4As Opposes Imposition Of Tender Fees by TNB

In response to the imposition of RM5,000 tender fees by Tenaga Nasional Bhd (TNB) the CEO of the Association of Accredited Advertising Agents Malaysia (4As) Khairudin Rahim has responded as follows in a media statement:

Tenaga Nasional Berhad (TNB) recently issued an “Open Tender” invitation on 14 October for Agencies to submit their company information by 29 October. A non-refundable Tender Fee of RM5,000 per Agency is part of the TNB procurement requirement for all parties who submits for this tender.

The 4As found it odd that a Tender Fee be levied even for the preliminary Request for Information (RFI) stage and wrote officially on 18 October to TNB stating this is an unfair requirement and appealed that the Fee be waived, at least for the RFI stage.

TNB has studied our appeal and replied the Tender Fee requirement shall remain. They want to encourage serious parties to participate from the RFI stage onwards to put forward the best offer and to not waste the time of their evaluation panel.

The Tender Fee is their way to ensure only serious parties get involved and is applied for all types of Tender.

First and foremost, the 4As is of the opinion that is unreasonable to demand a fee from Advertising Agencies merely to submit their credentials at the Request for Information stage. If TNB is concerned about seriousness of bids, or the ability of Agencies to deliver and execute campaigns, there are other qualifying criteria that could be applied as a prerequisite.

In addition, a simple review of the Agencies portfolio or work, case studies,
client lists, and client testimonials would also be a clear indication of their seriousness.

Furthermore, every Agency’s pitch proposal is customized and complex involving hundreds of man hours and external cost in order to develop a worthy proposal that each Agency is prepared to defend and uphold its effectiveness reputation.

This includes uncovering relevant consumer insights, articulation of a credible brand purpose, an inter-connected communications strategy, creative work that drives marketing effectiveness and finding ways to harness the use of people as a powerful brand medium.

Each proposal includes the elusive, inspirational “idea” that with consistency and properly practiced creativity, can take the brand from good to great.

Perhaps most crucially, when an Advertising Agency decides to pitch for any company’s brand, they pitch to win on merit. We will participate if, in our judgment, the selection panel is unbiased. We seek reassurance that an objective scoring and evaluation system will be adopted by the Advertisers selection panel.

Not having one raises alarm bells and triggers a withdrawal. Not giving a clear pitch brief will also trigger the same. A clear, succinct, and
inspirational brief directly contributes to great work.

Finally, every decision to pitch is a serious commercial decision made by the Head of the Agency as we too cannot afford to waste time in pursuit of any type of new business because the time and cost we laboriously spend preparing for each pitch (aiming for the better strategy and the better ideas) has to be carefully considered and balanced against
ongoing commitments to deliver for our existing clients.

So by nature we are absolutely serious whenever we make a decision to pitch. TNB should not generalize nor assume that some Agencies might decide to enter the Tender, and waste their evaluation panel’s time, even if they know they are not qualified, competent, nor have the resources and talent to deliver.

Agencies also value time. Agencies do not participate in pitches just to ‘test the waters’. Far, far from it! The 4As unfortunately was not able to influence a change in TNB’s practice for this particular Tender. We will however re-appeal and engage with them in order to hopefully come to a fair resolution for future Agency searches/pitches.