The public sector is opening up to SMEs in ways it hasn’t before and this is largely thanks to the new Procurement Act 2023. Among other things, the Act specifically aims to include more SMEs in public sector procurement. Given that 99% of all businesses in the UK are SMEs and they employ 16.3 million people in the UK, it feels like the focus is overdue.
It’s now up to SMEs to grab these new contract opportunities with both hands and run.
We’re going to look at how SMEs can do precisely that – leverage public sector contracts and watch as their businesses flourish.
Why Should SMEs Want To Compete In The Public Sector?
It’s a good question and the answer is simple: There’s money to be made.
There’s more to it than that, of course, but the ultimate result is always the same: more money – more profit – more growth – more money. Local and central economic growth are happy side effects.
So, why should small businesses jump at public contract opportunities?
Long-Term Stability
Some government contracts last for four years, eight if an extension is granted. That’s four years of (relatively) stress-free income during which you can refine your business operations, develop new skills, and improve your products/services through ongoing innovation.
All of this makes an excellent impression on government bodies, making them more likely to choose your business again when the opportunity arises.
And there you have it, another reason to compete in the public sector: Repeat business.
Rocketing Reputation
Repeat business from a particular department is great and all, but you might want to spread your wings. Regularly exceeding expectations or providing additional value beyond contract requirements is a great way to build your reputation as a reliable supplier of high-quality goods/services.
This generates demand which gives you a significant competitive edge when you bid on other contracts.
Prompt Payment
It’s not unusual for private sector buyers to wait until the very last minute to pay invoices. This can result in a cash flow crisis. At the very least, you might have some sleepless nights.
You don’t have this worry in the public sector, where the Procurement Act stipulates all invoices are to be paid in full within 30 days of signing the contract. There’s no cash flow stress and you immediately have the funds needed to get cracking on service/product delivery.
How Can SMEs Flourish In The Public Sector?
The crux of the matter. Tips to increase growth and revenue.
Use Free Training And Support Services
The Crown Commercial Service (CCS) provides resources to help suppliers and contracting authorities familiarise themselves with the Act and all it entails. Resources include tips to write effective tenders and guidance on how the new public procurement process works and how they can be leveraged to your advantage.
CCS advisors are available to provide essential support and guidance on frameworks, pipelines, and resources.
Fully Understand The Procurement Process
The best way to exploit all the advantages available is to fully understand every aspect of the procurement process, especially assessment criteria and legal requirements (including regulatory compliance).
You must understand the different types of contracts available (open or restricted) and the routes to market (framework agreements and dynamic purchasing systems).
This enables you to determine which processes best suit your business and play to your strengths.
Develop A Bid / Create A Bid Template
You must know how to draft an effective bid, including its structure, format, and the content required. Include your strengths and capabilities, experience, qualifications, accreditations, and what sets you apart from all the other bidders (your value).
Use your draft to create a template, which you can store on tender alert platforms like S2G (Supply2Gov). The foundation is there for each bid, you just have to tweak it for each tender submission. Get this right and you’ll save aeons of time that you can use to improve your business offerings or boost your marketing strategies.
Form Partnerships Or A Consortium
Some small businesses are perfectly happy bidding on small contracts or lots to keep business ticking over and nurture healthy profit levels. Others want to aim higher. But, most large tender opportunities are out of reach. Fortunately there is a solution.
SMEs that provide related services can band together to form a consortium which enables them to bid as a single body on large contracts.
Piggy Back On Larger Organisations
Prime suppliers typically bid on large contracts and then subcontract to SMEs with specialised or niche skills or services. Partnering with a Prime company is a great way to learn the ropes and the tricks of the trade with very low risk.
Deliver outstanding value and build relationships with other Primes in your industry.
This is a perfectly good way to enjoy reliable and sustainable work, but you might want more. In this case, when you feel confident enough, you can take everything you’ve learnt and use it as a launching pad to establish your brand as a super solo supplier.
Use Bidtech
Bidtech is a term that refers to contract alert platforms, like the government’s central digital platform, Contracts Finder, and S2G’s tender alert service. By setting up alerts tailored to your skills, services, and products you never miss contract opportunities that are right up your alley.
Another major benefit of bidtech is that suppliers only need to register their details once. They are stored in the system and you can incorporate them in every bid you submit.
Go Local
The truly big, probably impossible contracts are all at the central government level, but SMEs needn’t venture into those waters. Instead, there are plenty of contract opportunities at the local government level that are perfect for SMEs.
There are many benefits to working locally. One is to incorporate social value into your bid submission that enables you to assist, support, or start an initiative that is dear to your heart.
Challenges And Solutions
No one is saying that getting a toehold into public procurement is a breeze. There are challenges that SMEs must overcome before they enjoy consistent success.
Fortunately, many of the solutions are relatively simple and most of them can be provided by S2G.
Challenges And Their Solutions
Here are three of the biggest challenges small businesses face and their accompanying S2G solutions.
1) Complex bidding process
SMEs new to government tenders and contracts are often intimidated by the complexity of the tendering process. Complex contracts are actually one of the main reasons SMEs avoid public procurement.
S2G has resources that provide SMEs with much needed support and guidance on critical matters, like bid structure and regulatory compliance.
2) Finding relevant contracts
It’s tricky to find contracts when you’re just setting out or to even know what a relevant contract looks like for your business.
Supply2Gov’s tender alert service provides access to the biggest database of public sector contracts in the UK. Small businesses can register for free to receive notifications whenever new, relevant, local procurement notices are published.
3) Expense
A common complaint is that bidding for public sector tenders is an expensive exercise that doesn’t always deliver reasonable returns.
Supply2Gov provides four pay-as-you-grow tender subscriptions so that you can increase or decrease your reach as your needs change. The single registration system that saves all your details for future tenders is also a great time and cost saver.
The four subscriptions are:
- Local area, which is free – forever.
- Country, which includes all regions in your selected area
- UK, which covers all relevant contracts across Wales, Scotland, England, and Northern Ireland.
- UK & Ireland, which extends to the Republic of Ireland and is the most comprehensive subscription for tender alerts you’ll find.
Contact us now to find out how to obtain government contracts using our subscription options or register immediately and watch as the contracts fly into your inbox.