It is common for large companies to issue invitations to tender when procuring a travel management service, especially when they have established procurement processes in place. But for many SMEs, which don’t have the luxury of a procurement department to help them, issuing a tender for travel management services can seem a bit daunting!
The truth is it doesn’t have to be, and while you don’t have to do it, issuing a tender can be a good way to bring structure to your procurement process. Of course, if you’d prefer you can just meet informally with your suppliers but even an informal tender process can make the process run more smoothly, and it’ll keep you focused on your objectives.
#1 Don’t rely on an out of date template
There are lots of templates and sample tenders available in the business travel industry that companies recycle as a basis for their Invitation to Tender (ITT). And, while this may seem like a good time-saving exercise (and they can be useful) don’t let them stop you from inserting your own objectives, requirements and specific questions into your ITT. Remember some of them have been doing the rounds for years and aren’t up to date with today’s marketplace.
#2 Keep it simple
Tenders or Requests for Proposals (RFP) don’t have to be lengthy documents. Just including the following will be ample information for TMCs to put forward a bid for your business, and for many, a tender that gets straight to the point and doesn’t take weeks to respond to will be a welcome change from the norm.
- A short introduction about your company
- Business travel profile (the data you’ve collected on your travel spend)
- ‘Essential requirements’ a TMC MUST deliver
- ‘Nice to have requirements’, the things you’d but could live without
- Any questions you want your TMC to answer (anything from company culture to their ideas on how you can improve your approach to business travel)
- Request for quote/charging structure such as transaction fees
- Exact instructions on how the TMC should respond
- How you will evaluate TMCs responses
- Response deadline and timelines for the process
#3 Only ask questions that are relevant to your requirements
If you are going to ask the TMCs to answer specific questions rather than sending their own proposal, think about what you’re going to base your decision on. It’s pointless asking a question when the answer will have no influence on your decision, so only ask the questions that are important to you.
#4 Be open to innovation
Don’t be too prescriptive with your requirements. The business travel market is a rapidly changing one, technology is changing all the time and with that come innovations. Give your potential TMCs the opportunity to make recommendations on how they think you should approach business travel. This is a great way of identifying the TMCs that will be proactive and innovative to work with.
#5 Don’t invite too many TMCs to bid
We recommend you ask no more than six companies to submit a tender and short-list three to go through to the next stage, which is typically an in person presentation. If you’re struggling to narrow it down to six suppliers, consider getting references before the tender process to help you choose the final six. While this typically goes against the guidance of getting references at the last stage in the process, moving it to the beginning means you’ll only be considering reliable suppliers, rather than being let down at the final hurdle.
# 6 Give TMCs ample time to create a quality response
Speak to any Travel Management Company, and they’ll tell you they are hardly ever given enough time to respond to tenders. Any good TMC will often be responding to several travel management tenders at the same time, so asking them to send their response in a week’s time, will mean they won’t have a chance to bid at all, or they won’t have sufficient time to put a quality response together. We recommend allowing a minimum of 3 weeks to respond, but be flexible on the deadline if any mitigating circumstances will prevent anyone for bidding.