Is getting on a Government Procurement Framework worth it? Expert Opinion

Is getting on a Government Procurement Framework worth it

We asked the experts to share their experience on whether getting on a Government Procurement Framework is really worth it? 

Every year the UK Government spends over £284 billion on everything from advanced cyber security services to people and consultancy, bricks and mortar, communications, marketing, staffing and even pencils and paper. It’s a mind-boggling number, and one that we know changes the fortunes of small and large businesses alike. If you’re on the hunt for growth like many business owners, sales leaders, and operations teams up and down the UK, Public Sector procurement frameworks could be a prime opportunity for new business. Before we get into the pros and cons of getting on a Government Procurement Framework, it’s worth noting that there’s a lot of hard work behind the scenes of success. The public purse is accountable to all of us as citizens, individuals, and business owners; as you’d expect, it’s not as simple as one, two, three, but the benefits and opportunities for those that do secure their place on a Government Procurement Framework are there in abundance.

Dispelling the Myths around Public Sector Procurement – Are Frameworks really worth it?

If you’ve ever thought of supplying local or central Government, we’re pretty sure that you will have heard a host of horror stories and more than a few bloopers from those that have been there in the past. The past is a crucial element to consider here; long gone are the days of big companies being the only ones eligible to supply the government. In fact, since SME champions were embedded into Government departments back in 2012, the UK Government has been on something of a mission to level the playing field between big business and SME innovation.

Dispelling the Myths around Public Sector Procurement – Are Frameworks really worth it_

Am I too small to supply the Government?

In short? NO! According to the Small Business Policy Team, the Government is committed to obtaining value for money for services/ products procured and supporting both small businesses and start-ups through its procurement activities.

Importantly this isn’t just a policy or initiative with no mandate or accountability either. The UK Government is actively committed to procuring at least 33% of all goods and services via SMEs, which they define as anyone under 250 employees and a turnover of less than £50 million. We’re sure you’ll agree that this represents a pretty massive swathe of British enterprises and goes someway to answering “is getting on a Government Procurement Framework worth it?”

Back in 2012, GovData’s leadership played a crucial role in pioneering the SME agenda which stated that wherever possible Public Sector should purchase from SMEs. We’re incredibly proud of the role we’ve had in helping SMEs win government opportunities. From our experience both inside and outside the Government, we know how much value SMEs can add to our public services.

Will I get paid on time?

This is one of the biggest questions we hear around whether getting on a Government Procurement Framework is worth it? For many of the aforementioned SMEs, this is a major, we repeat, major concern. We’ve all heard horror stories around 90- or 180-day payment terms. As business owners, we’ll all recognise the challenges that long term delayed invoice payments can present for any business. Well, let’s get this one off the table pronto; the Government’s central payment policy is as follows:

“Government has a target of paying 90% of its invoices within five days, and all of them within 30 days, to ensure we pay our suppliers on time. Each department reports their payment performance progress.”

However, what many of us will be familiar with (naming no names) is large contractors taking advantage of these favourable payment terms and not passing them through to their hardworking supply chains. Well, as you might imagine, the Government has a directive for that too:

“Since 1 September 2019, any organisation that bids for a central Government contract in excess of £5 million a year needs to demonstrate it has effective payment systems in place to ensure a reliable supply chain.

“As a part of this, the Government has set a standard of 95% of all supply chain invoices to be paid within 60 days for organisations who want to do business with the government. Suppliers who do not comply with the Prompt Payment standard could be prevented from winning government contracts. This will help ensure good payment practice gets passed down to small subcontractors.”

Ironically, the second point around Prompt Payment standards is moot should SMEs take a more active role in supplying the Public Sector. Still, the fact remains that there’s significant transparency and accountability in payment processes from the Government that is specifically designed to benefit smaller organisations.

does the public sector pay on time_

Don’t the same suppliers keep winning?

We’re all familiar with some of the Government’s strategic suppliers. There are around 40 of them, and they’re considered so essential that they warrant Strategic Supplier status. They change regularly and include G4S, BAE Systems, Amey, Thales and Atos. Between them, they administer and support a host of critical UK services, including Student Loans Company, HS2 and Public Cloud (AWS). These organisations are active on a number of frameworks, from G-Cloud to Technology Services and Framework Agreement for Technical Support / Design & Engineering. They’re major names that we all recognise and often feature in bad news stories that sweep the nation; think G4S and the Olympics!

What we perhaps don’t see and what’s worth lifting the lid on is that recent stats show that only 14% of UK Public Sector spending was spent with these suppliers, at a massive £15.7 Bn. And let’s face it, there aren’t many of us out there that could genuinely cope with main contractor status for HS2.

For SMEs considering whether getting on a Government Procurement Framework is  worth it? One of the big concerns will be whether to invest time and effort into securing framework status, it’s well worth noting that whilst the media are keen to show the failing of some of the UK’s largest businesses, there is a huge opportunity for many organisations to access specific lots on relevant frameworks which whilst not entirely worth £15.7 Bn do represent significant growth opportunities for the right organisations.

Are Public Sector Frameworks a closed book?

Secret meetings, behind closed doors and hushed conversations about whom to award contracts to? Sorry to burst everyone’s bubble, but the Government has come a long way from the realms of “Yes, Minister”. Procurement, especially national Government and Local Government Procurement by its very nature, is a transparent and open process. It has to be, after all, it’s the taxpayer’s money that our institutions are spending.

If you feel like it’s a closed process, then most likely you’ll have been looking at the plethora of sites that claim to show all the tenders and opportunities available, only to find that you’re not eligible for any of them or none of them seems to fit your business. Sound familiar? Unfortunately, Public Sector Procurement, even at Framework level, can feel like a complex maze to navigate with so many processes and acronyms that can feel like a language of its own.

In reality, getting your company onto a Public Sector framework is a detailed but methodical process that needs skill and attention to get right. From insurances and policies to documentation and schedules, there is no shortcutting the selection process for being awarded a framework place. Most frameworks and DPSs that GovData supports our clients have a value of between £160 Million and £1.95 Billion. While they cover a host of “lots” or service lines to be procured, they are critical to achieving success in the Public Sector.

Are Public Sector Frameworks a closed book_

Do we have the resources to win Public Sector business?

This is a really tough question for a host of businesses; whether you’re a small, medium or large business, chances are your resources and people are your biggest assets, so diverting them to a Public Sector strategy can feel like a tough choice. It’s a definite consideration to make for anyone thinking about expanding with government contracts – and whilst the Framework Support Services {LINK} that GovData provides mean that you won’t need additional headcount you will need to allocate time and knowledge with any external support partner to make sure you build a successful bid submission. Each framework has a definitive timeline that is non-negotiable (as you might expect), and you’ll want to make sure your team, either internal or external, have considerable expertise in securing framework awards.

If you’ve made it this far, you’re probably of the same opinion as many businesses that Public Sector Frameworks are most definitely “worth it” the scale of opportunity within the current and planned frameworks is, in the words of one of the clients, “eye-watering”. Frameworks are only part of the story – if growing your business with the Public Sector is on your roadmap, you’ll want to consider the implications of direct award and what to do next.

What is Direct Award?

Getting your business onto a framework is the first step to accessing Government contracts, but a framework alone isn’t a signed opportunity. You’ll still need to apply for the opportunities within a framework and you can now supply any government organisation that needs your services. In some cases, competitive situations still occur, but in many cases, department will look to award contracts directly without a formal tender.

“Direct award effectively means that any government or wider Public Sector body (schools, police, fire, ambulance, health trusts and housing associations) can choose a supplier they like and award them a contract worth up to £1.5m without any formal tender and without any competition being involved at all.”

It’s important to note that competitive tenders do still happen as well as direct awards, but the framework’s scope effectively means that the pool of competition is purely those who have been awarded the framework. Think of it as a passport to trade, with no or minimal competition.

Public Sector Frameworks are a key part of the Government’s procurement strategy, ensuring that departments can purchase goods and services quickly and without repeatedly conducting long, complex tenders. In summary, whilst there is considerable work initially needed to secure a Framework award, the opportunities that they present do have the potential to catapult SMEs onto new growth platforms.

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GovData are neutral facilitators that remove the barriers between SMEs and the central Government. We have extensive experience in helping organisations access and win Public Sector opportunities. We’re passionate about levelling up the SME agenda and helping businesses to grow. If we can help you achieve any of your Public Sector goals, then please get in touch; we’d love to help.