Understand the process
Goal: Learn how to work within the public sector’s procurement process.
The UK public sector employs some 5.8 million people — around one-quarter of the UK workforce — in government, emergency services, the NHS, the military, and higher education.
But while private sector contracts are often won on price, public sector buyers will be more prescriptive. They will want to see evidence of specific competencies, quality of service or product, and compliance with health and safety and other industry standards, before even inviting you to tender.
“We are keen to use local resources, provided that they meet public sector standards,”says Glyn Evans, CIO at Birmingham City Council, the largest in the UK with a 3.5bn budget. But smaller or new businesses without a track record often struggle with heavily defined regulatory processes. Government buyers will create a framework agreement for suppliers. Those that successfully complete a pre-qualification questionnaire can be listed as approved suppliers to that department or organisation. The framework agreement process itself can be just as labour intensive — some organisations insist that bidders take out professional indemnity insurance cover; others need audited accounts for the previous two or three years, excluding newer firms. “Everything is marked and scored. Don’t be lulled into complacency by the fact that you have a good relationship with the buyer, or there is a nice vibe. Be aware that in the current climate, relationships are overruled by the discipline of procurement,”says Neil Malpas, operations director of Serco Consulting. Companies whose policies adhere to the buyer are more likely to succeed – and quality standards are valued. Tew Brothers, a Southampton-based building firm, strengthened its bidding position by achieving Investors in People status, a standard held by only six per cent of small building companies.
But when you win a contract, quality work leads to repeat business, and payment is usually on time.
The Devil’s in the Details
The marketplace is diverse and creative,says Serco’s Neil Malpas, so the details matter. Read and digest all of the tendering information and be explicit with your answers,as a scoring system is used to assess your application. Assessors won’ be able to pick out relevant points if your pitch has too much information. Use the requested format – some organisations insist on both electronic and hard copy submissions.Include relevant business experience and references and crucially, observe the tender deadlines or risk being disqualified. But “don’t submit a bid early. You can never do too much,” adds Malpas.
Know your customers
Goal: Learn how to tailor your bid to each buyer’s expectations.
No two public sector bodies are the same. They stick to the basic principles of procurement, but they have their own approaches to suppliers.
“We pitched for a contract with one local council, and won against a large national building company, yet when we pitched for a very similar contract with an adjoining council we came 10th,” says Donna Tew, director of Tew Brothers, which employs 60 people, and whose business is almost entirely public-sector based.
Find out how long the tendering process will take: they can vary from several days to over a year, depending on the buyer. “One particular Army contract that we were interested in would have taken two years. The costs to us were prohibitive, so we didn’t pursue it,” says Neil Morris, joint chief executive of consultancy Digital Public, which has a number of public sector customers.
A clear understanding of individual public sector customer requirements can allow small firms to outperform their larger competitors.
Form a Consortium
Goal: Join forces with other small bidders to create a virtual consultancy.
Small firms and independent consultants can improve their chances of a winning bid by joining forces with industry peers or complementary partners. Virtual consultancies are now a real contender for contracts. A primary consultant secures the business and writes the proposal, then brings in seven or eight suitable independent consultants for the job.
There are clear benefits to the buyer – fewer overheads mean more competitive pricing. But their real edge is their versatility. “Until recently, you might have avoided revealing your virtual status. Now, the consortium approach can be pitched as a benefit,” says Michael Herson, founder of The Strategy Works, who used the approach to win a contract with the Universities and Colleges Admissions Service.
Another option for small firms is to tap into the pitching power of larger suppliers by joining their supply chain. Previous obstacles to this approach – greater margin pressure and disproportionate delays in payment – should have improved as a result of the Glover Review. It recommended that larger businesses, which currently win the lion’s share of public sector work, should provide sub-contracting opportunities through a single online portal by next year.
Case Study
Rob Watling, founder of Nottingham-based consultancy Momentum Associates, has used the consortium approach to win contracts in the arts, heritage and health sectors.“Where a contract is too big or requires too broad a range of skills for one consultant, I can call on several independent associates who I’ve worked with before,” says Watling. He also uses online network Skillfair to access hundreds of management consultants around the country – a benefit in contracts where local cultural knowledge are needed. Watling is careful what he pitches for, but estimates he wins one in three bids. “We have certainly never lost a bid through being an ad hoc team.”Find the Work
Goal: Identify where bids are advertised – and how to get advance notice of contracts.
Public sector contracts are advertised in a variety of places. Those valued over the 100,000 threshold set by EU procurement law are published daily in the Official Journal of the European Union (OJEU) supplement and in Tenders Electronic Daily (TED) , the online version of OJEU. At Buying Solutions,the national procurement portal for UK public sector, suppliers can research current framework requirements, express an interest or, in some cases, tender direct, if the contract procedure allows.
There are also dedicated sector sites for suppliers – for example, Constructionline or NHS-specialist NHS PASA (Purchasing and Supply Agency)
Contracts below the EU procurement threshold can be found at www.supply2.gov.uk as well as in the trade and national press. This takes time smaller firms may not have. “You can spend an awful lot of time trawling the OJEU and the OGC websites, but the opportunities are not blindingly obvious, ” says Colin Craig, regional consulting director of IT consultancy Compass. So it is particularly useful for smaller bidders to cultivate good contacts. Get to know people in local authorities or other likely sources of public sector business, and you may get advance notice of contracts and frameworks.
Some organisations in the public sector may not advertise lower value contracts at all. “For contracts below the EU procurement threshold, but above our own, we might invite bids from three or four suppliers,” says Birmingham’s Evans. “Below this limit, we often work with suppliers with who we have established links and can demonstrate that their products or services represent value for money.” According to Neil Malpas, if the first time you see an opportunity is in print, you are almost certain not to win it.
Hot tip
Benchmark before you pitch– Put yourself in the position of the procurement client. If efficiency is one of the qualities, benchmark yourself first. Get ahead of the game by working out which other suppliers you would partner if asked and which one you wouldn't. Have procurement models ready.
Get feedback and prepare to bid again.
Goal: If at first you don’t succeed, find out why.
Win or lose, feedback on your bid from the buyer is crucial if you want to improve your future chances of success.
Even successful pitches will have some areas of weakness that can be improved on, or in the case of failure, flaws that can be avoided next time. Common errors include questions not being properly understood or answered in enough detail, missing documents, and submissions that could be presented in a better way.
Assuming the work is worth bidding for, you might find the cost of hiring a consultant to prepare the tender justified if the task is too onerous to be done properly in-house.
