by : jukka kujala | april 12, 2016
The UK’s public sector has become fertile territory for companies looking to tender for new business opportunities. Once the preserve of the big boys of industry, public tenders have recently been overhauled to give small to medium-sized enterprises (SMEs) a fighting chance of winning.
The prizes are huge. Around £15bn of public sector spending is expected to go to SMEs this year and the figure is set to grow. By 2020 the UK government’s stated aim is for one out of every three GBP spent on public sector contracts to go to SMEs. To make this happen they’ve made it easier to compete for public tenders by reducing turnover thresholds, simplifying paperwork and speeding up payments.
It’s an irresistible proposition which makes for intense competition as companies scramble for the business. Only the fittest will thrive in this tough environment. Understanding the public tender process is key to being up there among them.
Get ahead of the pack
Being ahead of the competition means not hanging around waiting for the public tender to be issued. By then the quarry will be long gone. The government is reaching out to persuade more companies to pitch for their business. Meet them halfway by being proactive in your hunt for the public tenders that fit your business.
The first step is to get advance notice of upcoming opportunities. Sign up for email alerts issued by sites like Oppex, where we list over 1.7 million public tenders a year. Many public sector authorities issue a prior information notice (PIN) listing the contracts they expect to issue tenders for in the next 12 months. Email alerts give you access to these as well as public tender notices inviting companies to submit expressions of interest.
Know the route
Once the opportunity has been identified you’ll be in a great position to register your interest and find out more about it. Information is power and it will give you a jump start on the competition. One of the things you want to know is what procurement procedure is going to be used for the public tender you’ve got your eye on.
- In an open procedure tenders have to be submitted by a certain date. They are all evaluated and the contract is awarded.
- The restricted procedure takes it a step further by asking potential suppliers to fill out a preliminary questionnaire (PQQ). Those who score well on this get an invitation to tender (ITT) and a winner is chosen from their bids.
- For more complex contracts a competitive dialogue procedure might be used. After an initial selection process those who are still in the race negotiate with the buyer to get an ITT. The chosen few submit their tenders and one of them gets the contract.
- Finally there is the negotiated procedure in which the buyer goes straight into contract negotiations with preferred suppliers. It takes an impressive track record to get on this list.
Choose your target
Liberalisation of the tendering rules might have given SMEs more opportunities to go for but that doesn’t mean they should be any less selective. The rule about going for the few you can win over the many you believe you can do still applies.
For companies new to public sector work the official advice is to start small and go for public tenders worth less than £100,000. At this level you no longer need to submit time-consuming PQQs so it is possible to tender cost-effectively while building your government customer base.
The rules also make it easier for companies to go for bigger contracts. In the past turnover had to be over three times higher than the contract value. Now any company with a turnover of double the value is in with a chance. Even the biggest contracts are increasingly being broken down into smaller, manageable lots for SMEs to take on, either alone or jointly with other suppliers…[Read More]