Working with the government or in the public sector 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.
It’s government policy to award contracts as often as possible to smaller businesses. The government 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:
- All available tenders now get published on the Contracts Finder portal.
- The entire public sector supply chain must get paid within 30 days.
- Procurement processes are more straightforward and more transparent than ever before.
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.
Booking Live are specialists in scheduling software for small business. We also work on government projects, which ideally positions us to give expert advice to SMEs looking to work with the government.
Tips for SMEs Looking to Work with the Government
There’s no one sure-fire tactic for winning public sector contracts. Working with government departments or organisations is very beneficial for a small business. As such, contracts are fiercely fought over. If you follow our five insider’s tips, you’ll give yourself a fighting chance of coming out on top.
Be Proactive When Seeking Opportunities
Opportunities to tender for government contracts now must get publicly advertised. These opportunities get shared via the Contracts Finder portal mentioned above. 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:
- Attend local information days or public meetings. These events will often be where authorities and other organizations discuss future projects.
- Register your interest in future procurements. There are lots of sites and portals designed for companies to do this.
- Sign up for email alerts on the Contracts Finder portal.
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.
Play to Your Strengths, and Be Realistic
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. You’re well-placed to be cheaper than big corporations and to be more flexible. Don’t shy away from highlighting these strengths by pretending to be larger than you are. That’s a common small business mistake.
Understand the Procurement Process
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’s going to get awarded, can you give your firm 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:
- Advertisement – An authority publishes the details of an upcoming tender. These details will include any eligibility criteria and what a firm must do to bid.
- Tendering & Selection – Businesses bid on the available contract. The relevant authority then assesses the various bids. This part of the process is where PQQs may come into play.
- Award – Each tender gets weighed according to various contract-specific criteria. The company that submitted the most viable bid becomes the preferred bidder. That firm gets sent a legally binding acceptance letter and then signs a formal contract.
Build an Accurate, Professional Bid
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 a selection of documents outlining your firm’s plan to fulfil the available contract. Things that you should feature in your tender include:
- A summary of your company’s track record in delivering the kind of service required.
- An explanation of your USP. What is the one solution that your company can offer that no one else can?
- The price you’re quoting to fulfil the contract. What pricing strategy have you adopted, and how does it represent value?
- A SWOT analysis to display the depth of your understanding of contract requirements.
- As much evidence as possible to back up all other elements of your bid.
You’re not likely to succeed with your very first public sector tender. It can happen, but more often, 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 ID 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.
SMEs & Public Sector Contracts – a Match Made in Heaven
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 our tips, you’ll be able to ID the right opportunities for your firm. You’ll also ensure that you can produce a tip-top bid. That’s what gives you the best chance of landing that transformative public sector contract.