Making Public Sector Tendering Easier

The public sector faces many hurdles when it comes to appointing a supplier. First and foremost the sector as a whole is highly regulated. There are a number of rules that public bodies must follow before they award a contract. Every step of their decision making is governed either by internal rules and procedures or by national legislation. This makes sense because they are, after all, spending public money and have a great deal of scrutiny to make sure this money is well spent.

They need to build a business case before starting a new service or to continue an existing service, they need to establish budgets, often requiring authorisation from elected members. They need to design a specification or statement of requirements to really pin down what they want, and they need to do this with fair competition principles in mind in accordance with the Public Contracts Regulations 2015. They need to establish a route to market, be it through a tendering process, calling off a contract from a pre-existing framework or simply a direct award to a supplier…all of which rests on the proposed contract term and value over the lifetime of that contract.

You see, when public contracts have an estimated value above the set OJEU thresholds (see our article APPLYING FOR PUBLIC CONTRACTS: Where to look and how to start) the route to market is governed by the law. There’s no getting around this. However, when it falls below this threshold, the council, NHS trust or central government will then need to comply with their own internal financial regulations (often called Contract Standing Orders or Financial Standing Orders). These rules dictate what routes they can take to award a contract based on their own thresholds, decided by their elected members. These can often be found written into the organisation's constitution and should be freely accessible on their website.

Secondly, they are known for their bureaucracy. If you’ve ever bid on a public sector tender then you’ll understand what I’m talking about. Public bodies are huge institutions, and like most big organisations they have vast numbers of staff, teams, departments and service areas. They are a monster machine, with many specialist parts all trying to work together to deliver public services for the common good. To make this all work, they implement strategies, policies, procedures and processes to follow, to try and tie it all together so that Bob in accounting isn’t inhibiting the work Susan is doing in IT, or vice versa. This process thinking, therefore, inevitably finds its way into the tendering process.

As mentioned, they are spending public money and under intense scrutiny over how tax payer's money is being spent. They hit the headlines every time a contract goes south and face the wrath of the media and the people, who are quick to point fingers and cast judgement. This can be very damaging to the reputations of the organisation and its elected members and has forced them to be cautious and typically extremely risk adverse, which impacts upon the tender process in many ways.

It means you, as a supplier, must demonstrate that you meet their expected standards for the delivery of the contract. You must have the right insurance cover, the right accreditations, certificates and sufficient financial stability. You must disclose any wrongdoings you or your directors and shareholders may have done…and this is before you even begin thinking about demonstrating you ability to actually deliver what’s in the contract.

Tenders in the public sector have become long lists of requirements that suppliers, like you, must self-certify that you meet. Often failure to meet these will result in your exclusion from the competition. Then you need to state how you plan to deliver the contract, what staffing resources you have, what experience you’ve accumulated and offer innovation and added value to support the buyer in both meeting and exceeding their expectations. Finally you must be able to offer all of this at an acceptable price.

For new businesses, smaller business, charities or any company that hasn’t tendered in the public sector before, this can all be quite a shock and an incredibly steep learning curve. Many choose not to bid on public sector tenders for the very reason that the process is too resource demanding. The unfortunate reality of this is that the contract needs to go to someone and, more often than not, it’s going to those same, larger companies who can afford to fill out all of the forms, who can afford to meet the mandatory requirements and who have the bid writing team but who don’t necessarily offer the best value for money. There are undoubtedly countless smaller businesses who could comfortably deliver contracts to as good a standard, if not better, and at a better rate, but they either haven’t bid or didn’t submit a good enough bid to convince the buyer of their competence.

We believe that the public sector would benefit from higher numbers of smaller businesses winning contracts. It not only keeps the market competitive and keeps the big boys on their toes, but also raises the standards within these council contracts. This is why we have created a support page, asking for businesses to offer donations that enable us to continue providing free advice and guidance.

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MAKING PUBLIC SECTOR TENDERING EASIER