How could “buying stuff” sound so painful? Procurement people spend, spend, spend, it should be heaps of fun but the biggest spenders of all, government agencies, are most probably the most boring of all. Hoops to jump through, rules to follow, decisions to make and some might argue, backsides to cover. Tarred with this sticky brush, Euan Stitt is using insights from his time in government procurement to help business actually win tenders.

Why? Well, first of all, “It’s more fun,” he admits, “On the procurement side, I always think the best score you can get is a draw. But on the tender response side you get the chance to win. It’s much more dynamic and simply much more fun.”

And, second of all, now is possibly the best time ever to be in the business of selling things to the New Zealand government.

A flood of supply contracts are set to be won by businesses as the government strives to become more efficient in the way it buys goods and services.

Stitt knows about the inefficiency first hand. He jokes that “gut feeling” is the primary tool our government departments currently use to find suppliers with the best value.

He is exaggerating, of course, but the Ministry of Economic Development agrees there is a need for reform and has planned sweeping changes in the way the government obtains everything from pens and pencils to major infrastructure.

The government will look for newer, better deals on supplies, hoping to save up to $3 billion annually, and experts like KPMG director Adrian Wimmers and CIPS vice chairman Peter Cooper say this reform means big opportunities for the private sector.

The Government has already signalled its intention to tender IT hardware, vehicles, office supplies and health products before the end of this year, with major infrastructure spending including roading, rail and broadband to follow. The question is, which companies are prepared for this unprecedented spend-up?

“It’s a time of massive opportunity and a time of massive risk. If you don’t get one of these contracts it could seriously affect your business”, Stitt says.

Stitt has convinced the multinational bid-winning group, Shipley Associates, to set up in New Zealand to help local businesses take advantage of the upcoming opportunities. He will be a director of the branch, carefully making the transition from the buyer side to the seller side. At first he will only help suppliers in sectors he is not involved with in government, but by December he will have given up his entire portfolio on the government side to work exclusively on assisting bids.

With its global HQ still in Farmington, USA Shipley now operate in the UK, Europe, and, in the Asia Pacific region, have offices in Japan, Australia, Korea, and now, New Zealand. They helped clients win bids worth over $70 billion since opening the Sydney office in 2003.

This quietly-spoken Scotsman is obviously convincing: not only did he manage to persuade the Shipley Asia Pacific owners to enter into this joint venture; he has also attracted investment from New Zealand businessmen Stephen Nicholas (CEO of Openside Accountants) and Tim Collins (Director of IN-Business Media). Initially located in Wellington, Stitt has already started planning a satellite office in Auckland with public training for senior executives scheduled in Auckland and Wellington in October.

Winning tenders can be a tricky and expensive business, and most companies have no idea what the decision makers want to see. Companies often scramble when they see a tender, grabbing a hodgepodge of employees from all over the firm to put together a rushed response in the 10 days or so given to them. Then, after the ensuing chaos, cost and late night heroics, the average firm wins just one in five attempts.

What a company needs to do instead, Stitt says, is to get prepared long before a tender is posted. A well-prepared business can win bids four times as often as the average business. In fact, Shipley has a global win rate of 82 per cent on the more than $200 billion worth of client bids it assists with.

“You need to have business development systems, processes and information up to scratch so you can hit the ground running.”

Companies also need to offer more than just the cheapest price, Stitt says. They need to address underlying issues affecting the buyer organisation, which requires knowledge built up over time.

“The tender document will list only, say, 10 percent of the organisation’s actual needs, and, if you answer just that 10 percent, you’re not addressing the underlying organisational issues and risks and you’re not going to win.”

And everything, Stitt says, must be done in a short executive summary.

“A decision maker will be evaluating something like 20 tender responses, and if you’re not standing out – if you’re not pressing their buttons straight away – chances are you’re just going to get lost in the noise.”

Stitt recommends businesses start preparing now, for opportunities coming up this Christmas and beyond. There are opportunities for any business, even if they haven’t responded to a government tender before, he says.

“It’s quite a steep learning curve but all opportunities are open and free. It’s a chance for new players to come in and secure some serious business.”

For more information

• Ministry of Economic Development.   www.med.govt.nz
• Shipley New Zealand.  www.shipley.co.nz
• Useful analysis of government “procurement reform” from Simpson Grierson  www.simpsongrierson.com/publications