Tenders for construction and renovation: How to participate in government procurement for construction? 2020

Almost every entrepreneur, organization, firm or any other legal entity has encountered the concept of “tender” at least once in their activities. Some even thought about taking part in it. A tender is one of the ways to competitively select a contractor for a specific order. The decision on choosing a contractor is made by the customer. In order to successfully participate in a tender and receive an order for work, knowledge of the basics of trade, as well as instructions and rules of the competition is required. In addition, electronic trading has a large number of pitfalls that can reduce all efforts to zero. How to successfully participate in tenders and receive orders from large companies? We will figure it out in this article.

Where to start working with government procurement

The first question that every newcomer has is where to start participating in tenders, government procurement and electronic trading. We recommend starting by checking your niche. This must be done before studying the step-by-step instructions for participation. Competition in government procurement is quite high, and it is assumed that the purchase price will be minimal. A particular company’s business process may be structured in such a way that participation will be unprofitable. To assess your prospects, follow the step-by-step instructions:

Go to the EIS website.
Go to advanced search.
Find completed purchases of the product, work or service you want to sell under 44-FZ.
Study several purchases: what was the starting price (NMCC), at what price the government contract was concluded, what are the requirements for the product and the terms of execution. To do this, you need to download the documentation, first of all, the technical specifications. To do this, go to procurement, and from there to the “Documents” section.

To go to the advanced search for the UIS, click on the “Advanced search” link.

This is what the search terms for niche analysis look like. You can complicate the search by indicating the procurement period, the region of the customer, OKVED of the product, work or service.

And here you can download government procurement documents:

In the “Supplier Determination Results” section, you can find out the cost of the contract and the winner.

If everything suits you and you are ready to fulfill the contract on these terms, then you can look for open government procurement and prepare an application, and step-by-step instructions for participating in government procurement and tenders will help you.

Additional materials on public procurement training

The field of government procurement is changing dynamically, new decisions are regularly made, lists of trading platforms are approved, so books are not the best way to gain knowledge.

Recommended materials include:

YouTube channel of business coach and expert in the field of public procurement Valery Ovechkin - here you can find a lot of useful free information. The author also provides a unique paid service - a turnkey government procurement business.
Website of procurement consultant Natalya Urazova - there is a blog with tips on how to become supplier of the year in several categories, thoughts on the future of procurement. The author has been working in this field for two decades, during which time she has become one of the most recognized experts in our country.
Government procurement in clear language is an online encyclopedia that contains absolutely all the theoretical information that will help you learn how to win a tender in government procurement.

Construction tenders: differences

In essence, construction tenders are tenders for construction-related work, but they should not be confused with tenders for repairs.
A distinctive feature of construction tenders is that the organization has SRO approval. The organization must have experience in construction (commissioned buildings worth at least 25% of the initial maximum amount of the construction tender). In the notice when submitting an application for the electronic auction, you will be asked to fill out Form 2. Along with Form 2, you will need to prepare a proposal containing everything that is needed to carry out contract work. The proposal consists of two parts: technical and commercial.

In the technical part of the notice, they describe the construction project and provide a general plan, information about the installed utility networks, and architectural and construction characteristics of the facility.

In the commercial part of the application, pricing is described, for example, in the form of an estimate calculated according to GOST, the deadlines for completion and the conditions for carrying out the construction tender work are indicated. The application is reviewed by a tender committee consisting of construction industry specialists.

If, as part of the work, it is also necessary to prepare a project (perform design work), then electronic tenders are often held in the form of an open competition. In this case, the evaluation of the tender proposal takes into account work experience, business (construction) reputation, and the availability of existing completed construction projects.

Based on this, two conclusions can be drawn. The first conclusion: not every company can participate in construction tenders. The second conclusion is that not every tender specialist can prepare an application for a company, so you should turn to professionals for high-quality preparation of a tender application.

Given such a volume of tenders, there are countless Internet portals for construction tenders.

For the most part, portals duplicate each other, so the easiest way to search for government tenders is through the official government procurement website.

If you also want to participate in commercial ones, then you should use a program to search for tenders or order a tender monitoring service.

Documents for participation

To participate in the tender, a number of documents must be prepared. However, those organizations or individual entrepreneurs that are planning their participation in such an event for the first time do not always have an idea of what type of paperwork needs to be collected. However, there is nothing to worry about, since all requirements for the submitted documents are indicated in the tender (competition) documentation.

Tender documentation is developed by the organizer or tender committee. Its content is influenced by the nature of the event.

Ways to notify about an event:

if the tender is open to everyone who wants to take part in it, all documents from the customer (along with the notice) are placed in the Unified Information System (UIS).
in the event that a closed form of the event is organized, the competition documentation is sent by the customer directly to potential participants.

The tender documentation contains the following information:

requirements for the procurement object;
requirements for competitors;
requirements for applications and their support;
application evaluation criteria;
terms and procedure for the tender;
draft contract.

The tender documentation must indicate the address at which applications from potential suppliers are accepted.
To participate in the tender, you must submit the following documents:

application for participation in the tender (drawn up in a free form or developed by the organizer);
information about yourself (participation in previous projects, financial and technological capabilities);
proposal for participation in the tender;
a notarized copy of the taxpayer identification number (TIN);
certificate of registration of an individual entrepreneur or legal entity;
a certificate of no claims from the Federal Tax Service;
information about the financial condition of the enterprise for the last reporting period (quarter, half-year, year);
list of documents in the package.

Certificate of registration of an individual with the tax authority is one of the documents presented as part of the tender documentation

Tips for Beginners

There is a common belief that participation in tenders is quite labor-intensive and that only companies close to the customer can win the procurement, and all procurement activities are based on various corruption schemes. Nevertheless, thousands of small businesses regularly win tenders openly and honestly and become suppliers to the state and state-owned companies.

Any person who offers the most favorable terms for the execution of the contract can win in public procurement.

But in practice, not everything is so simple. The following tips can be highlighted for beginners in public procurement:

Before participating in formal government tenders, it is worth practicing at commercial auctions , which have less stringent rules.
It is necessary to soberly assess the company's capabilities . You should first carefully study the tender documentation, including the terms and conditions of the government contract. Failure to comply with any clause threatens to be included in the register of unscrupulous suppliers and disqualification from the public procurement market.
It is necessary to assess the capabilities of the personnel and the production capacity of the company . The terms of reference may contain requirements that the participant will not be able to fulfill. It is better to avoid such tasks.
It is worth carefully calculating the costs that may arise during the execution of the contract , and calculating whether it will lead to losses for the company. Some participants underestimate possible costs: in particular, logistics costs, expenses for taxes and fees, etc.
In the process of calculating financial risks, it is worth considering that government contracts rarely require an advance payment from the customer and the participant needs to have his own funds that would allow him to fulfill the contract. He will receive payment only based on the results of the work, when the customer accepts them. In addition, the participant will have to provide security for the application and contract.
You must first make sure that the goods, works and services supplied by the participant are in demand in the region where they are sold . To do this, you need to look for suitable purchases and analyze the conditions for them, find competitors and evaluate their working conditions, etc.
When searching for tenders, you need to correctly formulate your search query to find a purchase, taking into account the region and industry.
It is worth referring to the schedules of government customers : based on them, you can obtain information about what month the purchases are planned for.
It is advisable to allocate a separate specialist or division in the company who will deal with procurement . Often, managers entrust the preparation of applications to non-professionals (for example, accountants), who, not having the proper level of competence, often make mistakes. If necessary, procurement can be outsourced (there are separate companies that provide tender support services).
If the procurement documentation is drawn up incorrectly or contains erroneous information, then do not be afraid to request additional information on the procurement by sending requests to the customer . If you ignore them, you can complain about the customer to the regulatory authority.

How does the electronic auction work?

Before the auction, the customer reviews the first part of the application, and after the auction - the second.

The first parts of applications are checked for compliance with all established requirements within the following deadlines:

up to 7 calendar days from the deadline for accepting applications, in auctions with an initial maximum contract price (IMC) of more than 3 million rubles;
no longer than 1 working day from the closing date for applications, in auctions with NMC less than 3 million rubles.

Admission may be denied if the participant:

did not provide the required information or provided false information;
incorrectly indicated the parameters of the product or did not formalize consent.

After the first part is accepted, the supplier enters the trading platform at the appointed time and submits price proposals.

During the bidding, participants reduce the contract price by steps from 0.5 to 5%. If no one offers a lower price within 10 minutes, the lowest bidder wins. After the auction, the customer checks the second parts of the bids and announces the winner with whom he enters into a contract.

How to participate in tenders correctly?

So, the preparatory steps are completed. Now you can proceed directly to participating in auctions. The whole procedure consists of several successive steps. Let's consider them separately.

Search and selection of tender

The first and very important step is searching and selecting a tender.
Many entrepreneurs and organizations, especially if they have just started their professional activities, cling to every trade. This often leads to loss of time and nerves, and disappointment in this area. Consider the following criteria when performing this step :

The tender must be cost-effective.
To win, do not choose highly competitive options.
The tender should not be written “for someone”; it should be universal.

If these criteria are met, you can choose the most suitable option for yourself.

Preparation and submission of application

The application is the basis of success in auctions. The customer’s decision depends on the correctness of its preparation.

When submitting an application, you must attach a package of documents, which consists of:

Proposals from an entrepreneur or organization that describe the goods or services provided.
Approximate price for the work.
The statutory documents of the enterprise (the list of statutory documents is here).
Licenses and permits.
Documents that confirm the high qualifications and extensive experience of the company’s employees.

Before submitting your application, be sure to double-check all the information contained in it. You should not agree to bad terms of cooperation:

Respect yourself and your work,
Objectively evaluate the quality of the goods and services you provide.

The application may be returned to its sender in the following cases:

Receipt of several applications from one legal entity.
Late submission of documents.
Lack of electronic signature on papers.
Completion of the accreditation period of a legal entity.
Lack of possibilities to secure the application.

Auction procedure

The tender procedure itself involves competition between potential performers. Everyone submits their own price proposal. The lower the cost of goods or services, the higher the chance of receiving an order.

But, as mentioned above, you should not take on an order without decent payment. On the other hand, at the early stage of development of your activity it is very difficult to achieve a large income. The best decision would be to set an average price that matches your product.

Signing the contract

The last step in the auction procedure is signing the contract. If you were able to offer the most favorable price for your services to the customer or their high quality, you become the executor of the order.

A contract is concluded that specifies the main, including financial, terms of cooperation and the responsibilities of both parties to the transaction. After drawing up this document, the contractor can begin work.

Free participation in tenders

Free participation in tenders is not a myth, it is really possible.
To do this, it is necessary to choose a person who will not only perform the main duties, but also bear full responsibility for them. This person must draw up and send proposals, supervise the bidding, etc. How to find such a person?

There are three main ways:

Company employees collectively decide which of them will be responsible for participating in auctions. It is possible to choose not one, but two representatives from one organization. This method is not always successful, since not every employee is ready to take on such great responsibility.
Hiring a highly qualified specialist. As a rule, he has sufficient experience in working in this area in order to draw up and submit proposals, draw up the necessary documents, solve all organizational issues, process a large flow of information on a daily basis, etc.
Hiring an outsourcing or remote work specialist. This option is less expensive than the previous one. But it may be difficult to find a competent specialist in this field.

How to become an intermediary

An individual can make money on government procurement without any investment by becoming an intermediary. To do this, you need to study all the information and draw up documents in order to act as an independent entity.

The intermediary helps the businessman find a suitable order for government procurement, prepare documents, submit an application and conduct tenders.

The intermediary provides two types of services:

He independently participates in the auction and then gives the received order to a third party for a certain percentage of the transaction.
The contractor helps a specific businessman conduct tenders for an agreed fee.

How much do intermediaries earn? Earnings depend on the amount of the transaction, which took place thanks to the competent work of the intermediary. Usually he takes up to 10% of the size of the won lot.

If you often participate in tenders, be sure to create your own “black list”. It can include all dubious customers, which will save you time and money in the future.

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The main thing for the customer

The vast majority of construction tenders are implemented in the form of an auction for the relevant work and are regulated by Order of the Government of the Russian Federation dated March 21, 2016 No. 471-r. However, there are procurements of work by requesting quotations and proposals, or by holding competitions.

The customer has the right to independently choose the type of procurement procedure, however, the method for determining the winner is regulated by the provisions of 44-FZ in the case of public procurement.

Such rules came into force after the publication of the letter of the Ministry of Finance dated December 20, 2020 No. 24-05-06/100250, canceling the use of standard contracts in the field of construction procurement.

When using 223-FZ, the conditions for determining the winner are developed on the basis of its own procurement regulations.

If the purchase is made from a single supplier, the customer must involve an additional third-party organization to conduct an examination of the work performed.

An exception is the procurement of services related to architectural and design documents.