Tendering for small businesses was once a fairly niche affair, but the government has been boosting spending on small business contracts significantly since 2014.
From 2013 to 2015, the government spent an unprecedented £11.4bn on tendering from small businesses, defined as businesses with fewer than 250 employees. The government target of spending 25% of all central government contracts with smaller businesses has been met, and they now intend to increase this to £1 in every £3 spent.
Other steps have been taken to help ensure the involvement of more small businesses in public sector tendering, such as changes to the Prompt Payment Code that should see small businesses receive a guaranteed payment for public sector tender in 30-days. The government also removed the Pre Qualification Questionnaires for some procurements that formerly applied to low-value contracts of under £100,000.
This commitment to the involvement of small businesses in public sector tendering has unleashed a raft of new opportunities for small businesses. There are numerous advantages to tendering on both the buyer and provider side, such as transparent, reliable business that can be sustained over several years in some cases. As such, there’s never been a better time for small businesses to get involved in tendering.
Here is some tendering advice and public tender tips for small businesses:
1: Understand the Role of Social Value
The Social Value Act or Public Services (Social Value) Act 2012 places obligations on public sector organisations including the NHS, central government and Local Authorities to factor in the social value of their commissioning. Social value includes:
- Benefiting the local economy
- Local employment opportunities
- Environmental responsibility and sustainability
- Working with the local community
Since public sector organisations have to look at social value when tendering contracts, businesses have to integrate it into their bids. The government is realising the ability of smaller businesses to make their own localist impacts, so this is where small businesses should focus their social value efforts. Some ideas might be providing mentorship and learning with disadvantaged groups, or work experience, or building a plan for carrying out the business in the most sustainable and environmentally responsible way possible.
2: Company Literature and Compliance
It’s necessary to demonstrate the company’s compliance and operational efficiency. Since competition can be high when tendering for public sector contracts, particularly in busier towns and cities, businesses will need to be au-fait with their compliance and regulatory responsibilities.
One example is health and safety - you may need to include a rigorous health and safety policy and evaluation of what will be needed to carry out the work efficiently. Since the tendering processes request all necessary information from businesses, you’ll know broadly what you need to include, but ensuring that any relevant portfolios, case studies and supporting literature are in order can help you stand out from the crowd.
3: Research the Buyer
Researching the buyer is crucial, not just in terms of what they’re asking clients or sellers to provide, but in terms of their longer-term goals. For example, the buyer might be a Local Authority, aka a council. This provides an opportunity for research - what are the council’s short-term, mid-term and long-term aims? Some examples might be sustainability, waste management and environmental commitments, or the regeneration of a particular district or area.
Demonstrating a wealth of knowledge about the buyer’s needs and the local area is always advantageous for public sector tenders. The local environment and social landscape is crucial to building social value credibility.
4: Focus on Benefits
Tender bid advice for public contracts involves plenty of business marketing. Part of the marketing process is focussing on what benefits you can offer the customer in addition to providing the services or works they provide. This isn’t a cross-selling opportunity, it’s an opportunity to demonstrate how you can enhance and enrich the experience.
For example, do you operate an electric fleet of vehicles that can benefit the customer’s emissions targets? Do you participate in a sustainable waste management scheme or use sustainable or environmentally friendly equipment and products? Demonstrate the extra benefits that might differentiate your business from others.
5: Don’t Overlook the Details
Demonstrating attention to detail with regards to submitting proposals with the correct supporting literature and on time is crucial to display professionalism. The customer will pick one of the most professional outfits for the job, someone who is operationally efficient, compliant and able to engage in due diligence, organised and professional. Some of the best tender writing advice is to provide thick and accurate detail but only when it is necessary to do so, rather like a CV than an essay.
Check all communication thoroughly and leave no stone unturned with providing adequate detail in supporting literature. Thoroughly proofread and edit all correspondence.
6: Look For Contracts in the Right Places
It goes without saying that businesses need to know where to find contracts. The government’s Contract Finder tool is the first port-of-call and should provide the vast majority of contracts in an easy-to-read format. It’s also simple to search the database by postcode or region. The Tenders Electronic Daily, which is part of the Official Journal of the European Union (OJEU) can be used to find higher-value opportunities (over £100,000).
Local Authorities also advertise opportunities directly on their website. There’s certainly no harm in picking up the phone and getting hold of someone at the council who can forward some opportunities to you. It’s part of the networking process and is relevant particularly to the very smallest contracts available.
Summary: Tendering Advice for Small Businesses
There are more tendering opportunities for small businesses now than ever and many are surprised to find out what’s available in their local area. As the government commits to further spending on SMEs and SMBs, the competition is also likely to grow.
Tendering is an alien concept to many small businesses but it isn’t rocket science either, even if there are certain conditions to be met. By taking a considered, analytical approach to tendering, i.e. by researching the needs of the customer and how these relate to social value in local settings, businesses have the best chance of standing out from the ‘big boys’ and similarly sized competition.