£100 tender charge ‘sets a dangerous precedent’

UPDATE: Following Design Week’s report, Gentoo Group has now agreed to remove its £100 charge. You can read more here.

Howard Lake

Source: Howard Lake

An OJEU tender that asks people to pay £100 to submit their application sets a ‘dangerous precedent,’ according to one design group.

The tender, which has been put out by housing association Gentoo Group to procure advertising, design and marketing services, stipulates that an invoice for £100 will be issued once a submission has been received.

It invites applications from small or medium enterprises and a deadline is in place for 6 January. It is not clear whether or not the £100 will be repaid later in the tender process.

One of the consultancies which had considered application is Playgroup. The consultancy’s creative director Steve Cluett says the tender sets ‘a dangerous precedent’.

He says, ‘Free pitching is bad enough but this is just a slippery slope. Not a huge amount of money, but needless to say, on this occasion we will not be taking up their kind offer.’

In an email seen by Design Week, Gentoo Group principal procurement officer Colin Watson says the fee ‘simply helps us cover the administrative costs associated in preparing the tender documents.’

He adds, ‘We have had this charge in place now for a number of years and aren’t the only organisation who adopt this process. If you look at the potential spend over 3 years, it is £1.5m, so a 0.007% charge is seen as a minimal charge.’

Design Business Association expert Simon May, who is also a procurement lawyer says, ‘There is nothing in law to say you can’t do this and it may be that they’re just screening people out.’

May believes that the practice of charging consultancies to submit a tender is, although unadvisable, not unprecedented and he says, ‘When the Central Office of Information was going they did it and we worked hard to get those fees removed.’

Gentoo’s tender requires the submission of credentials and as such wouldn’t contravene any laws according to May who says, ‘If they were asking for a creative pitch and asked the consultancy to pay, there would be an issue of ownership.’

One potential issue May raises could be how much money is being made from these submissions. If there were 100 submissions, that would mean £10,000 had been taken. Gentoo Group was unable to confirm how many submissions had been received at the time of publishing.

May believes that although the tender is not illegal Gentoo Group should seek legal advice ‘simply to work out what their position is as the tender could cause problems and be detrimental for the brand,’ as these kind of tenders are ‘such a rare occurrence’.

The problem could simply be that the people putting the tender together ‘are from a marketing and not a design background,’ says May.

He adds that if there are further stages to the tender ‘one way to run it might be to not cash payments and to give anyone unsuccessful their money back’.

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Comments
  • Christian Stanley November 30, -0001 at 12:00 am

    I received the invitation via email and assumed it was a scam. Which of course it most likely is. DBA where are you? – comments please…

  • Steven Nicholson November 30, -0001 at 12:00 am

    Picking clients to WORK WITH is tricky. This “fee” just makes the process a lot easier… Great work comes from collaboration, trust and valuing the time and effort of both parties.

  • Steven Nicholson November 30, -0001 at 12:00 am

    *Clarification* This clearly indicates clients focused on margins rather then great, effective design. I would avoid such tenders.

  • Christian Stanley November 30, -0001 at 12:00 am

    My mistake – I was so disgusted I never made it to the end…

  • Vicky Zentner November 30, -0001 at 12:00 am

    Choosing a design solution by tender is lazy decision making! I suggest businesses PAY each tenderer a fee – that would make them think whether they really need a limitless number of options to choose from.

  • Leigh Riley November 30, -0001 at 12:00 am

    This needs to stop. You wouldn’t call several plumbers up and ask them to pay you to show you how to fix your plumbing – and frankly a plumber would be out of their mind to agree to it. It’s bad enough when it’s free pitching, let alone having to pay to provide ideas, ideas that would otherwise have to be paid for.

    Most of us in the design industry have studied and practised for years to learn our craft, free pitching, and worse still, having to pay for a tender, is massively depreciating our services, we are allowing it to become the norm and handing more and more control over to the client… Yet there’s a counter productive attitude of “if we don’t do it, our competitors will” within the industry. I see this point, which is why our industry needs to be regulated. This kind of practise is hurting out industry. We simply have to put a stop to it.

    If nothing else, clients should have to pay a fee for design studios and agencies to produce ideas for tender. Our time must be paid for. If we don’t respect and value our time how on earth can we expect anyone else to?

    If you’re not part of the solution, you’re part of the problem.

  • Paul Roper November 30, -0001 at 12:00 am

    What a total joke!! We don’t do FREE pitch work and we’d definitely never pay someone. Nothing is for FREE! Someone will be paying for the time. Maybe the design companies existing clients.

  • James Skinner November 30, -0001 at 12:00 am

    Vicky is right on the money. Tender based procurement is risky at best – how can you base a 3 year relationship on a written document and 60 minute pitch? Anything that encourages businesses to properly engage with agencies and to recognise that such engagement costs money should be applauded. This is entirely the opposite.

  • Tom November 30, -0001 at 12:00 am

    Small price to pay to enter but dangerous game being played by those tendering!

  • Mark Magidson November 30, -0001 at 12:00 am

    Sadly not a new event. International architectural competitions have at times asked for considerably more to enter ( usually for an expensively bound “brief” ). Add to this the industry that has grown around the entire procurement process and we have arrived at the state we are now in.

  • Keith Hagan November 30, -0001 at 12:00 am

    Unbelievable arrogance! How much more do you need to know about an organisation?! If, as designers and marketeers, and with a united front, we were to blacklist these companies, we’d see how far they’d get doing their own design and marketing work. I expect we’d see Comic Sans and watermarked clip art all over the shop.

  • Christian Stanley November 30, -0001 at 12:00 am

    How about the winner refunds all the others from the ludicrous fees they would have to charge to make it worth taking part…?

  • C G November 30, -0001 at 12:00 am

    I just went to a Restaurant. I asked them to pay me a ‘nominal fee’ to eat their food which I would pay back if I liked it.

    Didn’t go down too well.

    A lot of comments about sounding out and collaboration, trust and valuing one another – charging a fee eradicates all of this.

    I cannot see why an agency should/would be responsible for covering a company’s admin costs for their work!

    Still cannot understand why designers have to put up with soo much s**t – companies all want good design they just don’t want to pay for it.

    Free pitching is bad enough but now you’ve go to pay for the opportunity.

  • James Cowdale November 30, -0001 at 12:00 am

    I would like to say ‘unbelievable’ but in this day and age it really doesn’t surprise me. As an agency we have always avoided pitching but unfortunately it seems to be the norm these days.

    An agency should be selected on their ability to carry out the project, not down to the showcasing of pointless creative that acts more as a beauty parade than anything else.

    And now we’re asked to pay for the privilege!

    Surely the commitment from the agency is the fact they’ve slogged their guts out producing multiple concepts only to be told that another agency ‘understood the brief better’ or ‘were prepared to deliver more at this stage’.

    A business should set aside a budget to cover the agencies time. A completely transparent approach will get the most from an agency and they won’t feel so disgruntled if not successful.

    Let’ hope this isn’t a sign of things to come. Otherwise, I may go into plumbing…

  • John Scarrott November 30, -0001 at 12:00 am

    This is an issue that has been around for some time. It won’t be solved overnight but here’s what we’re doing.

    From the agency side, design businesses join the DBA because they believe that free pitching is not the best way to select an agency, either for them or for their client-to-be. We give members a code of practice that supports them on this and they can use to support/explain their way of working. We also have a template letter that can be used to address requests for free creative. Both of these have proven to be effective for agencies in creating useful conversations that have lead to changes in pitch practice from their clients and lead to them winning work without free pitching. I know this because members have shared their examples with me.

    Here’s one example:
    http://www.dba.org.uk/membership/documents/1Exesios.pdf

    And another:
    http://www.dba.org.uk/blog/winwin.asp#.UqhlIxx5VUE

    And I have more……..

    From the client side we have developed a set of Guides to Buying Design that act as a blue print for clients on the best practice approach to selecting a design partner.

    You’ll find them here:
    https://www.dbadirectory.org.uk/dba/advice

    These guides offer specific advice for clients around the pitch process, clear descriptions of the ‘credentials’ and the ‘creative pitch’ and guidance that they should expect to pay if they are looking for a creative pitch and why. The guides are free and available to any client or design business, member or not. They have been used by members and in some cases placed on their website as a resource for their clients.

    We are setting up partnerships to promote these guides. The first is with ISBA (Incorporated Society of British Advertisers), a major client membership association. They help their members find agencies. They have endorsed the guides and promote them and the DBA Directory to their members.

    The guides have proven effective for clients in helping them understand the best way to get to the right decision, as a refresher and benchmark for their existing processes and also to ensure consistency when they have diverse and spread design managers. Again I know this because clients have shared this feedback with me.

    Email me and I’ll share these with you.

    I’m not saying these situations are easy for either client or agency but we are aiming to build a bridge between the two groups to create better outcomes for all. Email me directly if you’d like to discuss.

  • Gentoo Communicatios November 30, -0001 at 12:00 am

    We acknowledge that charging suppliers £100 to submit a tender does not fit with the Gentoo brand and what we stand for.

    Despite being a large Group we actively support local and smaller enterprises and have already changed a lot of our systems internally to reflect this, making it easier for people to contract with us. We have removed the charge for this tender and have begun a review of our policy on this matter.

    Sharon Appleby, Head of Communications, Gentoo Group

  • John Scarrott November 30, -0001 at 12:00 am

    Here’s what we’re doing to tackle this. We give our members a code of practice that supports their behaviour around not undertaking unpaid creative work. We also have a template letter that can be used to address requests for free creative. These have proven to be effective for agencies in creating useful conversations that have lead to changes in pitch practice from their clients or lead to them winning work without free pitching. I know this because members have shared their examples with me. Here’s one example: http://www.dba.org.uk/membership/documents/1Exesios.pdf And another: http://www.dba.org.uk/blog/winwin.asp#.UqhlIxx5VUE I have more……..

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