In Nigeria’s massive contract and procurement ecosystem, SMEs have the potential to thrive but many don’t. While government agencies and private firms increasingly reserve slots for small businesses, most SMEs still struggle to win bids or execute contracts successfully.
So, what’s going wrong and how can you turn the tide in your favour?
1. Poor Documentation and Compliance
Let’s be real: too many SMEs lack the basic paperwork needed to even qualify for a bid.
Common issues:
- Expired CAC registration or no updated CAC forms
- Missing or invalid Tax Clearance Certificates
- No PENCOM, NSITF, ITF compliance certificates
- No audited financials
Reality check: Bidders are screened out before their proposals are even opened just because they didn’t meet documentation criteria.
Solution: Work with a consultant or legal advisor to create a “bid ready” file. Always keep your compliance documents current.
2. Lack of Understanding of the Procurement Process
Many SMEs don’t study the bidding instructions carefully. They either submit incomplete proposals or use a generic format that fails to meet the technical and financial requirements.
Tip: Read the bid documents like a contract. Highlight deadlines, formats, required documents, evaluation criteria, and submission instructions.
3. Weak Proposal Packaging
You may have the best offer, but if your proposal is poorly written or disorganized, it will likely be tossed aside.
Mistakes include:
- Typos and grammatical errors
- No cover letter or company profile
- Random arrangement of documents
- No proof of past work or references
Solution: Learn to package your proposals like a pro or hire someone who can. Presentation matters.
4. No Track Record or Demonstrated Experience
Procurement isn’t charity. If you can’t prove capacity, you won’t be trusted with execution.
But here’s the trick: Start with smaller contracts and private sector jobs. Build a portfolio. Gather:
- Letters of award
- Completion certificates
- Client testimonials
These documents speak louder than claims.
5. Pricing Errors
Some SMEs either:
- Overprice (due to greed or poor cost estimation)
- Underprice (to beat competition but can’t deliver)
Both are fatal.
Advice: Learn cost estimation. Factor in taxes, logistics, inflation, and profit margin. Your price should reflect capacity not desperation.
6. Poor Follow Up Culture
Some SMEs submit bids and vanish. No follow-up, no enquiry, no request for feedback.
Meanwhile, competitors are checking in, networking, and improving based on evaluation reports.
Fix: Politely follow up after submission. Ask for feedback if you lose. Show your face. Build familiarity with procurement officers.
7. Lack of Legal and Strategic Guidance
Many SMEs jump into bidding without understanding:
- Their rights during the procurement process
- How to challenge irregularities
- How to negotiate favourable contract terms
Suggestion: Partner with a legal advisor or business development consultant. They’ll help you stay compliant and smart at the same time.
How to Succeed as an SME in Contract Bidding
- Be Documentation Ready: Maintain a file with all compliance documents, updated quarterly.
- Invest in Proposal Writing: Learn or outsource it.
- Build Your Track Record: Start small and scale.
- Network Strategically: Attend procurement briefings, vendor trainings, and forums.
- Stay Updated: Subscribe to tender bulletins, procurement portals, and industry updates.
- Get Professional Help: Don’t DIY everything get experts involved.
Conclusion
Bidding for contracts isn’t just about luck or “connections.” It’s a skill and like every skill, it can be learned, refined, and mastered. SMEs that take bidding seriously, strategically, and legally stand a much better chance of not just winning, but delivering and growing.
