Never thought of engaging in the tendering process?
Here’s why it could be the perfect way to grow your SME.
If you’ve always thought that tendering for public sector contracts was just for large companies, it’s worth thinking again. The government has stated that by 2022 a third1 of its spend on goods and services will be with SMEs (including VCSEs), either directly or through the supply chain. Given the government spends £284 billion2 a year on buying goods and services from external suppliers via the tendering process, it’s a huge opportunity and one you ought to consider if you want to grow your business.
And it’s not just public sector organisations that go out to tender either, many private sector companies also invite suppliers to tender for contracts, and although there are some differences between the two, fundamentally the tendering process remains the same, as do the benefits and opportunities.
Some of the reasons why tendering could really help your small business grow are:
- The buyer is actively looking for the product/service you provide. You don’t need to go out and find a customer and convince them of the need for your product or service because they already know they need it. Their decision to buy is made and they just need to make up their minds who to buy from. The tendering process provides you with an opportunity to explain why your company provides the best solution to meet their requirements.
- Contracts are typically for a minimum of 3 years – winning such a tender provides you with a steady, known income for that length of time and something predictable you can build further business on. Often contracts are extended by 1 or 2 years, and what starts as one contract can easily turn into a long- term relationship beneficial to both parties; applicable in both the public and private sector.
- The criteria for winning a public sector tender is very clear with a published and fair scoring system, meaning no barriers to SMEs because of favouritism or nepotism . Tenders are usually evaluated according to MEAT – Most Economically Advantageous Tender – where price and quality are given a weighting, responses are scored, the weighting applied and the bidder with the highest score wins. For example a tender may have a weighting of 40% on price and 60% on quality, and within the quality section there could be a number of questions, each with their own weighting – perhaps 3 questions weighted at 20% each, and 4 questions at 10% each. How responses are scored (e.g. with marks out of 4 or 5, and how to achieve those marks) is also detailed in the tendering process documentation.
- Finding a public sector tender opportunity that fits your business model is relatively straightforward. All opportunities over £10,000 for central government or £25,000 for the rest of the public sector are published on UK Contracts Finder, whilst higher value contracts (e.g. over £181,302 for supplies and services) are published on the Official Journal of the EU (OJEU). Both portals can be searched with keywords. Take a look at our Guide to Tendering with the Public Sector for more information on how the whole tendering process works.
- The tendering process includes the buyer providing feedback on why your bid was successful or unsuccessful often with a comparison to the winning bidder if relevant, enabling you to learn from the experience and improve your bid the next time you tender. This is the secret to consistently winning contracts. The feedback you receive may even help you improve your business outside of the tendering process too – for example it may result in better policies and procedures, better adherence to regulations, or encourage you to gain accreditations/certifications such as Investors in People, or other industry specific awards.
- Tenders aren’t just for direct contracts with buyers, there are also opportunities to win a place on aframework – a tendering process which results in a group of suppliers that the buyer(s) will choose from each time they need a product/service delivered. Although it doesn’t guarantee you work, getting appointed to a framework can be easier than winning a direct contract – you don’t need to beat all the competition to be appointed to a Framework, just some of the competition. Some of the bigger companies may not be interested in Frameworks due to the lower value per supplier making it a prime opportunity for SMEs.
- As an SME you often have a USP that can really give you a competitive edge over your larger competitors and you are usually able to react more quickly to changing needs, be flexible, innovate more easily, offer a bespoke service and provide better value for money. Often your local knowledge is outstanding, and many tenders now include questions around what you can give back to the community, aka Social Value, or CSR (Corporate Social Responsibility) – the fact that your employees live and work in the local community, and you use goods and services from other small businesses will all help you in the tendering process.
The tendering process can be a powerful way to grow your business, and is an avenue full of opportunities, but it can seem complex if you’ve never tendered before and time consuming if you’re tendering regularly. Complete Tenders offers a range of services to help SMEs through the complexities of tendering, from our Tender Tracker service where we search open tenders for that perfect opportunity for your business, to our tender writing services where we work with you to craft winning tender responses, to the full bid management service where we provide you with an end-to-end tendering process experience to maximise your return on investment and deliver significant growth.
Reference 1 https://openforbusiness.campaign.gov.uk/
Complete Tenders provides a comprehensive Tender Writing Service using specialists with a proven track record to create compelling responses and win contracts.