6 pitfalls to avoid when comparing energy tenders

In this series how to select a new broker or energy supplier, we’ve already covered the ten questions to ask a new broker plus what you must ask your supplier if you’re looking for renewable green energy.

In this third edition of the series, we’re focusing on the tender document.

In our experience this is one of the most difficult aspects how to select a new broker or new supplier.

When you receive back your tender documents, they are never short and rarely in the same format, meaning it's never easy to compare and review the documentation and information.

Suppliers use their own formats, presenting quotations and services in many different guises, making it hard to compare apples with apples.

That’s why we asked our Co-op Power energy experts who have managed a variety of tender processes, what they look for when searching for a new energy supplier.

Here we go with our six pieces of valuable advice:

"...failing to make it clear will only delay finding a new provider by overly complicating the process with indecision."

1. Be Clear

Sounds basic, however failing to make it clear will only delay finding a new provider by overly complicating the process with indecision. Without clear guidance, suppliers will simply quote a range of pricing points from raw energy with pass through to fully inclusive and anything in between.

A ‘Pass Through’ contract by the way is just how the non-commodity cost (NCC) element can be priced.

Be specific how you want suppliers and brokers to price with their quote: what price elements of your energy do you need 'fixing' and what elements do you need as 'pass through'?

What services will you need and what duration do you need the contract for.

2. Be Constant

Giving a potential provider an accurate data-set with any changes to meters, supply or consumption, will help the supplier with an accurate proposal, based usage across your estate.

Consumption /Portfolio changes make a big price difference to both your proposal and future contract, so ensure all suppliers start with the same data.

NB: Co-op Power can help create this data to smooth the way to a new provider.

3. Be Certain

If green renewable energy is a requirement for your organisation and need to be included within your quotation, ensure you understand the source of energy from each supplier and how they will prove the credentials backing your renewable green supply.

Will your renewable energy be Renewable Energy Guarantee of Origin (REGO) backed?

Is your provider's REGO retirement scheme audited by a third party?

“We often recommend using a side-by-side template to compare different supplier responses from pricing to services provided.”

4. Be Consistent

Make sure you compare the proposals like-for-like, ensuring all price elements have been included.

We often recommend using a side-by-side template to compare different supplier responses from pricing to services provided.

Not only does this help you easily compare pricing, it also helps you identify each provider has been totally transparent with the costs presented in their tender.

“Failing to have a direct contact should ring alarm bells.”

5. Be Curious

It may come as a surprise, but some suppliers do not provide consultative services such as rudimental customer service, regular meetings or billing provisions.

Your organisations must assess what the broker or supplier will provide compared with your own requirements. If your organisation has the in-house resource and expertise to validate bills, liaise with supplier queries, resolve meter issues whilst working through billing and providing reporting on what could be hundreds of meter-points, then these services may not be required.

As a business customer, what you should definitely have is a named account manager to call upon. Failing to have a direct contact should ring alarm bells. You don’t want to be calling a random customer service line for every query.

And have you considered legislation which is becoming an increasingly important area? As EU and UK rules frequently change, it’s vital to know what’s around the corner, whether your broker has anticipated the impact and how they mitigate the risk to you.

So, be aligned throughout your organisation with requirements and resources you’ll need, before sharing any tender requirements.

And don’t forget, our billing guide is current, accurate and useful to confirm suppliers have included all price elements in their tender quotation.

“The chemistry between you and your providers is equally important”

6. Be Careful

We know many providers will happily supply the right energy, protecting your business with a consistent energy supply whilst advising you on market prices, however there’s another equally vital factor.

The chemistry between you and your provider is equally important.

You must know you can trust them, work together and understand how they serve you.

Obtaining references and speaking with a handful of their existing customers are worth the time and effort to gauge both the positive attributes, and what may niggle customers. A collegiate working relationship with your supplier will only heighten productivity.

Communicate regularly with providers throughout the tender process to ensure you know you will obtain good customer service post sale.

Finally, be honest with your supplier, both positively or when you need to resolve the issue before any issues escalate.