Having an existing solution in place (even one that is working brilliantly), and knowledge of how to deliver your existing contract can be a big disadvantage. One that could lose you the rebid if you aren’t alert to the dangers.
Your incumbency gives you a lot of potential advantages in the rebid. One is that you already have a solution in place delivering the existing contract. You have staff, systems, assets, facilities and a management team. You have reporting processes, performance management and measurement already working. You know the costs of the contract and how these vary over time. You know what works, and potentially what doesn’t work. All of these give you potential advantages over your competitors.
But too often we see incumbents losing because their rebid solution fails to change or improve enough on what they were delivering in the existing contract. It’s something procurers criticised when we surveyed them on their opinions of incumbents’ rebids:
“They submit the exact same bid they submitted for the first contract without regard to spec changes”
“Overpriced shoddy bid that did not address the ITT but merely rehashed what they had done before”
“Complacency and just presenting the current service with no new developments”
And there are plenty of real examples of rebids lost because of a lack of change in the rebid from existing delivery. For example see the real case studies here
Also there are other reasons for not relying on what you are presently delivering in your rebid:
• As mentioned in one of the quotes above (and others we didn’t use), the requirements for the new contract may not be the same as the existing one. Ignoring these changes in favour of the ‘proven’ approach can make your solution less attractive than one the meets all the customer’s future requirements – it can even make it non-compliant. Thinking you can overcome this with a strategy based on appealing to the customer not to take the risk of change is something we have dealt with elsewhere.
• Relying on the underlying thinking or structure of your existing solution for your ‘new’ solution can make it uncompetitive. For instance, just because a central hub for services worked until now, doesn’t mean it will be better than a site by site approach in the future. Simply improving, or shaving costs from an uncompetitive solution won’t necessarily make it a winner.
• Technology will have moved on since your last bid for the contract. Technology can have a huge impact on the required structure, staff numbers and delivery of a solution. Not looking at what can be done (and saved) by bringing in the latest technology could make what was a great solution look obsolete (and have costs that are too high) vs a solution built from scratch.
• Other costs might also have changed since your last bid. Relying on what your existing solution cost assumptions are now could mean you are too expensive vs your competitors.
• Your competitors’ solutions will have moved on over the past few years. Your existing solution might have been best 3 or 5 years ago. Is it now?
• You might even find that your own solutions for new contracts have moved on a lot since you proposed what you are presently delivering on your existing contract. Presenting a solution for your rebid that isn’t as up to date as you would present if this was a new contract for you is not the best way to win.
It’s not as if bidders don’t realise this is a potential issue. Ask most experienced bidders about the need to re-evaluate existing delivery for a rebid, and bringing innovation and a new approach for the new solution and they will tell you it is important, even an obvious thing to do. Yet still the issue comes up in rebids. Why?
Bidders in many incumbents face a number of pressures which can directly or indirectly lead to an over reliance on the existing solution in their rebid:
• Pressures from operational teams. Operational teams on the contract being rebid often have more input and influence on a rebid solution than operational teams would have on new bids. Operational teams should always be involved in a rebid. In fact rebids suffer if they are ignored. But there needs to be a balance. An operational team running an existing contract (especially one that is running well) will inevitably have a bias (even if unconsciously) towards the existing solution and the thinking it is based on. This needs challenging by the bid team, who should be looking at completely different ways of delivering the customer’s needs – and focusing on what the customer will want in the future – not what they wanted in the past. Operational teams will also often be overly influenced by their relationships with their existing contact in the customer. Usually these are the customer’s contract management team (who will also often be looking for more of the same). But for rebids others will usually have more influence, and the ultimate decision making role. Their preferences and requirements can be underplayed (or even unknown) by the operational team. Which can lead to real problems if these other influencers are looking at radically different requirements (like a much lower cost, even if that means sacrificing some quality for instance).
• Pressures of time. Often rebid preparations start later than they should. This can be due to an expectation that the contract will be retained (see more below) so less work is required. Or it can be because new bids aren’t prepared for over a period of months in the organisation, so why should time be spent on rebids? Or it could be that bidders prefer working on new bids to rebids, so avoid them (to spend more time on new bids) until they are imminent. Whatever the reason, the result is that there is often insufficient time to take a root and branch approach to reviewing the existing delivery and thinking about, analysing and testing a new solution. So by default the existing solution (with some improvements) is what the team present.
• Pressures of existing ‘strengths’. Because incumbency does bring strengths these can often outweigh the potential problems of making changes to the solution. The strength of being able to offer a ‘no risk’ transition (because we’re already on the ground) means people fight against making changes to the delivery that would require a more comprehensive transition. The strength of a ‘known’ management team means there is pressure not to make changes to it. The pressure of having assets and offices / warehouses / depots already in place means there is a push against replacing them, getting rid of them or moving them to locations more appropriate. The proven nature of (or money already invested in and short term cost of replacing) existing technology, processes or systems creates an inertia against introducing new ways of doing things. The apparent strength of a strategy based on ‘it’s a real risk for you to change Mr Customer’ weakens any drive to make changes to the existing solution. Bidders have to be strong, have conviction, and be prepared to have arguments with others in the business if they are to find an appropriate balance between apparent strengths of the existing position and the relative strengths of making real changes. Sometimes they decide it isn’t worth the fight. After all if they can show they only with along with what senior managers were telling them, they won’t be blamed if the rebid is lost, will they?
• Pressures of overconfidence. Whilst in more and more sectors organisations can’t rely on winning their rebids, there is still an expectation in many parts of organisations that they will. That overconfidence often underlies some or all of the pressures we’ve listed above. Overconfidence can be subtle, as can its impact on the rebid. But that impact is real and is what we find loses a lot of rebids. When we ran our survey mentioned at the start of this article the biggest complaint procurers had about incumbents was that they were complacent. No incumbent sees themselves as complacent. They don’t see their confidence as over confidence either (at least not before they lose). But in our experience there is a direct connection between what incumbents see as confidence in the likelihood of a rebid win, and what procurers see as complacency in an incumbent’s rebid.
Overcoming the pressures of inertia
It can be tough to overcome the inertia created by the above pressures and by your existing solution. But if you are determined to win more rebids there are a number of things you can do:
• Always start your rebid preparations early enough to be able to understand the changes your customer is looking for and early enough to give you time to create a new solution that meets those needs
• Always involve your delivery team in the rebid – but always be ready and willing to challenge any assumptions they make about the superiority of the existing solution. And be willing to overrule the existing solution if you feel a new approach has more chance of winning
• Never be afraid to start your thinking for a new solution with a blank piece of paper (or as we call it a Green Field approach). Even if it is a lot tougher to do so than starting from where delivery is now.
• Never take the approach that you are favourite to win your rebid. Treat it as if you are the underdog who has to put in the best possible solution and price if you are to win
• Use your previous performance and delivery to support your arguments as to why you are the best option for your customer in the rebid. But never rely on them alone. The customer’s focus is on the future, yours should be too.
• Don’t rely on ‘risk of change’ as the reason for your customer not to choose your competitors. Sometimes the customer’s biggest perceived risk is not to change if what you are offering isn’t what they need for the future.
See how we can help you put together a winning rebid solution and submission here