Since the early 90s, we’ve built a deep understanding of the Public Sector procurement process and have noticed an abundance of myths around Public Sector bids. Our CEO has first-hand knowledge of the entire operation and one of his first projects for the Government was a full review of the procurement process. The findings highlighted an inefficient process that was unfavourable for SME suppliers. It was following on from this research that national frameworks were created.
Unfortunately, some of the myths around Public Sector bidding and small businesses remain. While it’s true that the process can be resource-intensive for SMEs, it’s more possible than ever for small businesses to win a Public Sector contract, despite what you may think. Below, we break down some of the common myths around the sector and bidding process for SMEs.
Myth 1: Public Sector contracts aren’t for small businesses
One of the biggest preconceived notions around Public Sector contracts is that it’s solely for larger corporations and business groups. Many SMEs believe the procurement process is confusing and the established buyer relationships that larger businesses already have in place means ultimately, bidding is fruitless. While this may have been true in the past, the UK Government continues to pledge more support for small and medium-sized organisations.
This support took two forms. Firstly, one-third of central Government spend is pledged to small or medium-sized organisations, ensuring that less established suppliers have opportunities to win. Secondly, the entire tender process has been streamlined, creating a more user-friendly route to market and providing access to another £12 billion worth of Public Sector contracts for SMEs.
The key takeaway from this is that SMEs need to be more proactive and persevere. If you invest the time to learn about how the system works, why bids are successful and how you can get over the initial hurdles, the rewards can be extensive. Smaller businesses need to embrace the procurement process and overcome the associated challenges – both real and perceived. This is the only way to access an entire range of new opportunities, new business and new relationships.
Myth 2: The bidding process is too resource-intensive for SMEs
Although the entire procurement process can take around 10 weeks and requires plenty of due diligence on the part of the business, there’s plenty of support out there – including GovData. The important thing to consider is proper planning. With the right preparation, a business can execute the culture shift necessary to meet the framework criteria and learn more about the associated documents that need to be completed throughout the process.
Some of these documents can be time-consuming to complete but once you have an example in place, it can be applied to future tendering opportunities. An easy first step for small businesses is to understand what each document entails, allowing you to mitigate headaches further down the line.
Myth 3: Public Sector bids from small businesses always fail
It’s a common misconception that Public Sector bids fail because of two primary reasons: the business isn’t large enough to compete for the contract or the business cannot possibly have the capabilities to deliver what they’re suggesting.
The truth is much different. While it’s true that the majority of first-time or self-submitted applications fail, it’s rarely attributed to business structure or incompetence, it’s simply because they don’t have the required experience in tendering to the Public Sector. Demonstrating compliance is one of the most important parts of the wider process and this is where many businesses experience challenges.
It’s important to have the right documents and policies in place at each stage of the process, as well as ensuring you follow the rules regarding your submission. The Government procurement programme has strict regulations around deadlines, communications, word counts, and specific language used in the bid. Many small businesses also struggle with the specific terminology that gets used throughout the process, which can initially be off-putting. All in all, this just requires taking the time to learn the intricacies of the process and applying what you know in your application.
Myth 4: Working with a Public Sector client isn’t worth the effort
While most people understand the primary benefit of being on a framework, the finer details are typically misunderstood. It’s this lack of knowledge that often diminishes the appeal of Public Sector frameworks for small businesses. The fact is framework agreements have many different benefits that may not be immediately apparent:
Broad Customer Base: Getting the obvious benefit out of the way first, frameworks obviously provide access to a much wider audience. The majority of government framework agreements include regional and national customers – an audience they would never usually be in contact with.
Quality-Based Bidding: Frameworks base a successful application on more factors than just price. If a business demonstrates they can provide a quality product, this can play a huge part in both joining a framework and being awarded a contract. This gives suppliers the opportunity to potentially become an approved supplier even if they’re not necessarily the cheapest. Similarly, the framework doesn’t favour incumbent suppliers, constantly ensuring a rotation of new businesses.
Better Engagement: On a more granular level, frameworks offer suppliers the opportunity to be connected with buyers that specifically need their products or services, creating a much more engaged initial relationship. This can lead to better customer retention and long-term contracts that wouldn’t necessarily be possible.
Transparency: The bidding process for Public Sector contracts is inherently designed to be completely transparent, ensuring there’s opportunities for suppliers of all sizes around the world. This transparency extends to the tendering process itself, where feedback is regularly provided to suppliers on where their bids could be improved.
Lower Risk: Since there’s so much money in the sector, the customers involved in public contracts tend to be some of the most reliable, reducing the potential for missed payments. For small businesses, having a reliable income stream is vital and the Government benchmark of paying invoices in 10 working days can provide that security.
Myth 5: The lowest price supplier always wins the contract
Many small businesses assume that because the lowest price supplier wins the contract, they may not be able to feasibly compete within the framework. Fortunately, this isn’t the case. The entire point of a framework is to ensure that the client can buy from the best supplier for them. A framework agreement encourages suppliers to demonstrate the highest quality products and services, as well as rewarding those that can provide specific information or answer relevant questions to the bid. This ensures small businesses can still operate at a competitive price without fear of being undercut.
Ready to bust the myths around Public Sector frameworks?
GovData’s years of unrivalled experience, research and expertise make us industry-leaders in preparing SMEs to get onto Public Sector frameworks, with an astonishing success rate. For more information on how we can help your business grow from strength to strength with Public Sector contracts, and to help you bust any other myths around Public Sector bids you may have, contact us using the form below: