Working with the government can be lucrative for SMEs. The public sector spends more on contracts than on providing services itself. In 2014-15, the figure spent on procurement was a hefty £242 billion.
The government’s policy is to award contracts as often as possible to smaller businesses and has stated an aim to reach 33% of all procurement going to SMEs by 2022. With that aim in mind, there have been a few recent changes to help smaller firms bid on public sector contracts:
Securing government contracts still isn’t easy for an SME, however. Any business looking to move into the public sector needs all the help they can get. There’s no one sure-fire tactic for winning public sector contracts but here’s five tips to help you with the process.
All opportunities to tender for contracts must be publicly advertised and are shared via the Contracts Finder portal. It would help if you didn’t wait around for new opportunities to appear there, though.
There are several ways that you can be more proactive in seeking chances to tender for contracts:
This kind of proactive approach is called ‘pre-market’ engagement. It’s how you can get involved in the procurement process before a contract officially goes out to tender. That way, you may even get to influence the nature of the formal tender process.
A scattergun approach isn’t the best way to win government contracts. You can’t tender for every opportunity that arises and hope that you win one. Instead, be realistic about your firm’s stature. Make sure you focus on the tenders you have a genuine chance of winning.
If you’re new to public sector tendering, it’s best to first look at opportunities worth less than £100,000. That’s the threshold under which you don’t have to complete Pre-Qualification Questionnaires (PQQ). Those questionnaires remove many firms from the tendering process at the preliminary stage.
When you bid for a contract, make sure to play to your strengths as an SME. The government likes to work with smaller firms as they can often offer better value and flexibility over big corporations. Don’t shy away from highlighting these strengths by pretending to be larger than you are. That’s a common mistake that many small business’ make.
Before tendering for any contract, you’ll want to know the procurement process inside out. This is the route by which the tender is going to get awarded. The authority advertising the contract will share all the details of the process at the outset.
Only by understanding how a tender is going to get awarded, can you give your company the best chance of getting it. Each procurement process differs according to the details of the contract. The following, though, are the three main steps that most follow:
Once you’ve identified an opportunity, it’s time to build your bid. By examining the procurement process, you’ll know what you need to do. Make sure you follow the available advice to the letter.
A bid should comprise of a selection of documents outlining your company’s plan to fulfil the available contract. Things that you should feature in your tender include:
You’re not likely to succeed with your very first public sector tender. It can happen, but more often than not, you’ll need to deal with some rejections. If you get turned down a few times, the best advice is to keep trying. Look back on your failed bids and identify places where you can improve in the future.
If you feel a tendering process hasn’t been handled fairly, you can take action. The Public Procurement Review Service exists to challenge unfair practice. By contacting them, you can encourage the government to investigate any potential wrongdoing.
If public sector contracts go to SMEs, it’s a win-win for everyone. The government often gets better value and can support an essential part of the economy. Smaller businesses, meanwhile, open a lucrative new avenue for ongoing work. They also get a boost in public profile from providing a service to the government.
For those reasons, securing work from the government isn’t easy. Every tender that goes to market gets lots of interest. By following the tips discussed then you’ll be able to identify the right opportunities for your company, produce a winning bid to give you the best chance of landing a transformative public sector contract.