How do you get a slice of the £175bn worth of work available
through public sector contracts?
It's not easy. Only one in five public sector contracts go to small and medium sized businesses. A report on procurement from the All-Party Parliamentary Small Business Group (APPSBG) released in April found small businesses are disadvantaged over larger competitors, despite improvements to procedures. In fact, there's been a decline in public sector contracts awarded to small businesses over the last two years.
The government sticks to its pay-on-time promise so it can drive a harder bargain than a private client who may pay more, but won't necessarily pay on time
The tendering process is notoriously complex, time-consuming and
bureaucratic, despite government pledges to make it more
straightforward and more accessible. Small businesses are put off
by all the paperwork involved in tendering or fear they'll get
blown out the water by larger competitors.
Winning public sector work is possible, and its rewards rich. But you need to know what to expect, how to overcome obstacles, and the insider advice that will get your bid noticed.
Public sector contracts offer some lucrative awards -
particularly at times like this.
"They give you stability," says Gary Lawton, who heads up public sector practise at interim management provider Russam GMS. "You get long-term agreements of three or four years at a time and the money is budgeted year-on-year."
And the money will definitely be there, most likely on time. Lawton says the majority of his public sector clients pay within 10 days. Robert Rush is managing director of PFA Research Ltd, a small market research firm that's been working in the public sector for 18 years. He thinks it's a 'myth' government is slow to pay. His public sector work is paid for within 30 days. In fact, our insider at the government's Central Office of Information says timely government payment is a key negotiation tool - the government sticks to its pay-on-time promise so it can drive a harder bargain than a private client who may pay more, but won't necessarily pay on time.
For many small businesses, the public sector can often also offer much bigger contracts than private clients. "We're in a busy field and we cannot live on scraps," says Rush. "We need a handful of those larger contracts every year to live on."
If you want a shot at winning public sector work, you're going
to need to know where to look.
Signing up to a tender tracking system is invaluable, and by far the easiest way of finding contracts. You get daily or weekly updates of all contracts that fit the criteria you've prescribed, saving you an immeasurable amount of time. Try www.supply2.gov.uk, Business Link, Euro Info Centres or a commercial service such as www.tendermatch.co.uk.
If you want to search online as well, look at www.supply2.gov.uk for contracts less than £100,000on average), or the intimidating but more comprehensive Tenders Electronic Daily (TED), which is the online version of the Official Journal of the European Union, listing almost all contracts. www.competefor.com handles Olympics 2012 contracts and ConstructionLine is aimed at construction contracts. Individual government departments may list work they have to offer, and keep your eye out when reading trade press too.
Once you've found a contract to tender for, you often (but not
always) have to go through a pre-qualification stage before finding
out if you're even eligible to bid. The pre-qualification
questionnaire (PQQ) asks for financial information, previous
experiences and references, and often takes the best part of a day
"And you have no idea what your success is going to be based on, or who you're up against. You're working in the dark," explains Heather Baker, who's tried her hand at the procurement process on numerous occasions on behalf of the company she previously worked for. "Some of the recent ones I've seen don't even specify a budget."
Government literature encourages you to ask the buyer for advice if you're unclear about criteria, but both Rush and Baker found they could only make contact by email. Even then there were problems. "When I asked some questions and for more information about project, they sent the answers in an email to everyone who was tendering, because they have to be seen to be neutral," explains Baker.
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