Everything You Need to Know about Risk Assessments in Bids

For many businesses, the process of tendering is something they do out of necessity to win contracts and deliver goods or services for public sector organisations. It is a very valuable industry, and because of this the process of winning a tender and bidding for one is rigorous and this can be off-putting to many businesses. The process is not risk-free for both the supplier and the buyer, so often a part of the bidding process includes a risk assessment that the company offering a tender can use to inform their decision on who to award a contract to. 

Risk assessments can be a lot of work but they are key for both parties because they allow the bidder to really calculate how safe or worthwhile a bid is for them. On the side of the business awarding the tender, a risk assessment lets them decide realistically what business is going to be the best to partner with and offer them a safer relationship. 

For a company bidding for a tender, there will be a collection of questions asked of you which will help you create a concrete risk assessment. The questions you will be asked can also offer insight into past deals a business has had with other contracting partners. They may have a risk assessment question that heavily centres around workplace safety regulations, suggesting they have had issues in this area in the past with previous partners they have worked with. 

Typical risk assessment questions you will be asked about on a bid can vary from business to business, and from industry to industry. Some will reflect a key aspect of business operations itself, maybe dealing with financial risk. Others will centre around supply chains and logistics, others still may take a more direct health and safety approach. 

The most common risk assessment questions to appear in bids are:

  • COVID-19: The pandemic has not meant that businesses grind to a halt and tenders are still being made known to the market every day. Because of this many businesses have included questions in bids which specifically deal with how you will work around restrictions and manage a scenario where several key players in your team need to isolate. These questions are likely to become less and less frequent as time goes on but it is still mindful, particularly if working with an overseas business in a location where the severity of the pandemic is more pronounced, to be ready to answer this question.
  • Supply Chain and Management: At the heart of many different tenders is a reliance upon a supply chain of some kind. To fulfil the requirements of a tender you may need to ensure a steady supply chain to you, and a steady supply chain to the business you are working with. A business will want to see your ability to ensure a steady stream of product and know that if something goes wrong you have a solid contingency plan if there’s an issue. 
  • Business Continuity: This is to satisfy a business that appropriate strategies are in place to ensure plans are in place for any long term issues in fulfilling a tender. 
  • Financial Risk: Businesses will want to ensure that you are financially capable to meet the requirements of the tender and that you are not entirely reliant upon it alone. This is to ensure you are a capable business and that you are fiscally responsible.
  • Contingency: This is mostly linked to business continuity and supply chain management, but also links into managing scenarios such as staff absences, peaks in demand, increased workloads, and other issues that can impact the continuity of meeting the requirements of a tender. This is all about ensuring the business you’re bidding with that you are able to be dynamic and ensure business will not stop if certain situations arise.

Risk is always involved in anything business-related, we don’t have a crystal ball to be able to plan for the future so planning for different eventualities is important. By having a concrete risk assessment prepared for a bid you will stand out as a viable option for a business and will ensure a business that you are the right option for them to partner with.

Many businesses will ask you to attach an appendix alongside a bid outlining a more detailed risk assessment. This is essential and you need to make sure that you do not forget to treat this with as much importance as the rest of the bid. Some top tips to ensure you understand how to appropriately approach risk-based questions are firstly to read the ITT documents in detail. You will understand the minimum standards and financial thresholds that you must meet in order to be considered a viable option. Review contractual obligations to ensure you meet all requirements. Attend any pre-tendering and buyer engagement events where possible to understand what a buyer wants in simple terms and how they expect a service to be delivered. Finally raise clarifications about things you aren’t sure about, this won’t count against you but will instead show a business you are careful and considered in your approach.

Risk assessments are a major part of the bidding process and it is something that many people are not focusing enough time on. Making sure that you take the process of answering risk-related questions seriously and having a concrete risk assessment will set you head and shoulders above the competition. 

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