Did you know that about 70% of government contracts in the UK are low-value? They are ideal for small and medium enterprises (SMEs) and Voluntary, Community, and Social Enterprises (VCSEs) that want to make a name for themselves in public procurement.
What makes low-value contracts ideal?
- There are an awful lot of them, so there are plenty to go around.
- Contracts are short, usually a year or so, which means there are more tendering opportunities more often.
- Large enterprises tend to ignore them, so, while competition is high, it’s fair.
And that’s just for starters.
We’re going to delve a little deeper into low-value government contracts.
Low-Value Purchase System
The Low-Value Purchase System (LVPS) is one of the routes to market available through Crown Commercial Services (CCS). It’s used for simple contracts that typically include common goods and services. Their value must be below the threshold limits stated in the Procurement Policy Note (PPN) for Public Contract Thresholds 11/23.
Contracts are either awarded directly or through mini-competitions – mini versions of standard open procedure contracts. Pretty much every product and service imaginable can be sold on the LVPS, from fishing, alternative energy, and defence equipment to musical instruments, hospitality, and IT services.
LVPS benefits
The System has several benefits, including:
- Compliance with the Procurement Act 2023 and the Public Contracts Regulations 2015.
- Increased supply chain diversity and resilience in a way that favours SMEs, VCSEs, startups, and new businesses.
- Enabling more SMEs to enter the procurement market, which meets the criteria of the government’s SME policy.
- Notification when relevant government contract opportunities are published.
Low-Value Tenders Not On The Purchase System
Contracting authorities aren’t required to use the LVPS for low-value contracts. Nor are they required to publish below-threshold contract opportunities on the government’s Contracts Finder. You can find low-value government contracts on independent (decentralised) public sector procurement portals or platforms.
This shows that the government has a more relaxed attitude to contracts that remove the barriers keeping small suppliers from public procurement. There are also fewer restrictions on SME tenders and less red tape to unravel. For instance, tender documents are short, with fewer support documents.
That having been said, there are still some Ts to be crossed.
If you want to figure out how to win low-value contracts, especially local council tenders, you must understand the details in the contract notice.
Read all the tender documents thoroughly. Make notes. Ensure your team also reads the tender from top to bottom. Encourage them to make notes.
Have a meeting to discuss the tender and compare notes. If there are any fuzzy areas, ask the contracting authority for clarification.
Listen to team members who don’t think you meet all the eligibility criteria or feel the contract is simply not a good fit for your business. Take all input into consideration and determine whether you’re going to bid on government contracts or not.
Set Yourself Up For Success
There are certain qualities that local councils look for in tender submissions and social value hangs out around the top of the list. Highly localised social value, that is.
Social value must have economic, social, or environmental benefits, although it’s not an either/or situation. You’re in the pound seats if your proposed skills tick two or all three of the boxes.
Talk to and partner with local NPOs and charities so you know that your contribution supports projects that address genuine local issues. After all, you don’t want to waste time and money on irrelevant projects that miss the point.
Contributions take several forms, so you can do whatever is within your reach. You could throw money at a charity, and they won’t say no, but getting your hands dirty, so to speak, demonstrates more commitment to the cause.
Social Value is Important. Value for Money Even More So
Local councils have limited budgets. Even low-value contracts have very little wiggle room, so price is a big factor in awarding tenders. However, the Procurement Act 2023, requires government departments to take a broader view of eligibility criteria and assess submissions according to their total value for money.
Social value is just one part of the whole. Other deciding factors in price evaluation include experience, performance, and quality
Two things here.
1) You must provide evidence to support your claims regarding performance and quality. Client references are good, but it’s easy just to include the positive reviews. You need something more objective.
- Case studies that include methodology, analytics, success factors, KPIs, and results are far better.
2) Make it clear how and how much value for money you provide. For example:
Does your business offering provide cost-saving opportunities?
- Discounts for bulk orders.
Does your offering improve or streamline processes?
- Technology reduces waste.
Do you encourage collaboration and innovative solutions?
- Collaboration on contracts improves supply chain efficiency.
Tender Alerts Herald SME Opportunities
A common complaint is that low-value contracts are hard to find. That needn’t be the case, however. Supply2Gov (S2G) is a contracts finder that delivers local low-value contracts for SMEs, high-value contracts for bigger enterprises, and all government contracts in between.
We are confident that our platform covers all bases because we publish more contract opportunities than the Government’s Contract Finder and Find a Tender search services.
SMEs can register for free and set up alerts for low-value contracts in their areas of specialisation. Larger businesses will enjoy alerts from further afield – right across the UK and Republic of Ireland – and can count on access to 100% of all governments contracts published.
Why not register for tender alerts specific to your supply business now. Set up searches for government contract opportunities in your industry and reap the benefits as alerts are delivered to your door.