Winning and Keeping Contracts

Jump to section

• Overview & contents
• i. Important Notice
• 1. Executive Summary
• 2. Why Ekurhuleni
• 3. The Market and the Segment Trap
• 4. Contribution by Segment
• 5. SWOT and Competitive Position
• 6. Winning and Keeping Contracts
• 7. Tendering Into the Public Sector
• 8. Unit Economics and Prime Cost
• 9. Working Capital
• 10. The Five-Year Build and Its Gates
• 11. Funding
• 12. People and Production
• 13. Food Safety and Compliance
• 14. Financial Projections
• 15. Break-Even
• 16. Sensitivity and Scenarios
• 17. Risk Management
• 18. Implementation Timeline
• 19. Returns
• 20. Key Performance Indicators
• 21. Key Assumptions
• 22. Conclusion
• A. Appendix A: Consolidated Financial Summary
• B. Appendix B: Capital Schedules
• C. Appendix C: Funding and Debt Schedules
• D. Appendix D: Risk Register
• E. Appendix E: Glossary

6.1 Winning

• Target sites of 200 to 600 meals a day. Below 200 the distribution cost per meal is punitive. Above 600 a national group will contest it hard and will usually win on price.
• Price off a costed menu, not off a competitor’s rate. Every dish costed to the gram, with a target food cost by segment. A contract won on a price that has not been costed is a loss with a long tail.
• Understand the service level agreement before signing. Penalty clauses, service hours, dietary requirements and audit rights all have a cost. National groups compete on the ability to manage complex service level agreements precisely because those obligations are expensive.
• Ask for an annual price review clause tied to food inflation. Without it the caterer absorbs every input increase for the contract term — and food inflation has run as high as 14.0 per cent within recent memory.

6.2 Keeping

Contract retention is worth more than new business. A caterer that holds a site for five years earns from it without repeating the bid cost, the mobilisation cost or the settling-in period during which margins are always worst.

• Consistency beats creativity. A staff canteen customer wants the same good meal at the same time every day. Novelty is an events proposition, not a contract one.
• Manage the client, not just the kitchen. A monthly review with the site HR or facilities manager, with feedback data, prevents the surprise non-renewal.
• Never fail a food safety audit. One serious incident ends the contract and contaminates every reference.