Government Tendering as a Small Business – a 5-Minute Guide
It’s no secret that governments spend billions of dollars on massive critical infrastructure projects every year. However, what you may not know is that there are many thousands of smaller government contracts up for grabs could perfectly suit your small or micro business.
In fact, in 2019-20 the government spent more than £15 billion through small and medium-sized enterprises (SME’s); that accounts for more than 25% of all money spent.
Yet, 3 out of 4 small businesses don’t even throw their hat in the ring to compete for these public sector projects – despite the many compelling reasons to do so:
What’s so good about public sector contracts?
Firstly, public sector contractors are paid on time. Strict standards mean that suppliers, contractors, and subcontractors must be paid within 30 days of submitting an invoice. That means no more waiting around and hassling clients for payment.
Secondly, the government actively wants more small businesses to get involved in tendering for government contracts. Small and medium sized enterprises (SME’s) have been shown to have greater flexibility, offer new ideas, lower costs, and better value for money on government projects. Not only does this save the taxpayer money, but it makes the government look good in the process. It’s win-win!
Thirdly, you may be surprised by the kinds of goods and services that are up for tendering. Government projects can require small businesses from all kinds of specialist industries. Keep in mind that local authorities, emergency services and the NHS all follow the same public procurement processes
Find contracts to suit your small businesses:
The government are constantly, quietly looking to buy goods and services from the private sector. They’re often looking for anything from advertising and cleaning services to engineering and office equipment. These jobs are hugely varied and take the form of contracts that businesses must then compete for (a process known as tendering).
Thanks to a series of reforms, it has never been easier to view and access the many public contracts that are currently out to tender.
Any central government contract above £10,000 and all local authority contracts above £25,000 must be listed on Contracts Finder. Contracts Finder is a great place for small businesses to see exactly what kind of contracts are out there. You can even set up email alerts and register your interest for future procurements so that you’re up to date with the latest opportunities.
Higher value contracts, usually above £118,000, are listed on the Find a Tender service.
How to win your bid for government contracts:
Pick your fight
Government procurement is a tightly legislated matter, so applying for contracts without doing your homework will could really hurt your chances of being successful. Only bid for work that you are absolutely sure you could deliver – and in a clear timeframe.
Another good idea can be to aim for smaller contracts, particularly to begin with. Opportunities under £100,000 have had pre-qualification questionnaires removed – that’s one less barrier stopping you from getting your small business’s foot in the door. Understand your business’s finances better by using simple, easy accounting software like Cashflow Manager.
Back up your claims
If you’re good at something, think about ways you can prove it in your bid. Being able to show examples, references or even screenshots of how something works can go a long way. Evaluators aren’t just going to take your word for it – you need to be able to demonstrate your concepts or expertise.
Timing is key
Once you begin the government tendering process, you will be given a series of key dates to provide information to the customer by. These are very strict deadlines. Plan ahead and make sure you can meet all the various deadlines throughout the process so that you don’t miss any
Make is easy for the evaluator
Remember, real people are reading your bid. Make their lives easier and increase your chances by writing an easy-to-read tender. Use plain English, free from jargon or acronyms.
Keep your sentences nice and short. Format your answers using headers or bullets if suitable. Don’t assume they know about your business either; so, make sure you explain any techniques or concepts used.
Businesses are encouraged to contact the buyer at any stage in the process to ask questions – so don’t hesitate to reach out.
Additionally, a ‘debriefing’ can be requested at any evaluation stage of the process. If you are unsuccessful in bidding for a contract you can (and should!) request a debriefing from the contracting authority to get positive, constructive feedback on your bid. This is a powerful tool at your disposal and could very quickly help your small business refine its practices and improve its chances next time.