Little fish in a bid pond? How SMEs can break into public sector procurement.
Posted by Gemma Waring on May 27, 2015
A lot of potential suppliers to the public sector are put off by the amount of work it takes to become tender ready and what seems to be a chicken and egg situation where you need references to pass the PQQ (selection) stage but can’t get references until you win a contract!
The changes to the procurement regulations this year have made in roads to this situation with the abolition of PQQs for below threshold contracts and the removal of the burden of proof for above threshold contracts but there are a number of steps SMEs (and all organisations new to public sector tendering) can take to get a foot in the door and start supplying to the public sector.
- Have a clear strategy.
Winning a tender can provide you with 3-5 years of stable income to it is really important that you put as much time and effort into developing a tendering strategy as you would a sales and marketing strategy. Scattergun tendering (applying for everything and hoping to win something) is akin to throwing 10,000 marketing leaflet out your office window and hoping someone passing by is interested enough to pick one up. It wastes a lot of time and money, whereas if you ask yourself the basic questions such as: What do we want to provide?, Where do we want to work?, Who do we want to work for? What financial envelope do we require? You will find that instantly you can narrow your field and work on applying for fewer tenders that you are then more likely to win.
- Talk to the buyer- put yourself in their shoes
Before the tender is released you can contact the buyer directly and speak to them about your products/services and ask them questions about the up coming tender. This will help you understand their requirements and after all selling is about understanding the needs and issues of the potential customer and providing the best solution for them. If you don’t know what their needs and issues are you won’t be able to provide a tailored response in your tender which is what buyers are looking for. Pick up the phone. Ask them questions. Get ahead of your competition.
- Lower value opportunities
If you find that the larger contracts remain out of reach for reasons you can’t rectify (for example if you lack the required turn over or don’t have previous experience to provide references) then why not look at lower value opportunities? These contracts are not subject to the full regulations and are now not allowed to have a PQQ so are a great entry point for potential bidders who perhaps feel a little overwhelmed with all the work required to be tender ready. If you are a Tenders Direct customer you will be pleased to know that we already pick up all of these opportunities – if you want to find out more contact our customer service team on 01224 636 999.
- Join a supply chain
Similar to the lower value contracts, joining the supply chain of a big hitter in your industry could give you your first step into working for the public sector and help you gain that all important experience to be able to tender in your own right. The best way to find out who is winning contracts in your area is to search for Contract Award Notices and see who has been successful.
- Be prepared
Make sure you know what you need in place to successfully tender into the public sector – this can mean developing new policies and processes in your organisation and keeping up to date documentation to evidence your activities. Our Training and Consultancy department have developed a ‘Tender Readiness Checklist’ as a free resource for suppliers – it covers all the main areas of information you will need to have ready to tender into the public sector and an explanation about what you need to have ready and why. If you would like to receive a free copy just email us at email@example.com
- Know how to write a bid
Sounds like a pretty basic one but over the years we have seen a variety of bid responses that fall short of the mark – from one or two word answers up to over descriptive waffly answers that take up far too much room on the document (and everything in between). Bid writing is a craft which some people dedicate their whole careers too so you need to make sure you are able to compete with the best. You could do this by attending a training course or by getting coaching support from a consultant but if you don’t have the time or the resources for this you need to just remember a few basic rules. Read the specification, read the question and write a (tailored) response that both answers the question fully and responds to any key points in the specification. Simple? You would be surprised how hard it can be in practice!
- Get feedback
There is a tendency to rush from one failed bid on to the next with the hope of a win next time but it really pays to sit back and ask why. The buyers do have an obligation to provide you with feedback at the PQQ stage so don’t be afraid to ask for it and use it to make your bid stronger next time. It’s just the same as if you are unsuccessful at a job interview, knowing what you did wrong or sometimes what the other candidate did better can give you the information you need to be successful next time. Whether you get buyer feedback or not it is also a good idea to just ask yourself what you could have done better – get someone outside of the bid process to read your responses and give you feedback on them. If they don’t hit the mark for a lay person they certainly aren’t going to convince a buyer to choose you as a supplier.
- Be realistic
Above all else be realistic – in setting you strategy and implementing it, when getting ready to bid and in writing the bids themselves. If you try and win too big too quickly it’s unlikely you will succeed and you will waste valuable time and resources in the process. Similarly if you don’t meet the basic requirements or can’t fulfil every element of the specification you need to make an honest call on if it is worth bidding for. We hear ‘I’ll give it a go and see what happens’ quite a lot and are yet to see it result in a successful bid.
We hope that has helped potential suppliers to the public sector feel enthusiastic about getting involved. With £714bn being spent by the public sector in 2014 and 26% of it going to SMEs it’s a lucrative market to get involved in!
For any further information about training or consultancy to help you get involved in public sector tendering email firstname.lastname@example.org or call us on 0844 561 0675.