The winning bid: A small business guide to public sector tenders
With the government promising to spend £1 in every £3 on small firms, read this guide to find out how to bid for and win public sector tenders...
Assuming the government meets its latest target, smaller businesses are in arguably the best position ever to win new business from the public sector. Having achieved their target of spending 25% with small businesses, the government’s latest commitment is to spend £1 in every £3 on SMEs – an additional £3bn in spend.
In this guide we cover the important steps to take in order to ensure you are submitting competitive bids and – as a result – are winning more tenders.
There’s never been a better time
Close to £15bn is expected to be spent on small businesses in the next year, with thousands of contracts available covering everything from building works, to website design and cleaning schools’ windows!
Whilst a tantalising figure, with cashflow so important for smaller businesses, it’s also worth noting the new rule set for 30 day payment terms, which includes suppliers and sub-contractors.
To help speed up the process and encourage more small businesses to bid for government work, earlier this year a major step was taken in abolishing Pre Qualification Questionnaires for low value (under £100,000) contracts.
Whilst this reduces the effort in applying for contracts, improving accessibility will ultimately increase competition. Undoubtedly then, small businesses still need to ensure they tick all the boxes and demonstrate they stand out from the crowd if they’re going to win tenders.
Finding tender opportunities
A quick Google search on tenders will show there are many commercial companies that amalgamate contract opportunities from many sources for a small fee. You can however go directly to the government ran Contracts Finder to find upcoming and previously awarded public sector contracts valued above £10,000 in central government and above £25,000 in the wider public sector.
For lower value contracts, approach Local Authorities who will often advertise opportunities in different ways. Depending on certain criteria, higher value opportunities – over £100,000 – must be available to view at a European level. Buying authorities upload these to the Official Journal of the European Union which are then displayed on Tenders Electronic Daily for organisations to search.
Fail to prepare, prepare to fail
Whilst many bemoan the depersonalised process of bidding for public sector contracts, the recommendation is to still adopt a traditional approach – pick up the phone and get in front of people.
Don’t be afraid to call your Local Authority to find out more information on renewal of contracts; whilst it may take some time to find the right person, it’s then a chance to explain what value you could bring in the future.
This important step in raising your visibility is particularly important given most councils operate an approved suppliers list, who will often get first look at new contracts. Quite simply, you need to put yourself in the shop window.
With the mounting pressure from government to use small businesses, many Local Authorities and Chambers of Commerce run events covering procurement processes and previews of upcoming work. Not only can you get a better understanding of what the buyers are looking for and where they publish tenders, it’s your opportunity to make a memorable first impression and begin dialogue for influencing how future contracts are set out.
Firms also now have a contact in central government, with each department now having a small firms champion to talk to. By finding out about their policies and goals, you will be able to fine tune your approach when preparing your bid.
Play to your strengths
Don’t be tempted to chase a big opportunity that isn’t a perfect match for what you do. Instead, focus on the smaller, more local opportunities so you can build a strong portfolio of work.
Every single question in the tender needs to be answered well, so if you are struggling, it could be a sign that this opportunity isn’t one for you. Remember, the bid is about the client, not you! Don’t get in the habit of cutting and pasting template responses as you should be talking about the buyer more than your business.
Evidence shows strength in depth, and indeed becomes a stricter requirement as the values of contracts go up. Recent related work in the form of case studies, testimonials and references come into play here, as do accreditations and awards.
A common mistake is to focus on features (what you do) rather than the benefit (how it helps the buyer). Don’t expect benefits to be self explanatory, whether it saves time, money or some other tangible benefit, ensure it’s there!
Don’t underestimate the little things either; silly mistakes, a missing signature or failing to send printed proposals by recorded delivery can undermine weeks of work. If you don’t meet all of the requirements set out, you fail. It’s unfortunately as simple as that.
Learning from the losses
It’s never fun to lose out, but bear in mind a win ratio of 1 in 3 is considered good. This only reiterates that you should only go for tenders that are really suited to your business and attention to detail is vital – don’t be the person who gets a 40-page bid rejected because there were spelling mistakes!
If you do get the bad news, you should get feedback on why you missed out. If not, certainly follow it up and find out who did win the contract to see if there is anything to be learned from them.
Getting expert help
There are consultants who specialise in helping businesses prepare bids. With experience of scoring methodologies and knowledge of buyers, a consultant may help shed more light on how you can improve your success rate.
If you could do with guidance but finances are strained, the government-backed Business Growth Service is a good start; and match funding through the Growth Accelerator is available to help build a successful growth strategy, which can include assistance in writing bids or gaining necessary accreditations (e.g. ISO 9001) required in tenders.
The British Assessment Bureau helps small businesses to stand out in tenders with certification to ISO standards. Visit their website to out more about how certification can improve your competitiveness.