Prepare Tenders for Catering Contracts

PREPARE TENDERS FOR

CATERING CONTRACTS

D1.HCA.CL3.06

Slide 1

Prepare tenders for catering

contracts

This Unit comprises four Elements:

Identify tender requirements

Determine ability to meet tender requirements and

conditions

Estimate costs

Prepare submission for management

Slide 2

Assessment

Assessment for this unit may include:

Oral questions

Written questions

Work projects

Workplace observation of practical skills

Practical exercises

Formal report from employer/supervisor

Slide 3

Identify tender requirements

Performance Criteria for this Element are :

Clarify key objectives and or requirements of tender in

consultation with management

Analyse fixed and variable costing elements in

consultation with management

Identify and analyse tendering criteria and conditions

Slide 4

Clarify key objectives and

requirements

A Tender:

Is a formal offer to do work/provide products &services

for someone or a business

Becomes a legally-binding contract when the offer is

accepted

Slide 5


requirements

An RFT is:

Request for Tender’

A document from a person or business asking

you to tender for the provision of identified

products and services

Slide 6


requirements

The tendering process comprises several stages:

Identify tender opportunity

Obtain RFT documentation

Identify and clarify key objectives and requirements

Determine ability and capacity to meet

tender requirements

(Continued)

Slide 7


requirements

Assess feasibility or viability of tendering

Determine resources required

Calculate cost

Prepare submission documentation

Submit tender

Make presentation, if required

Slide 8


requirements

Why do organisations issue RFTs?

They believe it is the most effective way to choose a

provider

The process gives them the best price

They have found tendering out work provides

them with new ideas and concepts

The process readily identifies what different

caterers have to offer

They may be obliged to do so

Slide 9


requirements

Reasons you may respond to an RFT:

Increase market share

Grow the business

Increase revenue

Raise profit

Enhance business viability

Grow the reputation of the business in

the marketplace

Slide 10


requirements

Catering contracts may be offered for:

Schools and Hospitals

Prisons

Work sites

Hospitality venues

Sporting and entertainment venues

Transport

One-off jobs (sub-contracting)

Slide 11


requirements

Ways to identify a tendering opportunity exists:

Register with government agencies

Search the internet

Check printed media

(Continued)

Slide 12


requirements

Receive direct notification from client:

By telephone

Via email

In person

Using the services of a Tender Information Service

Slide 13


requirements

Obtaining RFT documentation may:

Occur when client contacts you

Require you to register and download them from the

internet

Require you to telephone a nominated person

Require you to collect a copy from an

address/business

Require you to attend an information session

Involve paying a fee

Slide 14


requirements

You must involve management in order to:

Benefit from their experience and expertise

Determine if the business is interested in tendering or not

Advise of the potential opportunity available to the

business

Authorise necessary work which

needs doing

Ensure the contract price will reflect the

position and needs of the business

Slide 15


requirements

When considering key objectives and requirements for an

RFT:

Realise every RFT is different

It is critical to understand the specifics of each RFT

Make sure you have all sections of

the RFT documentation

Slide 16


requirements

Techniques to identify and clarify RFT objectives and

requirements:

Form a ‘Tender Team’

Re-read and re-read the RFT documentation

Contact and question the client

Slide 17


requirements

Key objectives and requirements contained in an RFT:

Give the focus for, and an overview of the contract

Are listed under various headings in the RFT:

Objectives

Scope of work

Job/contract specifications

Provide an opportunity to identify

‘knock out’ questions or issues

Slide 18


requirements

‘Knock out’ questions or issues:

Are requirements under the RFT which you cannot

meet

They stop you being eligible for the contract

Must be identified very early – to avoid

wasting time and money

Slide 19


requirements

Tender team should comprise:

Management representative

Tender manager

Admin representative

Head chef

Other cooking staff

Beverage manager

Slide 20


requirements

Communicating with the client:

Telephone them

Get to know them

Get to know their organisation, their problems,

their situation and develop a ‘feel’ for them

Meet face-to-face with them

Slide 21


requirements

RFT documentation may comprise several individual

documents and or sections – for example:

Cover document

Conditions

Evaluation criteria

Application document to use for the

submission

Slide 22


requirements

Visiting the contract site:

Always try to visit the site where the catering contract is

to be implemented

May be a requirement/pre-requisite for applying

May require arrangements to be made with

the client contact person

May be undertaken ‘covertly’

Slide 23


requirements

Reasons to visit ‘the site’:

Speak to staff at the location

Inspect plant, equipment and facilities

Observe operations and evaluate food and

beverage being offered

Talk to those who consume products

provided

Slide 24

Analyse costing elements

Involve management and tender team at this stage to:

Provide advice based on experience

Perform costing calculations

Assist with research

Identify costs to be included

Approve, modify or reject proposed costs

Determine ability of the organisation to

obtain required resources

Slide 25


Fixed costs:

Costs which remain constant regardless of production

volumes:

Contract management

Insurance, venue hire and security

Permanent staff

Maintenance agreements

Membership of organisations and associations

Slide 26


Variable costs:

Costs associated with expenditure which varies with

levels/volume of production:

Food and beverage

Transportation

Power and other utilities

Some labour expenses

Laundry

Slide 27


When analysing fixed costs:

Ensure all costs have been identified

Calculate ‘actual’ cost for each item based on

quotations, current prices, negotiations with suppliers

and price comparisons

Determine how costs will be defrayed and

or incorporated into final submission

Slide 28


Options for analysing variable costs:

Identifying all variable costs for the tender

Quantifying volumes or amounts

Determining base cost prices for each item

Conducting CVP analysis

Considering ‘required’ selling prices

identified in RFT, if applicable

(Continued)

Slide 29


Developing cost pricing strategy

Undertaking CBA

Identifying deals from suppliers

Identifying alternatives

Considering budget implications

Predicting contribution margins

Determining individual costs as

percentage of expected revenue

Slide 30


‘Full cost recovery’:

May apply to some services you provide to the client

Generally does not apply to products

Means you only charge the client what it cost you to

provide the service

You do not show a profit on what you provide

Shows ‘goodwill’ if you elect to provide

services on this basis

Slide 31


‘Cost plus’ pricing:

May be an alternative to full cost recovery

You charge the client what it cost you plus:

A nominated percentage of that cost

or

A set fee per transaction

Slide 32

Identify and analyse tendering

criteria and conditions

Identifying and analysing tender criteria and conditions must be

done to be certain about:

Products and services required

Timing of service delivery

Location of the contract site

Service protocols for food and beverage

Limitations as well as mandatory requirements

Compulsory submission requirements for the

tender application

Date and time application must be submitted

Slide 33



Ways to identify RFT criteria and conditions:

Read the RFT documentation

Attend tender meetings provided by client

Seek clarification direct from nominated contact person

Slide 34


criteria and conditionsTender criteria = standards and specifications relating to products and services which must be met in your tender submission to qualify you for consideration as a legitimate tendered:

Food safety

Catering to be provided

Quantities required

Types of food to be provided

Specification of diet types

Quality-related criteria

(Continued)

Slide 35



Pricing

Cooking and preparation methods

Cooking styles

Service styles

Liquor service

Contract management team

(Continued)

Slide 36



Need to cater for specified customs, religions or cultural

requirements

Ancillary requirements:

Condiments

Crockery, cutlery, glassware

Napery

Slide 37



Tender conditions = requirements you must accept as part

of the process of making a tender submission for this

contract with this client at this time:

Using facilities and equipment which exist at the contract

site

Being prepared to provide additional equipment ‘at own

cost’

Providing nominated equipment

Demanding the use of certain items

(by type or brand) for certain processes

(Continued)

Slide 38



Agreeing to stated payment schedule

Agreeing to a range of other requirements identified in

the RFT documentation which may address:

Making a presentation to explain the submission

Changes to agreed requirements

Slide 39



Analysing tender criteria and conditions requires asking a series

of questions on topics such as:

Do you have the necessary experience required?

Can you provide the required products and services?

What staff do you have who can deliver the tender

requirements?

Does the tender enable the business to align with

its plans and achieve its strategic and other goals?

What money needs to be spent, what does it need

to be spent on and when does it need to be spent?

(Continued)

Slide 40



Is there a match between existing business systems and

technology at the contract site – in terms of:

HR?

Stock management?

Recording and reporting?

Internal communications?

Assessing financial performance?

Cash controls?

(Continued)

Slide 41



Do you need a joint-venture partner?

What are country-specific legal and compliance

requirements?

Are you prepared to disclose organisational information

which may be ‘sensitive’ and normally regarded as

‘commercial-in-confidence’?

(Continued)

Slide 42



Are you prepared to comply with stipulated conditions –

for example:

Insurance coverage?

Delivery schedules?

Business type, status and registration?

Nominated eligibility criteria?

Identified limitations and constraints?

Conflict of interest provisions?

Slide 43



Standard practices relating to information generated for

use in a tender submission include:

Create files to secure information

Share all the information with the tender team

Slide 44



Information to file and share includes:

Copies of all RFT documents – plus:

Amendments and updates

Responses from the client to questions asked

Personal comments/notes, questions and

identified issues:

From reading the RFT and inspecting the site

Talking to the client

Research undertaken

(Continued)

Slide 45



Feedback obtained from other relevant stakeholders:

Previous contractors

Government agencies

Copies of any other documentation

relevant to the submission:

Floor plans

Menus

Quotations

Slide 46

Summary – Element 1

When identifying tender elements:

Actively seek out tender opportunities and obtain RFT

documentation

Read, identify and analyse the requirements of the

RFT

Create a tender team to assist with tendering

Identify ‘knock out’ requirements as

soon as possible

Involve management in identifying tender

requirements

(Continued)

Slide 47


Make contact with the client to ask questions, clarify

issues and arrange a meeting

Try to visit and inspect the venue where the work is to

be carried out

Identify all fixed and variable costing elements

Request administration or management to

analyse identified costing elements

Ask lots of questions

(Continued)

Slide 48


Identify and analyse all tendering criteria and

conditions listed in the RFT

Continue involvement of management and the tender

team throughout the initial analysis and identification

processes

Identify the evaluation criteria which will be

used to judge the tender submission

File all tender-relevant information and

documents

Share all information openly with tender team

Slide 49

Determine ability to meet tender

requirements and conditions

Performance Criteria for this Element are:

Assess ability to provide catering services specified in

the tender

Assess viability of tendering for the provision of catering

services

Identify unique requirements of tender

Slide 50

Assess ability to provide catering

services

It is important to assess your ability to provide required

products and services to:

Assist with the decision about whether or not to

proceed with the application

Identify resources required

Help determine viability

Slide 51


services

Activities involved in assessing ability to provide required

products and services:

Involving tender team

Allocating sufficient time

Confirming RFT requirements

Researching

Asking lots of questions

Slide 52


services

Questions which could/should be posed as part of this

process:

What is required?

What products and services have to be provided?

When and where are they to be

provided?

What are the relevant performance

measures?

How many staff are required?

(Continued)

Slide 53


services

Can your business actually do what is required?

What genuine history or evidence do you have that

you can deliver what is required?

What is your ‘gut’ feeling about this question?

What ‘demonstrated experience’ can

you refer to in your application?

What is your potential?

(Continued)

Slide 54


services

Does the business want to undertake this contract?

Why?

Why not?

If you won the contract:

When could you start?

When does the RFT require you to start?

Does the work align with your current work?

Would you be required to move outside your ‘core

business’?

(Continued)

Slide 55


services What are the restrictions or challenges posed by the

contract?

Is the contract site accessible or too distant or remote?

Are there any readily identifiable and significant problems?

Why has the client issued the RFT?

Have they tried and failed? What does this mean?

Have they found it ‘too difficult’ or ‘too expensive’?

How can you do what they were unable to do?

Is the client committed to the project – or trying to distance themselves from it?

(Continued)Slide 56


services

What does the client know about your business?

Do they know you exist and what you do?

Have you contracted with them before?

What is their impression about your reputation

and of the work you do?

Have they given hints they prefer or want your

organisation to win the contract?

(Continued)

Slide 57


services

What do you know about the client?

What problems or challenges are they facing?

How can you be their ‘knight in shining armour’?

What is important to them?

Why?

What are the resource implications?

(Continued)

Slide 58


services

Identifying resources required involves:

Naming the resources

Quantifying each resource

Preparing ‘job descriptions’ for job positions

Discussions with financiers

(Continued)

Slide 59


services

Confirming resources available at the contract worksite

Determining acquisition options for required resources

Resolving identified resource acquisition

(supply) problems

Calculating cost for each resource

Determining on-going costs

Slide 60


services

Options for obtaining physical resources to support

implementation of a catering contract:

Using existing items

Purchasing – new or used?

Leasing

Renting

Joint purchasing

Slide 61


services

Options for obtaining human resources to support


Multi-skilling staff

Up-skilling workers

Recruiting new staff with specialist

skills and experience

Outsourcing certain services

Engaging more staff

Slide 62


services

Options for obtaining financial resources to support


Obtaining loans

Seeking private investment

Negotiating better terms of trade with

suppliers

Searching for subsidies

Slide 63

Assess viability of tendering

In relation to assessing viability of tendering:

There is always a need to do this for every tender

A range of factors need to be considered and these

vary with each tender

Money/profit is not always the primary consideration in

assessing viability

Slide 64


Assessing ‘viability’:

Seeks to answer the question ‘Is it worthwhile

submitting a tender for this catering contract?’

Slide 65


Topics to consider when assessing viability of tendering:

Costs involved in the tendering process – time and

expenses associated with:

Meetings and research

Development and testing

Fees

Complexity and type of RFT requirements

Travel

(Continued)

Slide 66


Time-related factors:

Do you need the business and cash flow ‘now’?

Are you already busy enough or too busy to take on extra

work?

Site location:

Close-by or remote and too distant?

Are there issues and problems with:

• Travel and transport?

• Lack of local knowledge?

• Culture and language?

• Legislation?

(Continued)

Slide 67


Profitability:

What are your profit criteria?

What future considerations do you need to take into

account when considering this tender?

Other tender applicants:

Who else is tendering?

What is known about them, their history,

experience and capability?

What are their strengths and weaknesses?

(Continued)

Slide 68


What are your USPs?

Is previous contractor re-applying? Why? Why not?

Is the tender part of a competitive tendering

process?

Outcomes of risk analysis – must reveal:

There are no significant risks associated

with implementing the contract

or

Identified risks can be effectively controlled

(Continued)

Slide 69


Risk analysis:

Is common for large contracts

May be a requirement of the RFT

Risk management involves:

• Risk identification

• Risk analysis

• Risk control

(Continued)

Slide 70


Other factors and issues – will winning the contract:

Improve your image and or build your profile?

Allow you to fully utilise spare or idle equipment?

Give you an alternate outlet for food and beverage

products?

Generate ‘economies of scale’?

Slide 71

Identify unique requirements

All RFTs are unique – to identify unique requirements use

same techniques as when determining objectives:

Consult with management and use tender team

Read, re-read and fully understand the RFT

Clarify RFT requirements where

necessary – talk to the client

Attend ore-tender briefings offered by client

Slide 72


You also always need to:

Use common sense

Apply industry knowledge

Use venue knowledge

Slide 73


The following are examples of possible ‘unique’

requirements:

Provide food 24/7

Use local or specific suppliers.

Cater for specific cultural needs

Meet certain dietary needs

Supply catering for ‘special events’

(Continued)

Slide 74


Obtain and operate a liquor licence

Serve a nominated choice of meals or courses

Provide take away service

Make certain packaged products available for retail sale

Supply a range of different foods, in

different locations at different price points

(Continued)

Slide 75


Shut-down at given times/dates

Meet specified COPs or QA criteria

Employ X% of local staff

Use nominated equipment, systems or technology

Allow client to taste and approve foods before they are offered

Adhere to specified food safety protocols

Observe mandatory reporting

Attend nominated meetings

Provide compulsory training

(Continued)

Slide 76


Respect right of client to inspect contract site

Comply with listed selling prices

Accept proposed payment schedule

Join industry or other associations/groups

Provide management team on-site

Undertake risk management

Provide nominated financial statements

Identify proposed supply chain for

products/ingredients

Establish emergency procedures for the work site

Slide 77


When determining ability to meet tender requirements and

conditions:

Assess your ability to provide the required catering

services

Identify the human, physical and resources required

Involve management and the tender team in all

considerations and activities

Pose lots of questions

Consider a range of resource acquisition

options for identified need

(Continued)

Slide 78


Determine the context of the contract for your

business, its focus and its operations

Calculate the financial and other costs involved in

making an application

Determine viability of the tender

Consider all relevant factors, not just profitability

Do an analysis of identified competitors

Undertake a risk analysis process, where

necessary

Be aware of all unique requirements for the tender

Slide 79

Estimate costs

Performance Criteria for this Element are:

Use enterprise rate and or costing schedules to

establish costing

Confirm availability of labour, equipment, materials and

other relevant items according to enterprise

requirements

Slide 80

Establish costing

It is important to establish costing because:

Costing needs to cover expenses

Price often determines who wins the contract

Clients expect to save money by tendering out

Similar submissions are differentiated on price

Slide 81

Establish costing

Rate and/or costing schedules:

Are lists of costs your business will charge

Help develop costs for the tender

Must be current and comprehensive

Must be approved by management prior to use

May be prescribed by the client as part of the RFT

May need to be included as part of your

tender submission

Need to indicate if (as applicable) they include

or exclude relevant taxes and or other charges

Slide 82

Establish costing

Rate and or costing schedules can relate to:

Labour rates

Standard equipment costs

Current commodity costs

Standard service costs

Standard unit costs

Standard material costs

Slide 83

Confirm availability

Attention must be paid to confirming availability of:

Human resources

Physical resources

Financial resources

Information

‘Scheduling’:

Enables most effective use of scarce resources

Helps confirm availability of resources

Identifies lack of or insufficient resources

Slide 84


Practices to schedule resources:

Identify start and finish dates for contract

Identify resources required for the contract

Determine times/dates resources are required for the contract

Identify resources required for other business operations

Determine times and dates when resources are required for

‘other operations’ of the business

Compare the two demands on resources

Identify times and dates where there are no (or insufficient)

resources available to implement requirements of the

contract

Slide 85


When determining resource requirements for the contract

considerations must include:

Trade levels

Mandatory requirements of the contract

Preventative maintenance

Known or predictable staff-related

requirements

Slide 86


‘Confirming availability’ means ensuring resources are:

Physically present in the workplace

Available to be used when needed

Able to be moved to the required location when needed

Able to be obtained from elsewhere when needed

Available in sufficient numbers/quantity

Confirmed through your supply chain

Compatible with contract requirements

Compliant with all applicable legislation

Slide 87


Possible alternative arrangements for obtaining or making

available additional physical resources:

Re-scheduling activities

Buying, leasing or renting more equipment

Sharing with others

Borrowing items

Purchasing better equipment to increase productivity

Using new technology

Ensuring proper maintenance of items

Placing dedicated items at each work site

Slide 88


Possible alternative arrangements for obtaining or making

available additional human resources:

Employ more staff

Allocate extra hours to existing staff

Provide training

Out-source certain tasks

Slide 89


When estimating costs:

Appreciate the importance of costing in the overall

tendering process

Develop rate and or costing schedules for identified

resources in accordance with RFT requirements

Ensure and verify resources required for

the contract

Identify resources already available and their

predicted usage

(Continued)

Slide 90


Schedule usage of all resources for the project and

normal business activities

Compare and contrast available resources with

identified demand

Secure additional physical resources as required

on the basis of analysis

Hire more staff and or provide extra hours

Train staff

Slide 91

Prepare submission for

management

Performance criteria for this element are:

Outline required resources and capacity within

submission

Outline cost estimate within submission

Outline operational details within submission

Outline proposed products and outcomes

required to meet tender requirements

Slide 92

Outline required resources and

capacity

Submission options for tenders:

Written submission – hard-copy and electronic format

Verbal presentation

Written submission and verbal presentation

Slide 93


capacity

Submission requirements may include:

Number of hard copies required

Maximum number of pages

Need to use Application documents

provided in the RFT documentation

Need for electronic version

Method of lodgement

Address for lodgement

Lodgement date and time

Slide 94


capacity

When writing your submission:

Make sure you know the submission requirements

Know the evaluation criteria

Adhere to submission constraints

Write clearly and succinctly

Refer to previous tender submissions

your organisation has prepared

Use the tender team to assist

(Continued)

Slide 95


capacity

Prepare a draft and revise as required

Realise the importance of presentation

Include ‘Letters of Support’ (if allowed by the RFT)

Nominate a contact person the client can

use for follow-up

Prepare a cover page

Present the submission in accordance with

sample or required ‘divisions’ or ‘sections’

(Continued)

Slide 96


capacity

Confirm all requirements listed on RFT ‘Submission

Checklist’ have been met

Explain terms and acronyms used

Include ‘Appendices’ – if allowed by RFT requirements

Include payment of deposit – where necessary.

Check and proof-read the final version

Submit final version to management

Keep a copy

Slide 97


capacity

Need to outline required resources:

There is always a need to do this

The extent of resource identification can vary

significantly between different tenders

Check with client if unsure about what

is required – never ‘guess’ and never

‘assume’ you know

Slide 98


capacity

While the resources which need to be identified for each

catering contract can differ with each RFT the following are

commonly required:

Labour

Raw food materials/ingredients

Packaged and pre-prepared or

ready-to-eat items

Funding arrangements

Support services and other requirements

Slide 99

Outline cost estimate

When outlining cost estimations you need to:

Be certain about RFT requirements in this regard

Realise ‘cost’ forms the basis for the ‘price’ you will ask

Continue using your tender team to help research,

determine and calculate costs

Double-check your figures and calculations

Highlight cost benefits for the client

(Continue)

Slide 100


Explain all costs you believe may be seen as either

excessive or irrelevant

Present costs in the required currency

units/denominations

Show how ‘totals’ were calculated – avoid just showing

a ‘final’ figure

Indicate where variable costing may

apply

(Continued)

Slide 101


Provide an overview of all costs – where allowed by

RFT

Add ‘standard’ statements relating to costs listed in the

submission – about:

Correct at time of submission

Valid till date

Subject to inflation

Inclusive of taxes

Indicate charge out rates for certain costs

Slide 102

Outline operational details

It is important to outline operational details in order to:

Prove your capacity and competency

Convince client of your ability

Validate costs which you have listed

Prove your planning addresses identified need

Give client faith in you and your

organisation

Slide 103


Operational details required by client:

Varies between RFTs

Ask you to show how you will manage/implement the

requirements of the contract

Slide 104


Operational details should address:

Staffing

Styles of service

Transport

Stock control

Equipment and resources

Security

(Continued)

Slide 105


Emergency management

Facilities management

Environmental issues

Waste disposal

Management

Other topics specifically required

by the RFT

Slide 106

Outline proposed products and

outcomes

The submission must identify the products and services to

be provided – which also provides an opportunity to:

Differentiate your submission from others

Demonstrate value-for-money of your application

Influence the client using ‘Wow factors’

Emphasise how your submission

meets RFT requirements

Highlight your USPs

(Continued)

Slide 107


outcomes

Provide options not ‘required’ by the RFT

List other products and services you are able to provide

in addition to those included in the tender submission

Demonstrate innovation

Name your ‘experts’

Describe your association with relevant

bodies, agencies and or organisations

Show the ways in which you have been

a ‘good corporate citizen’

Slide 108


outcomes

Ways to describe products and services to be provided:

Provide sample recipes and menus

Include visual images

Explain how you will accept payment

from ‘customers’

Offer ‘taste tests’ of products

(Continued)

Slide 109


outcomes

Attach product specifications to be provided to your

suppliers

Give examples of service protocols

Include testimonials

Provide sample set-ups and plans for events and

functions

Provide images of previous events and

functions you have catered for

Slide 110


When preparing submission for management:

Ensure you fully understand all the tender application

requirements which must be covered in your submission

before you start

Determine the exact requirements for submitting the

application

Use designated submission documentation

provided in the RFT, if applicable

Clarify any unclear requirements with the client

Realise failing to meet submission requirements for the

tender can render your tender ineligible for consideration

(Continued)

Slide 111


User the tender team to assist

Accept people will infer competency from the nature, type

and quality of your submission

Outline all the required resources as part of the application

Detail cost estimates for nominated elements

Describe management and operational plans for the

contract

Outline all products and services to be provided

Strive to distinguish your submission from others

Never be shy about ‘selling the benefits’ of your submission

Slide 112

Education

Prepare Tenders for Catering Contracts