International Competitive Bids – Big Bids, Big Risks, Big Returns

So what are international competitive bids? The easy answer is that they are bids for contracts that are offered internationally. Why would a company or organization do that?

Countries and large organizations such as The World Bank offer the option of international competitive bids because they want to find the best companies in the world to provide their products and solutions.

International bids are expensive to hold and even more expensive to complete so the value of services and products required are usually in the $ millions and the projects involved are very complex.

Many of the projects involved are infrastructure projects where it is expected that large consortiums of bidders will tender for the work. A significant others are manufacturing projects where large companies are seeking new manufacturing premises or services.

The third area is defense, such a specialized area that countries need to search internationally for products and defense services.

The large funding agencies such as The World Bank and The International Monetary Fund (IMF) often provide the opportunity of international competitive bids on third world country projects.

Many of the consortiums that bid for these projects come from several countries and all of them must, as part of the bidding regulations, contain companies from the host country.

To solve language and currency misunderstandings, most of the bids are completed in UK or USA English and priced in US dollars. This means that when companies bid for these projects they need to hedge their own currencies against the US dollar, and often for many years. This provides an extra layer of risk in what are often extremely risky projects.

Countries, as expected, require their bids to be in their native language and currency. This means that international companies need to employ local bid writers or those that can speak a foreign language. Some countries, luckily stick to USA or UK English, but most still want paying in their own language and funds.

So where do you find these projects so that you can make your own international competitive bids? Well, luckily they are grouped together on just a few different web sites. The major funding agencies have their own web sites and there are a few large web sites that have international projects as well as project feeds from the funding agencies.

If there is a large project being set up such as the Olympic Games Venue then a web site is also set up offering companies all over the world the opportunity to place their own international competitive bids.

As already stated, these projects are extremely risky to complete, particularly those within any third world country. The usual risks found are:

  • Finding the skilled staff who are prepared to live away from home for some months or even years.
  • Transporting goods, materials, tools etc to another country or sourcing them from within that country.
  • Purchasing goods and services to work on the project in one or more currencies and being paid in a completely different currency.
  • Any political unrest that may make completely the project or being paid difficult.
  • Working in several different languages and training staff in yet another language.
  • The volume and sheer size of the projects as well as the sometimes long wait to be paid.

When writing any international competitive bids, a company must be very skilled in managing large scale risk in order to both win the project and more importantly, make a profit from the project.

So why do companies place international competitive bids on projects? The simple answer is that winning one of these bids can be several years work and profits for a company.

Of course that can also be a major risk factor! The fact is that international competitive bids are a growing trend and this kind of work will continue to be available.

 

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