Met Office misses out on contract renewal
Last renewed for a five year term in July 2010, it seems that this time around the Met Office hasn’t kept its contract to provide the BBC with weather services.
From what I can gather, the tendering process is still underway, with no contract award having been formally announced as yet. Two firms are believed to be in the running, Metra, New Zealand’s national forecasting service and Meteo, a collaboration between the Dutch national forecasting service and the UK’s Press Association (not confirmed).
A Met Office press release states that they are disappointed with the decision, which to me rules out the possibility that the Met Office simply decided not to tender at all. Instead, somehow, their tender didn’t make it through the preliminary round(s).
While the exact reasons for the BBC’s decision are all conjecture at the moment, many companies are blindsided when they don’t win a retendered contract that they’ve already successfully delivered for some time.
It may not be all about cost
Despite the UK media having a collective hissy fit, loudly proclaiming that the contract must be going to the lowest bidder, in fact the BBC is not obliged to pick the lowest cost option, although cost will most certainly be a factor.
Instead, the contract notice clearly states that it will be awarded to the ‘most economically advantageous tender’ (commonly known in procurement circles as MEAT). Without access to the final ITT and specification, we can only guess at the finer details of what ‘most economically advantageous’ means in this instance but, in most cases, it’s a combination of cost and ‘value for money’. Value for money comes in many forms but in simplistic terms equates to ‘the most bang for your buck’.
That might mean that some or all tenderers offered similar costs but one offers better technology, broader services, unique services or even just a better understanding of the BBC’s long term plans. Furthermore, a tenderer offering a higher cost may even win the contract, if what the BBC gets for that price is deemed worth it in MEAT terms. If that does happen, I’ll be very interested to see how it plays out in the press. I’m no Shafali but even I could predict the storm of outrage that would follow such a decision, if reported provocatively.
Of course, there is a possibility that one tenderer will offer both lower cost and better value for money; there’s also the chance that the BBC is actually looking to ‘streamline’ its weather services and the winning bidder’s lower cost may reflect a simplified range of facilities.
So what happened?
The BBC has used the Met Office for forecasting services for 93 years, so a lack of experience and knowledge of the organisation can’t really be held up as a factor. Likewise, it would be unusual for the Met Office to have no understanding of the BBC’s financial or technological expectations for the new contract term.
Interestingly, the contract notice also states that the BBC ‘reserves the right to accept part of a tender unless the tenderer expressly stipulates otherwise’. There are two lots to the tender so this could refer purely to reserving the option to award separate lots to separate bidders. However, it could also refer to services offered within lots, opening up the opportunity to cherry pick different aspects from each bidders’ offer and develop a service made up of the most effective or best value for money elements from each tender. Could it be that the Met Office declined to split their overall offering and missed a chance to keep some, if not all of their revenue from the BBC? We don’t know, but if so, it would be a hell of a gamble – not what you’d expect from an organisation whose raison d’être is predicting outcomes.
Another likely possibility is pure and simple complacency. Over almost a century of service provision, it’s not inconceivable that the Met Office had assumed they’d remain first choice regardless of the competition.
What can you learn from this?
Retendering for a contract you’ve already been providing for some time might seem like a done deal but in fact, it can often be the opposite.
Offer more: Tendering organisations have had time to get to know your company, your people and your services and, to them, each retender is an opportunity to demand even more from a provider. They will always, always want more: bigger, better, faster, cheaper, newer – every time they retender, they are looking for more value for money. What you’re doing now is no longer enough.
Innovate and add value: Use the experience you’ve gained over the current contract to propose solutions to any areas that could be improved. Whether it’s a shake-up of their internal processes or your own, add value and innovate wherever you can.
Don’t underestimate your competitors: All of your competitors are really motivated to take the contract off you, not just the bigger ones. Don’t underestimate that newer or smaller company you’ve always seen as the underdog. Their small size may allow them to be more responsive, flexible and sculpt their business to fit the contract. They will be offering the moon on a stick and if you can only offer more of the same, you’re at an immediate disadvantage.
Don’t be complacent: You can’t rely on your current processes either. While established systems and good relationships are crucial to the smooth running of any contract, don’t assume that the hard work you’ve put in to develop and optimise working methods and communication over the contract so far will tip the balance in your favour. If a competitor’s overall offer scores more highly than yours, your relationships aren’t going to count for much and your processes will just be picked up by the new provider.
Don’t reuse past bids wholesale: In the run up to retendering, it’s likely that the organisation’s procurement team will have – at the very least – skimmed through the bids you and your competitors submitted last time, along with the old ITT and any other documents, while they prepare the new ITT.
Nothing says ‘dated’ like reused content, especially content that’s been shoehorned into a response and doesn’t quite match the new questions. By all means, use content from past bids as a resource but make absolutely certain that all dates, figures, processes, policies, are up to date and that your response answers the exact questions from this ITT, not the similar-but-not-quite-the-same questions from five years ago.
Be prepared: If you have a contract due for retender over the next year, now is the time to start planning your approach. Make learning about the new contract a priority when meeting with the organisation you’re contracted to and discuss it as a regular agenda item during your internal management meetings. Use this time to identify where improvements can be made, find out what the organisation wants to add and start working on solutions so you’re ready when the ITT is finally issued.
And, of course, if you want any help, get in touch!