Debriefing the Losing Bidder: An Investment in Future Success

by Sara Cullen, Senior Consultant, Cutter Consortium

This Advisor looks at debriefing the unsuccessful bidders after a competitive bidding process has closed. This is often treated as an optional process -- and is usually one to be avoided. However, if done well, with the right intent, it is a valuable exercise for all, and can also create support for your future bidding opportunities.

The most common debrief comprises a short meeting with the unsuccessful bidder in which you explain why they were not successful in this instance. If handled well by both parties, such debriefs are quite valuable to the bidder, since they can learn how to bid more successfully in the future to your organization. It also offers you the opportunity to leave the provider with some measure of goodwill. This is important because you may want or need them to bid again sometime in the future. It can also form the basis for a discussion that explores how you could continue with some form of relationship if that is desirable to both you and the provider.

Many organizations do not offer briefings because of the possibility of disputes arising from the discussion that takes place. The risk is that you may accidentally give the unsuccessful bidder some information that might support a potential claim that the evaluation process was not conducted in the manner described in your tender documents (e.g., your RFP or invitation to bid). This may give the unsuccessful bidder grounds to dispute the results of your evaluation and, in some cases, delay the awarding of the contract until the dispute is resolved. Those plaintiffs that have been successful with their dispute have been awarded the cost of tendering by the courts, which can be in the millions of dollars.

So the danger is there, but if you handle the debrief well (and assuming the bidding process was also handled well), then this risk can be easily mitigated, and your market relationships -- and thus your opportunities to receive future competitive bids -- can be kept in action.

Offering the Debrief

All bidders spend what are often considerable amounts in both money and opportunity costs, so losing a bid can generate a certain amount of negativity toward your organization. If you do not take the time to let the losing bidder(s) know how to "bid better" for you next time, they may assume that you already have your "favorites," that you are too difficult to deal with, or that you just do not understand their value proposition -- in every instance decreasing the probability that they will invest again in a losing proposition.

Many organizations do not explicitly offer a debrief due to the effort and risk involved but will usually conduct one if requested by a provider. If you want to keep potential bidders interested in your future requirements, consider being more active and offer one. If a bidder does not take up the offer, call them and make the offer again. This shows that you are interested in their organization for the future, even though a competitor won in the current instance.

Running the Debrief

If you do conduct a debrief, you should have at least two representatives from your organization present at the meeting to corroborate the details of the discussion that took place. More important, if a debrief becomes dysfunctional, and one person gets caught up in an argument, starts to justify the winner, or defends the evaluation, the other person can either return the debriefing to a professional level or end it at that point.

Apart from the risk of dispute over the evaluation results, a debrief can be emotional and upsetting for both parties, regardless of whether or not it is handled well. The key to making it as painless as possible is to not permit the unsuccessful bidders to debate your results, not to allow the provider to give any explanations of their bid, and not to allow any debate of how your evaluation team interpreted any bid (whether successful or not). Merely provide a scripted, rehearsed, and high-level explanation of the perceived strengths and weaknesses of the specific provider's bid. Do not refer to any other bid. However, always phrase and deliver the information in a way that encourages them to bid again, should the opportunity arise.

The best way to do this is to write a letter to the unsuccessful bidder and have that reviewed by the evaluation team and perhaps a probity/legal advisor. You then use this letter as your script, and by all means, send it to them to confirm your discussion.

It is not uncommon to record the debrief as well, especially if you have concerns that the conversation may be interpreted differently than intended or called into question. But this is only where you believe a dispute could occur.

Debriefing Unsuccessful Bidders in a Retender

Unfortunately for bidders in retender situations, statistically, the incumbent providers tend to win the bulk of the work put to retender most of the time. This is because of the inherent costs of switching providers, which includes the cost of disengaging the incumbent, transitioning in the winner, and the handovers of work, assets, and documentation between the two providers.

It can be very difficult to justify to others why an incumbent won, as most unsuccessful bidders will construe the retender exercise as really just a form of negotiation with the incumbent to get a better deal -- at the unsuccessful bidders' expense. Your intent to switch if a better deal came along may have been genuine, but in most cases, the client organization would have done little to minimize the switching costs that need to be borne by all three parties and thus stacked the probability of win to the incumbent provider.

In these cases, the degree of negativity can be quite strong, and this can seriously affect your ability to get good bids should you ever want to retender the contract again. Accordingly, this debrief will be a very delicate exercise indeed.

If you have any known future opportunities for them, it would be imperative to frame the discussion toward a "we want you to bid, and here's how to do it better for us" type of dialogue. This moves the discussion away from their failed bid (which may have been a particularly ugly exercise) and into one of future opportunities.

If there is no known scope for them in the future, the only way to leave them with a measure of goodwill is to show appreciation for their efforts, discuss the positives in their bid (while being cognizant that it was not enough to win in this instance), and wish them every success in the future. Even this small gesture will do more than doing nothing at all.

Is offering feedback to bidders on your organization's contract a part of your process? What is your feedback experience? E-mail me your comments at scullen@cutter.com.

-- Sara Cullen, Senior Consultant, Cutter Consortium