What makes a good & fair tender process?

When commissioning new fundraising projects, services and partnerships, or reviewing existing contracts or consulting, many charities put work out to tender. This means inviting bids from prospective suppliers to identify the most suitable partner to carry out the project. But the tender process differs greatly from charity to charity, it takes time and resources, and can be costly for all parties, so while it is an important process for selecting suitable partners for some projects, it requires complex management and is not always the best or only course of action.

A good tender process will identify suitable partners that can work well with the charity not only to achieve their objectives, but those that will be a good fit with the team, culture, ethics, working practices and budget.

It will help charities identify risks and mitigate against them, ensuring they can make informed and responsible decisions on expenditure, while also protecting their reputation and ensuring quality of service is maintained. Ultimately, the process should ease decision-making, ensure value for money and reduce administrative burden.

Of course, tendering is a two-way process and it can help suppliers to identify whether the project and the charity is right for them, just in the same way as charities will use it to identify the right partner for their roster or project. A positive, open and accessible tender process will inspire healthy competition among a small group of well-suited suppliers, encouraging innovation and creativity.

There is no ‘one size fits all’ approach to tendering and one organisation’s view on when a tender process is needed might differ widely from another. As such, a charity’s approach is often set out within a procurement policy or strategy, defining if and when work will be put out to tender, and when it may not be necessary. The process itself needs to be appropriate to the size and scope of the work being commissioned.

While it’s important that organisations take a consistent and fair approach, there needs to be a degree of flexibility to reflect a charity’s changing needs as fundraising programmes evolve and to reflect the differences in tendering for various kinds of provision, for example a new CRM system versus a creative agency or merchandise supplier.

For small charities and those with low budget projects, tendering may not be necessary or appropriate and a simpler strategy of securing competitive quotes may be sufficient. In such circumstances, the work required for agencies to complete the tender process may outweigh the advantages of winning the work. Conversely, for the largest projects, a tender may be too sizeable to manage in-house and specialist tender or procurement agencies may be brought into play. Many organisations have a threshold where the tender process only kicks in for projects above a certain budget level, or when particular circumstances arise.

From a charity’s perspective, whatever approach is taken to tendering, it’s important to be clear about when a tender is required and when alternative measures may be sufficient, such as a straight-forward pitch presentation, securing competitive quotes and carrying out due diligence checks, or even agreeing to undertake work on a trial period.

For existing supplier relationships, where both parties are happy with progress to date, an audit or review prior to contract renegotiation may negate the need for a full-blown tender.

A charity’s tender process should be clear, open and transparent, seeking to identify who can deliver the work and at what cost, establishing potential partners’ availability, capacity and competence to fulfil the contract. The goal will be to secure a partner that understands what is required and is both willing and able to deliver it – whether alone or in partnership – at a fee that works for both parties.

The tender may well be the first step in a long-term relationship, so it’s important to invest time in getting it right, finding not only the correct solution, but also a good fit.

While the tender process will vary, typically it will include a brief for the work required, a proposal request[1] from prospective partners and submission of tender bids or presentations from a selection of applicants. It will also incorporate due diligence checks, such as establishing credentials and that the organisation is financially secure, its compliance measures (both in terms of regulatory requirements and best practice as set out in the Code of Fundraising Practice), references from other clients, and final selection. When it comes to tendering for creative work, prospective partners may well be asked to complete a relevant strategic or artistic task.

A pre-qualification questionnaire or other qualifying stage may be introduced ahead of the formal tender to gauge interest in the work, quality of potential suppliers and to shortlist applicants. Some of the largest charities will ask new prospective partners to tender to join an organisation’s roster of prospective partners for future work.  

Collaborative procurement is becoming more common across the UK and can help to make tendering more efficient for all parties, while offering combined purchasing power. This approach can add to the complexity of the tender process while streamlining it for multi-disciplined campaigns that require multiple partners.

Consider how you will manage the tender process internally, balancing the need for expertise on both the procurement side and from fundraising and other related departments. It’s important to have a clear understanding of who will be responsible for doing what, ensuring that decision-makers in the fundraising team and other related departments are involved and have opportunities to feed in and meet the prospective teams.

As with all organisational policies and processes, a charity’s approach to tendering will need to be updated and reviewed from time to time. It’s helpful to have a set procurement policy and tender process in place, but one that has some degree of flexibility, taking a common-sense approach to avoid unnecessary bureaucracy, recognising when a full tender is not required and what alternatives may be considered.

There is no singular approach to tendering for work and the brief for prospective suppliers will differ depending on the nature of the work required, but there are some key elements you may wish to consider. This includes making it clear what the charity is looking for from potential partners, identifying any priorities, setting clear timescales, and explaining how suppliers will be evaluated.

The brief will likely include (as relevant):

• What is the organisation’s mission, its values and goals?
• What work is required, and the specific objectives for that work?
• What are the key requirements of the work itself, reporting processes and compliance procedures, and any set timescales for the work or project?
• Why is the work needed, what are the current or previous processes and is there any other background information or context that will be helpful to prospective suppliers?
• What are the future plans / aspirations for this area of work?
• What specific credentials, industry standards, systems or service will be required?
• Which individuals or teams will be working with the successful applicants?
• What ongoing processes or systems will the work need to fit around? (Consider providing flow charts or other explanation to illustrate how such systems currently operate.)
• What is the approximate budget?
• What are the key dates, including the deadline for applications and timeline for selection?
• How will tender applications be evaluated, and what credentials / best practice standards (including compliance with the Code of Fundraising Practice) may be required from prospective partners?

While charities’ policies and processes for tendering for work will vary, there are some common principles that can help to ensure that any tender is not only comprehensive but draws out the best from participants and encourages a strong and successful partnership.

The tender process should be open to all prospective partners with the appropriate skill set, credentials and experience. Charities will need to be clear about how their process works and what they are looking for from the successful party. Additional support may be needed for small businesses, individual consultants and those new to the tender process.

To ensure the tender process is accessible and that everyone has a fair chance, prospective partners should be treated equally throughout the process and this means being given access to the same information. This can be challenging when one of the applicants currently works with (or has recently worked with) the charity, but it’s important that every effort is taken to even up the odds.

A robust and comprehensive process will seek to identify suppliers that can meet charities’ needs, while also ensuring they have the right skill set and experience to deliver quality results efficiently and to mitigate against risk. How charities go about this might include checking credentials and references from current or past clients, and face-to-face meetings with the team that will be responsible for carrying out the work, which may differ from those involved in the pitch process.

Due diligence will also include taking steps to ensure that any fundraising partner is committed not only to acting legally, but to complying with the standards set out in the Code of Fundraising Practice and that they will positively represent the charity.

A tender process can be both intensive and costly to all parties and, for this reason, it’s important that charities and potential partners approach it with honesty, integrity and respect. Once a decision has been made, charities should be clear about what that is and why, providing considered and constructive feedback to all participants.

London’s Air Ambulance Charity was looking for an experienced telephone fundraising partner to support a new mass market fundraising campaign. It was important to get the right support in place – an agency that the charity could trust with its brand, who offered a genuine partnership approach and mirrored the charity’s values.

The charity requested all compliance documentation ahead of the pitch meetings so that it could be reviewed as part of the shortlisting process, allowing the pitch meeting itself to concentrate on the approach to the specific campaign and the team chemistry/fit. After the pitch meetings, the decision makers independently scored the responses against a fixed scorecard and met as a group to discuss which agency to appoint.