A small business guide to public sector tenders

On average, the government spends £300bn a year on goods and services contracts sourced from suppliers as part of public sector tenders – read our guide to learn what public sector tendering is, the application process, and tips to help you be successful in bidding for a public sector contract.

The government recognises that businesses can significantly benefit from public sector contracts and as such spent a third of all public expenditure on buying in goods and services from outside government every year.

What is public sector tendering?

When the government or any other public sector institution (such as the NHS, police and fire services, schools, or universities) needs to purchase products or services, the public body typically publishes a contract notice, inviting outside organisations to bid for the contract.

This is known as an open tender.

Landing public sector contracts come with numerous benefits for suppliers, including:

• helping stabilise a business’s cash flow and increase revenue
• guaranteeing reliable contracts
• public sector organisations must adhere to strict guidelines involving transparency and equality
• public sector organisations are legally required to pay clients within 30 days of an invoice
• can give a business more prestige in its respected industries.

How does public sector tendering work?

Bidding on a public sector tendering opportunity may initially seem complicated, but it is usually straightforward.

The steps are:

• advertisements for public sector contracts are listed online, links for these are in the next section. Each contract opportunity notice gives the name of the contracting authority, a description of the requirement, duration, and anticipated values of the opportunity and the terms of the agreement. This will also contain a link to the prospective organisation’s e-tendering platform (for example Delta, Atamis, Bravo etc) which will require registration
• As part of the process prospective businesses may be asked to complete a pre-qualification questionnaire (PQQ) as part of an initial stage. This step can be used to shortlist suppliers and aims to assess the suitability of a potential company by reviewing its financial and economic standing, technical and professional ability, and other project specific criteria
• The next stage, or initial stage where a PQQ does not take place, will be the invitation to tender stage. Here the business will be asked to produce a detailed document responding to the questions raised within the tender pack. This may entail, for example, how they are going to meet the requirements of the client’s contract successfully
• once submitted, each response is evaluated before a decision is made; all responding organisations will receive written confirmation whether they’ve been successful or not and feedback will be included to highlight areas for improvement
• dependant on the value of the contract, there may be a legally required standstill period that lasts for ten calendar days, allowing unsuccessful candidates to challenge the decision where they feel that the authority did not meet the requirements of the Public Contracts Regulations 2015. Once the standstill period is successfully concluded, the contract with the successful applicant is progressed to signature.

Where to find public tendering opportunities

To find a contract, companies can register their business (free of charge) on the following:

• England – Contracts Finder and Find a Tender Service (for high value contracts)
• Scotland – Public Contracts Scotland
• Wales – Sell 2 Wales
• Northern Ireland – eSourcing NI and eTenders NI

Ensure notifications are enabled, so you don’t miss out on potential advertisements.

In addition to individual contracts there are numerous public sector framework providers that suppliers can join from where organisations can ‘call off’ contracts following a mini competition procedure.

This includes, but is not limited to,

• Crown Commercial Services (CCS)
• ESPO
• NEPO
• NHS Shared Business Services

Are these opportunities only for major contracts?

Public sector industries produce tenders for various contracts ranging from multi-million-pound contracts to much lower-value contracts, typically advertised when above £10,000 or £25,000, dependant on the thresholds required for each individual Contracting Authority.

Tips for getting started with public sector tenders

If you’re interested in bidding for a public sector contract, there are a few things you need to consider when responding to the tender.

Outline pricing strategy

A misconception in tender proposals is that cheaper bids are more likely to be selected.

This isn’t exactly true; clients who demonstrate the best value for money are the likelier candidates, this is measured across the criteria the Contracting Authority has set and the weighting that they have applied for each question.

Consider creating a breakdown of estimated costs at each project stage, explaining how you’ve arrived at your total.

Refer everything back to the client

Understand what a client is looking for and answer all their questions about how your company (and only your company) can deliver on their expectations, making sure that the response meets the criteria set and that you do not cross-refer between questions.

When you refer to your company’s skills and experience, link it back to how it would benefit this client and meet the goals of their specific project.

Include a SWOT analysis

Where permissible in line with the tender instructions, produce a SWOT (strengths, weaknesses, opportunities, and threats) analysis or risk register entailing a brief overview of potential issues to be aware of and opportunities to take advantage of.

This shows the clients that you are meticulous in your planning.

It can enable you to manage the client’s expectations, too.

Introduce the team

Introduce your key team members and show how they will work together on the project.

Where requested in the tender response, you can provide short biographies or include their CVs in the bid, but make sure to reference how their skills and expertise can benefit the prospective client.

Seek outside help

Consider hiring an external source with sufficient experience with tender applications to review your document.

This can help to ensure that nothing significant has been missed.

Read our guide on outsourcing for smaller businesses.

Utilise the feedback

If you are unsuccessful this time round, examine the award decision notice and the feedback provided, which outlines why you were unsuccessful and should you need further detail request specific feedback to find out what areas you could have improved or expanded on.

View this as constructive, as it may give you an advantage next time you bid.