and control. Members can be limited companies, partnerships or individuals and the membership can be of any size from two businesses upwards. Each member business has an equal say on consortium activity, no matter its size, and both exiting and bringing in new partners is simple. As a recognised legal entity with limited liability, the model provides a durable yet flexible framework for collaboration.
Q6. What support is available?
Gavin: CDS’s principal form of support is called Consortium Expert Support – it is free of charge to eligible businesses and provides assistance to form a consortium co-operative. You can get in touch with CDS for more information about consortium support.
Q7. Are there any examples of successful consortium tendering?
Gill: A CDS client which has experienced success in tendering is The Wee Agency, a collaboration between a group of PR, IT and design firms to offer an integrated digital marketing service. The members were already collaborating on an informal basis, but bringing their skills together under a single brand has enabled them to successfully pitch for more ambitious contracts.
Gavin: Another consortium which has seen great results from tendering is the Community Resources Network Scotland (CRNS) Reuse Consortium, a nationwide collaboration between social enterprises managing waste resources at a local level through recycling, reuse and reduction. It won a contract from Fife Council to supply second-hand household essentials such as white goods and furniture to be given to locals on low incomes who need them, and hopes to support other local authorities in this manner in future.