Winning government contracts if you’re an SME
Tools & Resources
Key learnings
- The government is typically the largest procurer of goods and services in any given country.
- SMEs have an opportunity to diversify their customer base and grow their business through public sector tendering.
- The UK government has pledged to spend £88bn procuring from SMEs in 2021.
Tendering for contracts from the public sector is not just for large multinationals or PLCs – it’s for businesses of all shapes and sizes. UK SMEs, in particular, have a great opportunity to win government contracts, not least because the government has pledged to spend £88bn procuring goods and services from companies of this size. If you’re a small business, selling into the public sector brings many benefits. Here, we talk through the ins and outs of public sector tendering and explains what you can do to make your business bid ready.
Too often, SMEs believe that they will never be able to compete with the big corporates who typically bid for government contracts.
But being a small business doesn’t necessarily put you at a disadvantage, particularly in a context where the government wants to do all that it can to support SMEs.
In fact, you can’t afford not to be tendering for public sector contracts as the government is typically the largest procurer of goods and services in any given country.
What we also know is that when public money is spent through SMEs, it has an amazing effect on the economy around it.
When SMEs can bid and win valuable contracts, it gives them a chance to diversify their customer base, secure new pipelines of work, and ultimately have the freedom to grow their business and reach their full potential.
If you’re an SME founder or director and you see a large project that you know your business would be a great fit for, then jump at the chance.
You’ve got nothing to lose and everything to gain.
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The benefits of selling into the public sector
Every year, the money that the government spends on procuring services generates 50,000 new business opportunities.
So, by bidding for and winning public sector contracts, you can guarantee yourself a secure pipeline of work from a reliable customer, ensuring longevity and sustainability at a stroke.
Guaranteed revenue supplied by the public sector gives your business the breathing room it needs to support operational growth.
One of the biggest benefits of winning government contracts is that the UK government has guaranteed their suppliers will be paid 100% of what they are owed within 30 days.
This support’s your cashflow, business performance and productivity.
Secondly, by winning contracts, your business can cement its reputation as a public sector supplier, making you more likely to attract and retain staff and win future work.
When you’re applying for a public sector tender, most buyers will ask you to supply case studies to prove you’re capable of delivering.
So, by winning contracts initially, you’ll be more likely to win even bigger projects in the future and keep your business on the growth path.
It’s also important to remember the social benefits that come with SMEs delivering contracts.
These include increasing employment in your area, tackling inequality, supporting economic recovery from COVID-19 and improving equal opportunities.
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Getting bid ready
If you’ve decided to dive into the world of public sector tendering, there are a number of things you can check to give yourself the best chance of growing your business and diversifying your customer base.
- Know your deadlines
Have you checked and double-checked the deadlines? Before getting started, make sure that you’ve left sufficient time to submit your bid before the final date. Something we always suggest is working backwards from the deadline.
Start with your end goal and develop a plan of action for your bid. For example, if your bid is due in 4 weeks, you want your final draft complete by week 3, so in week 1 you need to speak with the experts in your team. It’s also worth knowing your deadline throughout the process for clarifications, just in case you need to ask the buyer a question.
- Include all the information
Check you have included all the information required by the buyer, especially any specific documents or evidence you have been asked to supply. This can include administrative information, business reliability, health and safety reports, quality assurance, business insurances and much more.
- Is your tender in the right format and proofread?
Before submitting, confirm you have followed the buyer’s instructions on how the bid should be presented, as well as make sure that the tender is legible, referenced, labelled, and thoroughly proofread to check grammar and correct any silly spelling mistakes.
- How can you submit your response?
Is your submission required by post or electronic? Or both? How many copies are required? If sending a paper copy, also send a return address envelope so the buyer has your company’s details. If it is being submitted electronically, get a record of its dispatch and receipt.
- Are the relevant people available for clarification?
Make sure that you, or anyone else who was involved in the process, is available for clarification during the evaluation process so that the buyer can contact you with any questions.
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Finding a tender to bid for
If you’re looking for public sector contracts, a good place to start is the government’s tender portal Contracts Finder.
You can also find a list of region and sector-specific public sector portals here.
Next steps...
- Check out this advice on what to consider before making the decision to bid or not to bid.
- Visit the government’s own tender portal Contracts Finder.