How to read an ITT: lots, TUPE and pricing

An invitation to tender typically arrives as a zip file of eight to fifteen documents, and the instinct is to open the one called "Specification" and start writing. Resist it. The pack is designed to be read in a particular order, and the documents that decide whether you should bid at all are usually not the specification. This is a working guide to the pack, in the order that saves you time.

First pass: the documents that decide go or no-go

The instructions to tenderers (sometimes "ITT conditions") tell you the deadline, the submission portal, the evaluation weightings, word limits, and mandatory requirements such as insurance levels, accreditations and certifications. Fifteen minutes here tells you whether you can comply at all and how the bid will be marked. If a mandatory requirement rules you out and cannot be fixed before the deadline, stop reading and keep the notice on file for the re-let.

The pricing schedule shows you the shape of the money: unit rates, day rates, a fixed annual sum or milestone payments, plus provisional items for extras. Look for indexation (does the price rise with inflation, and on which index?), contract length and extension options. A three-plus-two-year term with indexation is a different business proposition from a fixed-price two-year deal.

The TUPE annex, if present, is the single most price-sensitive document in the pack. Staff transfers are common wherever an ongoing service changes hands: cleaning, catering, security, care, facilities and grounds contracts all regularly carry them. If an incumbent contractor's staff are assigned to this contract, they will likely transfer to you on their existing terms under TUPE. The annex lists roles, hours, pay, length of service and pension arrangements. Those salaries become your cost base, not the rates you would have chosen, and length of service transfers with the person, which matters for potential redundancy liability if volumes drop. Price from the annex, and if it is missing or obviously stale, ask for an update through a clarification question.

Lots: what they are and how to play them

Larger contracts are commonly divided into lots. Sometimes the split is geographic (one lot per region, borough or building cluster), sometimes by service (a facilities contract split into cleaning, security and maintenance, or an IT contract split into infrastructure, support and development).

The instructions state the rules of the game: whether you may bid for one lot, several, or all, and whether there is a limit on how many lots a single supplier can win. Read these rules carefully, because they change strategy:

• Bid the lots you can genuinely service. Winning a lot you cannot staff, reach or support economically is how contracts turn unprofitable.
• Check for cross-lot discounts. Some ITTs let you offer a discount if awarded multiple lots. Model it before offering it.
• Smaller lots are the entry point. Buyers split contracts into lots partly to open them to smaller firms. A single lot is a realistic first public contract for a firm that could not deliver the whole scope, and delivering it well positions you for more at re-let.

Each lot is usually evaluated separately, so a multi-lot bid means tailoring responses per lot. Referring to the wrong lot's sites or systems in a method statement is the kind of error evaluators notice.

The specification: inputs or outcomes

Specifications come in two styles. An input-based spec says what to do and how often: clean these areas daily, run this many sessions a week, service the equipment quarterly. An output-based spec says what the result must look like: premises maintained to a defined standard, response times met, system availability above a stated level.

The difference drives your pricing risk. Inputs are easy to price and inflexible when demand shifts; output specs give you freedom over methods but transfer demand and performance risk to you. Read which one you are pricing, and check how variations are handled when the client adds a site, a user group or a one-off job mid-term.

Contract terms, KPIs and deductions

The draft contract sets out performance measurement: KPIs, service credits or deductions for failures, and termination triggers. Look specifically at how a "default" is defined, how long you get to rectify one, and whether deductions are capped. These clauses are where a marginal price becomes a loss-making contract, and they are rarely negotiable after award.

Use the clarification window

Every ITT has a deadline for clarification questions, usually a week or more before submission. Questions and answers are anonymised and circulated to all bidders. Use the window for anything genuinely ambiguous: missing TUPE data, contradictory requirements, items in the specification that are absent from the pricing schedule. A precise clarification question costs nothing and can save you from pricing a guess. What it cannot do is extend the deadline, so front-load your reading: a full first pass in the first two or three days, questions lodged early, and the writing time protected for the questions that carry the marks.

Read the pack in this order and the decision to bid, and the price you bid at, will both rest on the documents that actually determine them.