In the United Arab Emirates, bids and tenders refer to the process by which companies or organizations submit proposals for a specific project or contract. This process is typically used for large-scale construction projects, government contracts, and other major procurement initiatives.
Bids or tenders are a common method used in the procurement process, where a company or organisation invites suppliers to submit proposals for a specific product or service. The process usually begins with a request for proposal (RFP), where the company or organization outlines their requirements and invites suppliers to submit a bid or tender.
To participate in the bidding process, interested companies must submit a formal proposal, also known as a “bid” or “tender,” that outlines their qualifications, capabilities, and proposed approach to completing the project. These proposals are typically reviewed and evaluated by a selection committee or procurement team, who will consider factors such as cost, experience, and overall fit with the project requirements.
The company whose bid is selected is then awarded the contract and becomes responsible for completing the work outlined in the proposal. Bids and tenders are an important part of the procurement process in the UAE and help to ensure that projects are completed efficiently and effectively by qualified contractors.
The Importance of Bids And Tenders
- They create a fair and competitive process for procuring goods and services. By inviting multiple suppliers to submit proposals, it ensures that the company or organization can select the best proposal that meets their needs, at the best value for money.
- Additionally, bids and tenders provide a level of transparency and accountability, as suppliers are required to disclose information about their products, services, and pricing. This allows the company or organization to make an informed decision, and also allows suppliers to compete on a level playing field.
- Bids and tenders also help to establish fair competition among suppliers, which is vital for preventing monopolies, price fixing, and other anti-competitive practices.
Creating a Successful Bid or Tender in the United Arab Emirates
- Understand the requirements of the project or procurement opportunity: Carefully review the project or procurement documentation, including the scope of work, evaluation criteria, and any other relevant information. Make sure you fully understand the requirements and that your business is capable of delivering on them.
- Conduct a thorough market analysis: Research your competition and the broader market in which you operate to identify any potential challenges or opportunities. Understand the pricing structure, and costs of materials, labour and all other needs.
- Develop a proposal that clearly and concisely demonstrates how your organization can meet the requirements of the project or procurement opportunity, including a detailed project plan, a breakdown of costs, and any relevant experience or qualifications your firm has.
- Demonstrate compliance with local regulations and standards. Make sure your proposal complies with all relevant local regulations and standards in the UAE, such as labour, tax and environmental regulations. Find out more about navigating the UAE market.
- Building strong relationships with key stakeholders in the procurement process, including government officials, can help increase your chances of success.
- Carefully review and submit your bid or tender in accordance with the instructions provided by the procurement entity before the deadline.
Why it’s Important to Have the Right Licence/Activity Before Submitting a Bid
Currently, many business owners and investors view the UAE as the perfect geography to expand their business. There are many benefits to doing business in the UAE including taxation and access to the GCC and MENA region. However, many prefer an approach of ‘dipping their toe’ into the market by having direct sales agreements or using a distributor to sell their products. Apart from reducing profit margins I have also experienced many shortcomings with this approach and had much better results with the appropriate trade licence in place.
In my prior role as Sales Director, I had established agreements with various government and large private entities in Dubai, including Dubai Airports, Emirates Group, UPS, Kuehne + Nagel, Maersk, Amazon, Deliveroo and Talabat, among others. However, when I attempted to extend these agreements to our Abu Dhabi counterparts, the lack of a licence in Abu Dhabi led to delays in bid submissions and reduced the likelihood of successful tenders. However, when I had contacted their Abu Dhabi contempories, the issue of not being licenced in Abu Dhabi meant we had to delay our submission, which jeopardised our chances of a successful tender.
In another instance, one of our clients, with a live tender worth AED 5 million, raised concerns about our license activities during the process of finalizing a contractual agreement. Although our company were licence correctly specifically for the supply of our products the external body had requested, we included a new activity which reflected a growing number of employees conducting specific activities. Without a corporate services provider in place, this delayed the finalizing of the agreement as we had to approach the authorities directly with little knowledge of licensing and relationships with the licencing authorities.
How CBD Can Assist Your Business with Creating a Successful Bid or Tender
The majority of bids and tenders will involve a review of trade licences and corporate structure along with the in-country-value of the party bidding. Without a presence in the UAE and the specific emirate company’s risk the opportunity of losing out to competitors who are committed to the region.
As a consultant at CBD Corporate Services, I can assist clients with their preparation of bids and tenders and ensure they are in the best position to win and expand their business. If you would like to discuss your market entry to the UAE, PRO services in the UAE, UAE visas or your trade licence for an upcoming bid and tender, please contact: email@example.com
Authored by Brad Williams, Consultant at CBD Corporate Services