Top 5 things to consider when running a tender to outsource customs compliance

Outsourcing customs compliance can be a strategic shift for businesses looking to streamline operations, reduce risk, and improve efficiency while remaining compliant with HMRC. A successful outsourcing initiative relies on a well-structured Request for Proposal (RFP). Here are five key considerations to ensure your RFP process delivers the best results:

Clearly define your scope and requirements

Before issuing the RFP, thoroughly assess your current customs processes, identify pain points, and define specific needs. Detail the scope of services required, including import/export volumes, commodity types, countries involved, and any specific regulatory requirements. A precise scope enables targeted solutions addressing specific needs, leading to accurate cost estimations and ‘no surprises’. This clarity streamlines implementation, improves vendor selection based on relevant criteria, and facilitates performance management through defined KPIs. Ultimately, a well-defined scope empowers businesses with greater control, transparency, and a higher likelihood of achieving desired outcomes by ensuring the chosen provider delivers a tailored, effective solution.

Key elements include:

• Specific customs procedures (e.g., import declarations, export clearances, duty mitigations)
• Required technology integrations (e.g., ERP systems, customs platforms)
• Reporting requirements and key performance indicators (KPIs)
• Expected volumes and transaction types

Focus on provider expertise and experience

Look beyond price and evaluate providers based on their expertise in customs regulations, industry knowledge, and experience with similar businesses. Prioritising provider expertise and experience in a customs compliance RFP delivers significant benefits, for example expertise can deliver an efficient customs process, leading to faster clearance times and optimised duty costs, whereas experience with similar businesses and commodities allows for tailored solutions addressing specific client needs. Furthermore, a provider's established knowledge base ensures they stay ahead of regulatory changes, providing proactive compliance support. Ultimately, focusing on expertise and experience translates to improved compliance, cost savings, and peace of mind for the business.

Selecting a customs compliance provider who can deliver in the below areas will lead to reduced compliance risks, minimising potential penalties and disruptions:

• Track record of successful customs compliance management
• Knowledge of relevant trade agreements and regulations
• Experience with specific industries and commodities
• Technological capabilities and security measures
• Authorised Economic Operator (AEO) status
• Voluntary Standard for customs intermediaries

Emphasise communication and collaboration

Effective communication is crucial for a successful outsourcing partnership. Outline your expectations for communication channels, reporting frequency, and escalation procedures. Emphasising communication and collaboration in your customs compliance RFP significantly benefits clients. Clear communication channels, reporting frequency, and escalation procedures ensure transparency and responsiveness from the provider. Designated points of contact and preferred methods streamline communication, facilitating quick issue resolution. Regular reporting keeps the business stakeholders informed of customs activities and performance, enabling proactive management. Well-defined escalation paths ensure timely resolution of critical issues, minimising potential disruptions. This focus on communication fosters a strong partnership, builds trust, and enables proactive management of customs compliance, ultimately contributing to smoother operations and reduced risks. 

Key points to call out in your RFP are:

• Designated points of contact and their availability
• Preferred communication methods (e.g., email, phone, video conferencing)
• Reporting frequency and format
• Processes for issue resolution and escalation
• Quarterly Business Reviews (QBRs)
• Continuous Improvement Programmes

Ensure data security and confidentiality

Customs compliance involves handling sensitive business information. Addressing data security and confidentiality in your customs compliance RFP is crucial for business protection. Enquiring about providers' data security policies, access controls, regulatory compliance (e.g., GDPR), and incident response plans safeguards sensitive business information. These considerations minimise the risk of data breaches, protecting the client from financial and reputational damage. A provider with robust security measures ensures data integrity and confidentiality, maintaining trust and complying with legal obligations. By prioritising data security in the RFP, businesses mitigate risks, maintain control over their information, and ensure business continuity in the event of a security incident.

Your RFP should address data security and confidentiality requirements such as:

• Data security policies and procedures
• Data storage and access controls
• Compliance with data privacy regulations (e.g., GDPR)
• Incident response plans

Establish a realistic timeline and budget

Define a clear timeline for the RFP process, including deadlines for proposal submission, evaluation, and vendor selection. Establishing a realistic timeline and budget in your customs compliance RFP is essential for effective decision-making. A clear timeline with deadlines for submissions, evaluations, and selection ensures a structured process and timely completion. Defining a realistic budget, including implementation costs, ongoing fees, and potential cost savings, allows for accurate proposal evaluation and informed vendor selection. Considering long-term value and return on investment helps clients choose a provider that offers sustainable cost benefits and aligns with their overall business objectives. A well-defined timeline and budget promotes transparency, facilitates efficient vendor selection, and maximises the value of the outsourced customs compliance services.

Give thought to:

• Implementation costs and ongoing service fees
• Potential cost savings from improved efficiency and reduced risk
• Long-term value and return on investment

By addressing these five key areas in your RFP, you can attract qualified providers, streamline the selection process, and establish a strong foundation for a successful customs compliance outsourcing partnership. This proactive approach will help mitigate risks, improve efficiency, and ultimately contribute to your business's bottom line.