Myths of Public Sector Procurement v the Reality
You want to grow your business but you’re one of many, possibly in a saturated market. Have you thought about selling to the public sector?
Yes, you’ve considered it but one (or more) of the following apply:
· “My company is too small to win a public sector contract”
· “I don’t know where to begin”
· “Contracts always go to the same suppliers”
In this article we are tackling some of the myths around winning public sector contracts and the reality of this. We will show you that it is achievable for you to sell to the public sector.
Myth 1
The public sector only wants to buy from bigger businesses, not SMEs and definitely not solo businesses.
The reality
The government has changed the way it buys goods and services in order to help SMEs and solo business owners to bid for more contracts.
Some of these changes:
1. The public sector must pay supplier valid invoices within 30 days or less. In fact in 2017/18 in Scotland the public sector paid over 99% of invoices within 10 working days.
2. A simpler application process has been established. This includes the selection questionnaire (in England) and ESPD (in Scotland) being abolished for contracts below EU thresholds.
3. Large contracts can be split into smaller lots to create even more opportunities.
4. Increased use of frameworks.
5. In Scotland public bodies are required to advertise all opportunities on the Public Contracts Scotland web portal. This makes it easier for SMEs to find contracts.
Top Tip
Before committing to tendering, its useful to fully understand what your business is capable of providing.
Questions to ask (and answer)
What are your strengths?
What are your weaknesses?
How can you fill those gaps?
What is your overall business strategy?
Once you understand your strategy you can properly assess opportunities for selling to the public sector.
Myth 2
The lowest price will always win a contract.
The reality
Price cannot be the sole reason for awarding a contract. Instead most bids are awarded to the Most Economically Advantageous Tender (MEAT) which takes account of both the price and quality. The percentages of each will be outlined within the Evaluation Section of the tender.
Top Tips
Make sure you understand the evaluation criteria – if you do not make sure you ask questions about this (see myth 4).
Think about where you can add real value to the buyer’s specification.
What is important to the buyer?
Good business intelligence allows you to better understand the market and in turn pinpoint opportunities.
The key thing to consider is what will add value for the buyer?
Myth 3
Contracts always go to the same suppliers
The reality
Whilst an existing (or incumbent) provider should have a good chance of retaining their contract, authorities do not always award to existing contractors.
Public procurement is a transparent system with a robust audit trail.
Top Tip
Don’t just look for notices buying your goods or services – look for other opportunities where you can seek business. This could be by supplying those who win contracts.
Myth 4
You cannot contact/engage with buyers during the procurement process.
The reality
You can contact the buyer and in fact have the right to formally contact the buyer in order to fully understand the contract.
During the procurement process there will be a way in which you can ask questions. Normally this is through the portal where the notice is being administered but can sometimes be by email. The tender documentation should tell you how to raise queries. Clarification will be anonymised and shared with all interested parties.
You can ask:
Scope of the contract
How the tender will be scored
Confirm the tender procedure
What the value of the contract is over the full contract life cycle.
And more.
Top Tip
Make use of the clarification function. Ensure you ask questions prior to the deadline. Review the questions being asked by others.
Myth 5
Once you’ve completed one tender, you can cut and paste the content for future bids
The reality
Every tender submission is not the same.
You need to think about what the buyer is looking for, what could they benefit from that is not detailed within the contract notice.
Even when a question looks identical it could be the specification (what the buyer is looking for) differs from your previous submission.
There may be information within previous submissions that you can use in future submissions but never lift a response and paste it into a new opportunity. Review the tender documentation and consider what you can offer in response.
Remember….
The government is focused on increasing opportunities for SMEs
Price is not the only factor considered when awarding a contract
Contracts are not always awarded to the same suppliers, they will go to the best supplier
You should engage with buyers as early in the process as possible. This will help you to understand what the buyer is looking for and how you can deliver it.
You cannot cut and paste previous responses. Each response should meet the requirements of the buyer.
Overall the government (and therefore the public sector) wants to buy from small and medium sized enterprises (SMEs). The public sector has changed the way they buy goods and services to make it easier for SMEs bid for public sector contracts. These include:
Simpler application processes
Supplier will be paid in 30 days. Valid invoices paid in 30 days or less.
By 2022, the government plans that one third of its spend on goods and services will be with SMEs, either directly or indirectly or through the supply chain.
Now you know it is achievable for you to win public sector contracts. Contact us to arrange a procurement strategy session and understand the next steps for you to take.