Singapore Tenders – What can we learn about the market by studying its data?

Submitted by tenderbotadmin on 25 March 2015 - 12:42AM

In this post, we discuss the Singapore tenders market at a broad level. We share our analysis which reveals the market’s size and constituents. We hope that companies tendering or looking to bid for tenders in Singapore would find these insights useful.

Market Statistics

In the past year, around $15B was awarded through 40,000 open tenders in Singapore. This represents about 4% of Singapore’s GDP (note that the figures only take into account publicly available data). There were around 14,000 participating companies that submitted more than 200,000 bids in total. Before we look at the results of our analysis, we first briefly discuss how we arrived at those conclusions.

Method

Our profiling technology classifies each company and each tender into 1 of about 50 categories. For the purposes of this blog, we map each of these 50 categories to 1 of 5 general industries:

  1. Construction
  2. Engineering
  3. Infocomm
  4. Services and Supplies
  5. Training

This simplification allows us to better understand the data at a broad level. However, by simplifying things we do lose some of the texture of the data. For example, there are some tenders that sit between 2 of the industries (such as a tender for both consultancy services and training). Nevertheless, this does not affect the conclusions that we draw from our analysis.

Breakdown of Tenders, Awarded Value and Companies by Categories

We now turn our attention to 4 statistics for the overall market. In particular, we explore:

  1. Proportion of companies in each industry
  2. Proportion of tenders in each industry
  3. Proportion of bids in each industry
  4. Proportion of awarded tender value in each industry

This stacked bar chart illustrates these 4 statistics and gives a nice overview of the entire market. It shows how each industry contributes to the total of each statistic in a single chart:

A couple of points jump out at us:

  1. Construction: While having the smallest proportion of tenders, this industry captures the most value by far. In fact, the top 3 tenders were worth over $1B each!
  2. Training: While having the largest proportion of tenders, this industry captures the least value (about half of the training tenders were awarded for $10,000 or less).

A slightly less obvious point is that Engineering and Infocomm are the 2 industries in which their proportions of bids is actually smaller than their proportions of tenders. This suggests that these industries are generally less competitive compared to the rest. Another way to look at this is to compare the number of bids received per tender for each industry:

It is much clearer now that Engineering and Infocomm tenders received the least amount of competing bids on average. While this may be interesting, it might not be that useful for practitioners and business owners yet. These numbers represent an industry average and we have to go a little deeper.

Take Engineering as an example, which has several sub-industries including “Aircon and Ventilation”. This sub-industry has a Bids-to-Tender ratio of about 5.8, which places it near the upper range of the chart above. Incidentally, “Aircon and Ventilation” is one of the sub-industries which is relatively more price sensitive, with a larger percentage of tenders being awarded to the lowest bid (we cover this analysis in a later post – Does the lowest bid always win?). In this example, it does suggest that a higher Bids-to-Tender ratio correlates with greater price sensitivity. The reason for this could be inherent to the sub-industry, for example competitors may be finding it hard to differentiate their offers. Or perhaps it has less to do with the industry and more to do with the evaluators? Afterall, studies (show link) have shown that when faced with many more options, evaluators resort to selecting the safest (or easiest to justify) option. In tender evaluations, the safest (default) option would understandably be the cheapest bid, as long as all tender requirements are complied with.

At TenderBoard, we go deeper into the data, down to the company level, to help them better understand the dynamics of the industry they are competing in. For example, we help clients answer these questions:

  1. What is my bidding performance and how does it compare against the market?
  2. Who are my closest competitors in the tender space?
  3. How does my pricing compare to the winning bids?
  4. How do my bids compare to my competitors?

These certainly aren’t the only questions that matter to a company trying to understand its competitive position (further, tender data is not the only source of competitive intelligence). However, understanding the answers to these questions and being able to track the results across time allows a company to measure its performance and push it in the desired direction.

Conclusion

We hope that this quick discussion has demonstrated the insights that are possible by analysing the tender data. We will be sharing more in future posts as we continue to tease out interesting insights from the data. We love to get feedback so do feel free to share your thoughts and suggestions in the comments below!