That’s why it is promising to see central and Local Government making inroads to help SMEs through the procurement tendering process but there is still work to do. UK SMEs are still under-represented in public procurement contracts. According to a recent announcement by the Cabinet Office the Government is on track to deliver its aspiration of awarding 25 per cent of central government business to SMEs by 2015. In 2012, of the 20 per cent of total government spend with SMEs, only 10.5% went directly to SMEs. The remainder (9.4 per cent) filtered down to SMEs via larger companies subcontracting work to them.
It’s promising to see the commitment from government to increase the percentage of business awarded to SMEs, and there has never been a better time to get a slice of the pie. However, I believe to be successful, SMEs must start the necessary planning and preparation needed to secure government contracts now.
Although SMEs are not discouraged from bidding for public procurement contracts, it’s fair to say that many are hesitant to tender. This is often due to the time and resources required to deal with the lengthy and complex procedures and practices used in many tenders. In addition, many smaller businesses fail to tender because they feel they are unable to compete with larger organisations or that they’re too small a business.
The reality is that company size needn’t be a barrier to applying for and winning government contracts. It’s all about careful preparation and planning. By ensuring all processes and policies are well documented and maintained, SMEs stand a far better chance of success when tendering for government or large projects.
My top tips on how to win government contracts:
1. Be prepared: Ensure your business is prepared to tender and start to gather the necessary documentation. Be prepared to demonstrate your standards and policies on issues such as HR, company finance, health, environmental standards and safety and so on. Be sure to assign an ‘owner’ within your company that will be responsible for maintain and collating the necessary information and keeping it current so that you are well prepared when a tender notice comes in.
2. Start small: Identify the contracts you’re most likely to successfully bid for. Start small and once successful, move on to larger opportunities. In 2011, the government abolished Pre-Qualification questionnaires for contracts under £100,000. Having a successful, albeit smaller, tender under your belt will make it easier to bid for larger ones in the future.
3. Understand your market place: Do your homework and establish if it’s worth bidding for government projects directly or if agreements with suppliers are already in place. If agreements are already in place, your opportunity to win a share of government business may be through the agreed suppliers.
4. Demonstrate your strengths: SMEs have the ability to be flexible and to react quickly whilst still offering competitive prices. Demonstrate your abilities by being swift to respond to questions, and offering evidence of where you’ve responded to change in the past and where you were able to offer value for money.
5. Meet the scope: Carefully examine the documentation and questions asked, to ensure you are meeting the scope of the brief. Present your products and services well and give examples by way of evidence and proof points where possible.
6. Ask for feedback: If you put in a bid for any public sector contract and are unsuccessful, ask for feedback. This will ensure you identify the reasons you were unsuccessful and help to improve your next bid.
As access to credit and private spending continues to decrease, public sector contracts offer a more reliable source of income for SMEs. The growth of the UK economy is heavily reliant on the success of SMEs gaining and using government contracts. Therefore, these companies must now take advantage of the opportunities presented and demonstrate their innovative approach in order to be successful in government tenders.
By Jon Milton, Business Development Director, Comensura, a supply management specialist who manages the supply of temporary, permanent and consultant labour in the public, private and not for profit sectors.