How to keep a public contract when it comes up for renewal

Winning a public contract is hard. Keeping it should be easier, and for good contractors it usually is. Buyers do not like change. A new contractor means a transition, new keys, new people and new risk. But incumbents lose contracts all the time, mostly for reasons they could have seen coming.

How renewal usually works

A typical public service contract has:

• An initial term, often two or three years.
• Extension options, such as "up to two additional one-year terms at the City's sole discretion."
• Price terms for the extensions: fixed, tied to an index, or open to negotiation.

The extensions are the buyer's option, not yours. If the buyer is happy, using the extension is easy: one letter, no new competition. If the buyer is unhappy, or the extension options are used up, the work goes back out to tender, and you compete like anyone else. See why the best contracts come back.

What buyers weigh

Some buyers run formal vendor performance reviews, with scores for quality, timeliness, communication and safety. Federal contracts and larger BC buyers often do. Smaller buyers decide more informally, but they think about the same things:

• Complaints. How many, how serious, and how you handled them.
• Responsiveness. Do you answer the phone? Do call-outs happen on time?
• Quality. Do inspections pass? Does the facility manager have to chase you?
• Reporting. Are logs, reports and timesheets on time and accurate?
• Safety. Any incidents, near misses or WorkSafeBC issues?
• Billing. Are invoices correct and easy to approve? Surprise extras hurt.
• Price. Is your extension price reasonable compared with the market?

Treat the contract as your next bid

Start the relationship well. The first 90 days set the buyer's view of you. Over-staff the transition and check in often.

Keep a contract file. Logs, inspection results, photos, compliments, completed deficiencies and fixed complaints. This is your evidence at renewal and in any dispute. Read the records that protect you.

Meet regularly. A short quarterly check-in with the contract manager catches small problems before they become reasons to switch.

Fix problems in writing. When something goes wrong, acknowledge it, fix it and confirm the fix by email. A buyer remembers how you handled a problem more than the problem itself.

Offer small improvements. A better schedule, a cost saving or an energy idea. Buyers like contractors who make them look good to their managers.

Mind your people. Turnover on site is often what buyers notice first. See hiring for a contract you just won.

When the retender comes

Even a happy buyer may have to retender when options run out. As the incumbent, you have real advantages: you know the site, the true quantities and the buyer's priorities. But incumbents also lose for three common reasons:

1. Complacency in the bid. A thin proposal that assumes the buyer knows you. The evaluators may not be the people you work with. Write it as if they have never heard of you. See how to write an RFP proposal.
2. Price drift. Your price crept up over the term while the market stayed flat. Rebuild your price from your real costs, not last year's invoice. See reading award notices and bid results.
3. Changed scope. The retender adds requirements you did not notice. Read the new documents from scratch. See how to read a tender.

If the retender involves your unionised workforce, check how successorship applies. See successorship when contracts are retendered.

If you lose anyway

Ask for a debrief, hand over professionally, and stay in touch. Contracts that change hands sometimes come back early when the new firm struggles, and buyers remember the incumbent who left well. See how to get a bid debrief.