Critical Success Factors in Public Tender Processes: A qualitative analysis from the view of a consulting engineering firm
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Norconsult is a leading consulting engineering firm in Norway, with a strong position in the public infrastructure sector. However, preparing to bid on a tender can be a challenging task with many variables to take into consideration. This thesis aims to understand more of what contributes to a good tendering process, and which factors are important to increase the probability of winning the bid. The study builds upon relevant theory in the realm of public procurement, supplier selection, and organizational theory. Past tender evaluations from the clients have been analyzed, and an attempt to quantify important criteria has been conducted. Some tenders have been explored more in depth, both from the point of view of Norconsult as well as details in the written evaluation from the client, in an attempt to get a broader understanding of the process. Furthermore, several semi-open interviews with employees in Norconsult closely affiliated with tender work have been conducted. The past tender evaluations indicated that the lack of a task description had the highest correlation to losing a tender, while task comprehension, organization offered, and reference projects were most correlated with winning bids. The interviews highlighted the importance of understanding the tender and its evaluation criteria, and that it is important to convey to the client that you fully understand the project and that the required organization is available to execute it. The tender team should include key members of the project team, and, according to interviewees, the tender manager should have long and multidisciplinary experience combined with commercial understanding. The tender- or project manager’s experience is a topic of debate. While many of the interviewees felt that this was critical, theory suggests that it is, but only to a certain extent. It is almost a requirement to have a well-qualified manager in order to win a tender, but greater experience has diminishing returns, and resources could perhaps be better spent elsewhere. The tender manager’s experience is not only important to the external part, in reassuring the client that the project is in qualified hands, but also to make the internal tender process as efficient as possible. Although pricing was not a focus point in my research, there is evidence supporting that price is of secondary importance in tenders, at least in the context of public procurement and engineering consultant services. The clients are more concerned with low risk in relation to realizing projects. Both theory and typical weighting of price criteria in public tenders support this.