Selling to a Public Sector Organisation
Somewhere in 2014, one of my major clients in the Oil & Gas sector was developing one of their Gas fields and hence doing a major procurement activity, one such tender that they issued for the purpose was for Stainless Steel & Carbon Steel Line pipes.
We had a good relationship with an Italian trader who specialized in the same field. However, they used to quote European Origin goods and I knew European Origin would not be able to compete in terms of pricing, so I had my team source the material from China. Problem with the Chinese is that they don’t easily agree to the conventional payment terms i.e. a letter of credit and therefore we had to request our Italian friend to make an offer where he would buy the equipment from China and then resell. They agreed and the offer was submitted.
A couple of months later financial bids were opened, and we came 2nd in terms of pricing, “one of the many tenders lost to pricing” I said to myself and moved on, that a few weeks later I get a call from the procurement officer of my client that they wanted to meet me to discuss this bid. “What could it be” I wondered? “Has the lowest bidder backed out?” I had a hundred thoughts going through my mind. The project was so big that this project would have been good enough for me for the entire year and another. Anyway, the next day I was there in the gentleman’s office that I was told that I was the lowest bidder? How could it be? I had attended the financial bid opening meeting and we were the declared 2nd lowest bidder. Turned out, that the lowest bidder had quoted a longer delivery period and the tender had a price-cum-delivery formula in place wherein the prices were calculated by multiplying the delivery factor into them which resulted in us being the lowest bidder. I was ecstatic, I could not believe myself, called my dad and gave him the news.
The next week, I was called back again, this time by the end-user, he wanted me to reduce the delivery period even further. The project was of national importance. I refused; our delivery period was already the best amongst all the bids that were submitted. I came back thinking that they have no other option, and I would get the Purchase order eventually.
A week went by and there was nothing in my inbox. I started to get anxious, picked up the phone and called a contact with the client to find out what was going on, was told that they are trying to find other suppliers to meet their delivery schedule. There was no way I was letting this Purchase order get off my hands. I immediately called the General Manager of the End-User department to get a conversation going to find out exactly what was going on and the information provided by my contact was correct and they were indeed finding out ways and means to get the goods early. He gave me a day’s time to see what I could offer, we were still their preferred bidder as we had gone through the entire procurement process, but our quoted delivery period was not meeting their project schedule. I immediately called the manufacturer and discussed a reduction in delivery period, was told that he could make partial deliveries and the first lot could be shipped within a week, got the Italian partner onboard and called the end-user the very next day and offered him the solution. He was ecstatic, just as I was when I had heard about us being the lowest bidder, he told me that I would have the letter of intent within the day. And “BAM” there it was, as promised by the gentleman. We managed to successfully complete the delivery and met the delivery schedules.
It was just my instinct and a phone call that made the difference, I could have waited another week and they order would have gone to someone else.
