This informal CPD article, ‘The process for tendering for public sector procurement opportunities’ was provided by Executive Compass, who provide bid management and bid writer services assisting owner-managed businesses, SMEs and large multi-national companies to win public and private sector contracts.
What is public sector procurement?
Public sector procurement refers to the purchasing process undertaken by government bodies such as central government, councils, NHS trusts, and other bodies that are funded by public money (e.g. housing associations). As one in every three pounds of public money (£300 billion annually) is spent on public procurement, the procurement processes are underpinned by stringent procurement laws that ensure money is spent transparently, placing value for money and public benefit at their centre.
It is no longer the case that public sector authorities can simply award work to a preferred supplier because they have a longstanding and positive working relationship. Instead, organisations wanting to work with the public sector must undergo a competitive process which typically consists of two stages:
- Stage 1: Commonly known as the selection stage, SQ or PQQ, this stage requires bidders to provide company information, and self-certify that they meet mandatory requirements and are not excluded from bidding for any reason. Stage 1 is backward looking – it focuses on who the bidder is as an entity and what they have done previously.
- Stage 2: The award stage is reviewed only where candidates have successfully passed stage 1. Typically focussed on how the bidder will deliver the service (forward looking), this stage is about assessing bidders based on their pricing and quality element to identify the most economically advantageous tender.
To enhance efficiencies, these two stages are often conducted under the open procedure as one procurement exercise, with a single deadline, but can also be split out with two distinct deadlines – following the restricted procedure – if the authority chooses.
How undertaking public procurement can support business growth and development
It may seem self-explanatory, but an organisation’s motivation to pursue public sector opportunities can vary significantly based on their business model. For example, factors can include:
- Retaining clients that the organisation has worked with for several years
- Creating a pipeline of work that ensures guaranteed income
- Developing experience which may be required to tender for other opportunities.
Of course, the most common reason for bidding is organisational growth, with the above points more of an added benefit rather than the end goal. By developing a portfolio of public sector contracts, organisations are able to guarantee a programme of future works that fit within a stringent and well-regulated environment that ensures clearly defined scopes of work, working practices, and payment terms.
What should be considered when bidding?
Organisations beginning their journey into public sector procurement might follow various different strategies. For example:
- Bidding for everything and anything relevant based on a numbers game
- Creating a bid strategy to identify the services, locations, and contract types they are interested in.
Both approaches have their own merit. However, on balance an organic, strategic bid/no bid process is the more effective route in the long run as it minimises risk, and ensures an organisation’s bid strategy is underpinned by a sound methodology that considers:
- If the opportunity is right for the organisation – bidding for, and winning an opportunity that is not suitable, and cannot be delivered to a high standard is setting yourself up for failure and will ultimately lead to reputational damage. Bidders should always analyse both the contract and the tender and be confident in their bid / no bid decision.
- If the bidder can submit a high-quality tender – bidders who ‘play the numbers game’ with a shotgun approach to bidding run the risk of focusing on quantity over quality. It is perfectly acceptable for an organisation to bid extensively if they feel they can deliver the contracts, but appropriate resource must be allocated to enable bids to be developed and produced to a good standard. This generally means making sure that responses are bespoke to the tender (and answer the question posed), and that appropriate research has been conducted to demonstrate understanding and an effective proposal for service delivery.
- How the bidder can differentiate themselves – by identifying win themes, areas of innovation / value for money, and where the organisation can excel, this ability to demonstrate where the bidder can go the extra mile is often the difference between first and second place.
Tendering should then always be treated as a learning experience, with feedback (both internally and from the buyer) used to improve and refine the bidder’s approach.
We hope this article was helpful. For more information from Executive Compass, please visit their CPD Member Directory page. Alternatively, you can go to the CPD Industry Hubs for more articles, courses and events relevant to your Continuing Professional Development requirements.
