Business management

How SMEs can break into public-sector work

Contracts with local and central government and other public bodies can bring long-term, lucrative benefits. Here, we explain how to win them.

They are missing out on clients who normally pay on time, don’t tend to chop and change who they work with as much as private ones and often put social value, such as using a local company, before price.

“Working with them helps build your profile and reputation, too,” says Anthony Caddy, Director of South Wales-based firm Highland Services, which does mechanical and electrical work for organisations including prisons, schools and Swansea Council.

So how can you find local authority, national government and other public-service contracts, and what are the best tactics for securing them?

Unearthing big opportunities

The vast majority of local and national government contracts over £10,000 are advertised on one of four portals. In England, companies can refer to Contracts Finder; Scottish firms should use Public Contracts Scotland; in Wales, it’s Sell2Wales; and in Northern Ireland it’s eSourcing NI. And for contracts worth over £118,000, visit this GOV.UK site.

“You can search the portals by keyword and it is remarkably easy to find things,” says Mark Frost, MD of bid-management consultants, Tenders-UK, which advises firms on applying for contracts.

The Department for Education has its own portal, the Bluelight eTendering site is used by emergency services, and a simple web search will find portals used by other authorities and services.

Signing up for email alerts about new contracts can help you steal a march on your rivals. The portals also feature future projects, allowing you to see what work might be available soon so that you can plan ahead when investing in equipment, staff and training.

We helped a South African-owned company with no experience of UK public-sector work win the contract to clean the Houses of Parliament, largely because of the way we filled out the bidding forms

Mark Frost
Managing Director, Tenders-UK

Starting small

If you want to build up your public-sector experience gradually, contracts worth less than £10,000 can be a good option. However, finding them is a little ad hoc. It often relies on monitoring local papers, advertisements and networking, including meeting up with local officials.

“Let them know what your company is currently offering other sites,” says Terry Havenhand, whose company AT Services carries out plumbing and boiler maintenance for Leicester City Council.

SMEs can also make public-sector bodies aware of their goods and services and find out about lower-value opportunities through the government’s eMarketplace website.

Think before you bid

Applying for a public-sector contract can be a time-consuming process, so make sure you first fully investigate what will be expected of you and whether you can turn a good profit.

You can use portals to find out how much existing or previous contracts for the job were and who won them. Search for online reports of problems they or the council encountered so you can make it clear how you’d do things differently in your bid.

“If the current supplier is on a contract that’s been extended, suggesting the buyer is happy with them, think ‘how are we going to be faster or cheaper?’” says Frost.

Competing with the big boys

It can be difficult for SMEs to bid against large companies with huge resources. You have to be realistic about whether you can offer something better. But, says Christian Rowe, of tender specialists Executive Compass, it’s fine to talk in your bid about new equipment and systems you will have available for a project, even if you don’t have them yet.

“Try aiming for contracts where you are a niche service,” adds James Ball of Marr Procurement, which advises SMEs on a range of issues, including bidding.

Knowing the process

The bidding procedure for most contracts above £10,000 is largely done through a series of forms and questionnaires and is generally fair and transparent. You are assigned a score for your answers, which is more important than just price in deciding if you are successful.

“We helped a South African-owned company with no experience of UK public-sector work win the contract to clean the Houses of Parliament, largely because of the way we filled out the bidding forms,” says Mark Frost.

Before writing anything, it’s important to make sure you answer precisely the questions you are being asked, such as: What will be your strategy for managing subcontractors on this project? Don’t just give general information about how you normally operate.

Back up any claims you make about your company’s successes with evidence, such as performance statistics or case studies. List contracts involving similar work you’re doing. Detail your staff’s expertise and any accreditations you have.

Think social

Many central-government contracts contain a section on social value, so highlight factors like how many local people you employ, your apprentice schemes or community work. Other public-sector organisations put a high priority on social value, too. This is likely to be increased under the new Procurement Bill, due later this year, which is also proposing a simplification of public-sector procurement processes to encourage SME bids.

The Scottish public sector, along with many other local authorities, is particularly focused on net-zero commitments, says Mark Frost. Detailing anything you can do, above and beyond the contract specifications, that will help a body reach its overarching goals is likely to be well received.

Make submissions a pleasure to read

Write in a clear, structured way. Don’t assume too much technical knowledge or resort to jargon. Use positive language, such as “we will”, rather than “we could”. Make sure your documentation is well-laid-out and looks professional, adds Michael Lee of Professional Bid Services at BWL Consulting.

If you don’t have experienced bid writers in your company, it may well be worth getting help from a professional firm. “We learned that the hard way, losing a £1m contract we’d had for 20 years to a multinational with a bid-writing department,” adds Anthony Caddy.

Bid management firms can also help you look for and determine your eligibility for contracts, too. Local authorities and business groups may also offer free advice.

Cheap doesn’t always mean good

Make your pricing competitive but pragmatic, rather than going for a very low, profit-squeezing figure. Public-sector bodies usually favour realistic estimates.

Be interview-ready

ou might be invited to talk to buyers about your bid, perhaps through a site visit or presentation. Make sure you are well-prepared, with an in-depth knowledge of your proposal and supporting evidence.

With these tips in mind, good luck. And it’s worth remembering, the government wants 33% of its procurement spend to go on small businesses by 2022.

Make sure your business is ready for any new opportunities by accessing our Futurefit series.

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