One of my favourite TV shows is “Air Crash Investigations”. My wife says, “how can you watch that just before getting on a plane?”, to which I reply, “Because it reassures me how safe air travel is”. Ironic? yes, but more about that later. When a plane crashes into the ground, the last thing the pilots are likely to hear (apart from the very loud screeching of twisting metal and the deafening roar of exploding fuel) is the ‘woop, woop’ sound of an electronic alarm and a robotic voice saying “Terrain, terrain – pull up, pull up!”. The process of reading and analysing tender documents is in many ways like flying an airliner. If you don’t get it right the results can be catastrophic. And often, by the time the alarms start going off, it’s too late.

Interestingly, and rather frighteningly, more than 75% of plane crashes are caused by pilot error. What’s even more disturbing is that, in many cases, pilots are unaware that their perfectly healthy plane is heading for the ground…until it’s too late. These types of accidents are referred as ‘Controlled Flight Into Terrain’ (“CFIT”) accidents, where an airworthy aircraft is unintentionally flown into the ground or the sea (e.g. John F. Kennedy Jr). Similarly, when contracts go pear-shaped it’s often discovered that the causes can be traced back to errors in the tender process. More often than not, the information needed to make correct decisions was all contained in the tender documents, which begs the question: “how did the tender team get it so wrong?”. Consider the following real-life examples:

• Tenderer basing its tendered pricing on industry-standard price triggers, only to discover after it won the 10-year contract that its assumptions were incorrect – the price triggers were somewhat out of the ordinary, and it stood to lose up to 5% of its expected revenue over the life of the contract.
• Tenderer basing its pricing on the original scope of works, notwithstanding that the SOW had been greatly increased by an addendum issued shortly after the RFT was published. Oops!
• Tenderer quoting prices on a GST-exclusive basis. Problem was, the contract made it very clear that the quoted prices were inclusive of GST. Say goodbye to 9.09% of the expected revenue!

Common Traps

The process of reading and analysing documents is fraught with hazards. Here are some common ones:

Inexperience:

A person might read information yet lack the experience or technical knowledge to appreciate its significance. However, while it may seem like the most obvious explanation, in my experience it’s rarely the cause of most tender tragedies. More often than not, the person reading the document does possess the necessary level of technical expertise experience, but just fails to notice the information.

Differences in Perception:

We like to think we see the world as it is, but what we actually see is a translation of reality. In effect, we are all living in a virtual reality, a kind of “matrix”. We assume that we all interpret things the same way, but in fact each of us perceives reality differently. Is the dress blue or gold? Is the voice saying “Yanny” or “Laurel”? In the classic image by W.E. Hill titled “My Wife and My Mother in Law”, do you see a young woman or an old woman? Often, when we see something one way it becomes locked in our minds and we fail to be open to other possibilities. The same words in a document could be understood by different people to have very different meanings. As Inigo Montoya famously said in the movie “The Princess Bride”, “You keep using that word. I do not think it means what you think it means”.

Mental Short-cuts:

As a result of experiencing the world over time, our brains develop mental shortcuts, which help us to analyse information and make decisions efficiently. These are known as “heuristics” and includes things such as “rule of thumb” and “educated guess”. Heuristics are helpful in many situations, giving us the ability to quickly make sense of the world around us. For example:

“7H15  M3554G3  53RV35  7O  PR0V3  H0W  0UR  M1ND5  C4N  D0  4M4Z1NG  7H1NG5!   1MPR3551V3  7TH1NG5!   1N  7H3  B3G1NN1NG  17  WA5  H4RD,  BU7  N0W,  0N  7H15  L1N3  Y0UR  M1ND 1S  R34D1NG  17   4U70M47IC4LLY  W17H0U7  3V3N  7H1NK1NG  4B0U7 1 7  –  B3 PROUD!   0NLY  C3R741N  P30PL3  C4N  R3AD  7H15”.

However, heuristics can also lead to cognitive biases, causing out brains to play tricks on us. For example:

Biases:

Consider the following riddle:

A father and his son are involved in a horrific car crash and the man died at the scene. But when the child arrived at the hospital and was rushed into the operating theatre, the surgeon pulled away and said: “I can’t operate on this boy – he’s my son”. How can this be?

Biases can have insidious effects, because we often don’t acknowledge that we hold them. Biases can influence how we perceive information and the weight we give to it when making decisions. Biases can result in false assumptions about the meaning or significance of information. The well-known “confirmation bias” can lead you to place a greater emphasis or even seek out things that confirm what you already believe, while at the same time ignoring or discounting anything that opposes your existing ideas.

Expectations and Assumptions:

See if you can figure this out:

          A girl who was just learning to drive went down a one-way street in the wrong direction, but didn’t break the law. How come?

Or this one:

          What occurs once in a minute and once in an hour, but never in a second?

How many times have you heard someone say, “I just assumed…”, “but I thought…” or “that’s the way it’s always done in this industry”?

Tunnel Vision:

On the night of 29 December 1972, Eastern Air Lines Flight 401 crashed into the ground near Miami, Florida. The three-man crew had become fixated on a faulty landing gear light and had failed to realize that one of the crew had accidentally bumped the flight controls, altering the autopilot settings from level flight to a slow descent. In a holding pattern over a sparsely populated area away from the airport (with very few lights visible on the ground to act as an external reference), the distracted flight crew did not notice the plane losing height and the aircraft eventually struck the ground in the Everglades, killing 101 of the 176 passengers and crew. The subsequent NTSB report on the incident blamed the flight crew for failing to monitor the aircraft’s instruments properly.

Effective situational awareness requires a broad perception of your operating environment. As your focus narrows, you start to miss things and you start “not being able to see the wood for the trees”. Tunnel vision doesn’t just affect pilots. For a fun demonstration of tunnel vision, watch this video and follow the instructions carefully (you will need to concentrate hard).

Brain overload:

Also known as “fog of war” or “sensory overload” – I just call it “stress”. Having too much on your plate and being faced with multiple competing demands on your mental processing capacity can result in decreased cognitive performance. When I think of highly stressful situations, I imagine what the cockpit of Qantas flight QF32 must have been like on 4 November 2010, just after one of its four engines exploded, creating holes in its wing and resulting in multiple system-failures, each one triggering a separate alarm.

Bad environment:

For pilots, this usually means bad weather. For those sitting in an office it could be lack of air-conditioning, a bad chair or instant coffee.

Poor form:

Sports-people might refer to this as lack of “match-fitness”, but it could also include mental or physical illness or fatigue. There’s a reason that pilots and truck drivers have a limit on how long they can fly/drive in one shift. The decrease in attention, working memory and reaction times due to sleep deprivation has been well established.

Poor crew resource management:

By this I mean leadership, allocation of tasks, prioritisation and communication between and among the team. For an example of excellent crew resource management, look no further than the QF 32 incident referred to above. Unfortunately, there are so many examples of poor crew resource management leading to plane crashes, such as where the entire crew are so focussed on solving a problem that they forget to actually fly the plane (yes, it’s often that simple!).

Constraining Culture:

Korean Air had more crashes than almost any other airline in the world during the late 1990s. Their relatively new planes were well-maintained and their pilots were well-trained and experienced. The problem was a hierarchical culture, where first officers didn’t dare question their captains, even if they knew the captain was making mistakes. In 1999, pilot error resulted in a Korean Air cargo plane crashing into a forest, killing all four crew on board. The immediate cause of the crash was a malfunction in the pilot’s instruments. The first-officer’s instruments on the other hand were functioning properly so he would have known that the pilot was flying the plane into the ground, yet, out of deference to the captain, he said nothing to challenge his captain’s actions nor made any attempt to take over the flight with his own controls.

Strategies for navigating around the hazards

The tips I have set out below (many of which are just plain common sense) are useful not just for reading and understanding documents, but can also apply to the entire process of preparing your tender submission.

• Seek certainty: Ambiguity and uncertainty is tender kryptonite and can be minimised by adopting the following strategies:
  • Constantly refer to your instrument panel. Just as the “horizon” is a pilot’s primary flight instrument, the “definitions” section in an RFT or contract should be a tenderer’s primary point of reference. If you want to know what a word in a document means, see if it’s defined in the document (if it always appears with a capital letter, it’s most likely defined). Keep referring back to the RFT, the tender conditions and the scope of works to set and maintain your “flight path”, from receipt of RFT to submission of tender.
  • Seek clarification from the principal/client. I might think the dress is blue, you might think it’s gold, but if the principal says it’s silver…then it’s definitely silver!
  • Any remaining ambiguity should be addressed by stating your assumptions in your tender submission (the contract departures is often a good place for this).
• Adopt a parliamentary approach: after reading the documents, take a break and then read them again. You’ll be amazed what you pick up the second time around. I do a lot of number and word puzzles. If I’m struggling with a difficult sudoku I get up and make a cup of coffee. When I come back to it the answers literally jump out at me off the page. After you’ve read the tender documents a second time, send it to “the other house” (i.e. a colleague). They will notice a lot of things that you didn’t.
• Obtain independent expert opinions: Have the tender documents, especially the proposed contract, checked by an independent tender specialist (such as The Tender Lawyer). Use technical specialists where appropriate to help you understand the scope of works requirements. As well as having relevant experience and expertise, they will be able to read the documents free of the constraining biases and cultural issues inherent in your company or industry. If your in-house business development team is small, you might consider outsourcing the preparation of the tender submission to a specialist tender writing business.
• Work in a team: Collaboration brings diverse perspectives, the opportunity to challenge assumptions and the ability to share the load.
• Stay refreshed: Avoid reading tender documents while tired, sick, stressed or distracted.
• Avoid uncomfortable conditions: I don’t know about you, but my brain ceases to function once the temperature hits 30 degrees.
• Appoint a tender co-ordinator: Ensure that someone is responsible for leading your bid and managing your crew resources (perhaps your BDM). Allocate tasks and communicate to ensure that everyone knows what they have to, so that nothing falls through the cracks (such as incoming addenda).
• Foster a healthy culture: Encourage blameless questioning, double-checking, cross-referencing and proof-reading.
• Come up for air: When you get thrown in the deep end in a turbulent, dark environment, it’s often hard to tell which way is up. Let yourself float to the surface occasionally to get your bearings. Better still, hop in a car, drive up a mountain and take in the view. The world looks different from up there and seeing the “big picture” helps you to regain perspective.

The above can be summarised in three letters: A, B, C – Assume nothing, Believe no-one and Check everything.

Now, getting back to the beginning. Why does a show about plane crashes remind me that flying is the safest way to travel? Because every time there is a crash, or even a safety incident, it’s thoroughly investigated by an independent body (e.g. NTSB/ATSB) and a report is produced identifying the multiple causes (usually a combination of factors) and containing recommendations for change, with a view to reducing the risk of the same thing happening again. If your tender falls in a heap or if you win the tender but your contract goes pear-shape, try to figure out where you went wrong and put in place systems and procedures to minimise the risk of the same thing happening in the future. And one thing that never ceases to amaze me about air crash investigations – although cause and “fault” are attributed, even to humans where appropriate, it seems to be done without unnecessary blaming, finger-pointing and witch-hunting. Why? Because everyone in the industry understands that we are all just humans after all and we all make mistakes, no matter how hard we try, how skilled or experienced we are or how good our intentions are (even I made a mistake once …). And punishing the pilot, air-traffic controller or mechanic who made the mistake will do little to ensure that it doesn’t happen again. We as tenderers can learn a lot from the airline and air safety industry.

Stephen King
The Tender Lawyer
20 February 2019

 

Riddle Answers:

• The “Bird in the Bush” has an extra “the”;
• The surgeon is the boy’s mother;
• The girl was walking down the street, not driving;
• The letter “u” occurs once in the word “minute”, once in the word “hour”, but not in the word “second”.