Bidding on government contracts: sound strategies for success

Working with the public sector comes with numerous advantages, which is why an increasing number of privately owned businesses in the UK, particularly those in the small and medium-sized enterprise (SMEs) category, are looking to tap into government contracting opportunities. This can help them expand their reach by gaining access to new markets, ensuring a stable source of revenue through repeat business, improving their image and reputation, and facilitating professional connections, ultimately leading to increased revenue and sustainable growth. 

The UK Government also supports and encourages the participation of SMEs in the public sector through dedicated measures such as changes made to the UK Public Procurement Act 2023 and the allocation of over £300 billion to public procurement annually, which lowers barriers to entry and makes public tendering all the more accessible and appealing to all interested parties. 

All in all, winning government contracts can be a game-changer for any company, so as an entrepreneur, you have all the reasons to explore this avenue. However, in order to reap the rewards, you have to know how to navigate public procurement effectively and stand out from other companies going after the same contracts. So, here are a few strategies and practices that can set your business up for success when bidding on government contracts. 

Familiarise yourself with the environment 

As expected, the public sector follows a well-defined set of rules and procedures when it comes to contracting, much different than the ones employed in the private sector, so before you jump into it, you first need to understand the lay of the land. 

Public procurement, the process by which government bodies and organisations acquire goods and services from private companies, is a heavily regulated process, relying on strict rules and standards that both the issuing parties and suppliers are required to comply with. This is necessary in order to guarantee transparency, efficiency, and fair competition, ensuring that the contracts are awarded to the most deserving candidate. By contrast, in the private sector, rules around contracting are more relaxed and the process is more flexible, giving businesses the freedom to choose the purchasing strategies that work best for them. In this case, the main driver is profitability and the specific goals of each company. 

The UK public sector is vast, comprising a multitude of departments, organisations, and agencies, such as the NHS, the Armed Forces, schools, local councils, and so on, all of which are in constant need of products and services to run their operations. When one of these bodies needs to purchase something from the private sector, they usually publish an announcement in this respect, allowing suppliers to find tendering opportunities and bid for the contracts that are of interest to them. The easiest and most straightforward way to spot opportunities and find a UK tender that’s suitable for your business is to use a contracts finder service.

As mandated by public procurement laws, central government tenders exceeding £12,000 and sub-central government tenders above £30,000 (including VAT) have to be publicly advertised, either through an invitation to tender (ITT), a request for information (RFI), a request for proposal (RFP), or a request for quotation (RFQ). 

In these documents, applicants will find details about the tender, including eligibility criteria, scope of work, timeline, and other requirements they need to take into account. Those who fit the criteria can submit their bids before the response deadline. The issuer will then assess all applications and award the contract to the most advantageous tender (MAT).

Get your business tender-ready 

To improve your success rates, you need to determine whether your business is ready to step into the public procurement space and understand what public entities usually look for when evaluating suppliers, so you can focus on improving and emphasizing those key areas. 

Although every tender is different in terms of requirements, public sector bodies typically favour companies that show particular characteristics and traits, such as having a trading history of at least two years, a strong financial standing, experience in delivering similar contracts, and enough resources to be able to fulfil contract obligations.  

This means you need to start collecting the necessary documentation, such as financial statements, past performance records, and relevant certifications, well in advance, and have them ready so you can demonstrate your company is a good fit. 

Find the right tenders 

With public sector bodies issuing over 50,000 contracts annually, there’s certainly no shortage of tendering opportunities that you can tap into. However, it stands to reason that many of these contracts are not going to be relevant to your company. Also, the large number of options can make the research process quite tedious and time-consuming. 

The easiest and most straightforward way to spot opportunities and find a UK tender that’s suitable for your business is to use a contracts finder service. These platforms feature advanced search options that allow you to filter by keywords, location, and budget, so you can browse through available tenders with ease and narrow down results to those that match your criteria. 

Contract finders also keep you updated, sending you alerts and notifications when relevant tenders are published. This can save you a lot of valuable time and effort, and at the same time enable you to act quickly when opportunities arise. 

Understand the requirements 

Before applying for a tender, it’s important to assess the project and determine its viability. For that, you need to read the tender documents from cover to cover, carefully reviewing all details and instructions, including evaluation criteria, terms and conditions, and deadlines to ensure you understand what is expected of you and determine if you meet the mandatory requirements. 

If, after a thorough examination, you’ve decided to compete for a contract, you can start working on crafting a compelling proposal, highlighting the aspects that set you apart from other bidders. Keep in mind that in public procurement, government bodies have a duty to ensure that taxpayers’ money is spent wisely. So, if you can demonstrate that your company can deliver optimal value for money, your chances of winning the contract increase substantially. 

It’s also important to avoid a one-size-fits-all approach and tailor your proposal to the tender’s requirements. Send in your bid by the specified deadline, following the submission guidelines as requested, and patiently wait for a response. 

Final thoughts 

Selling goods and services to organisations in the public sector is not only a highly lucrative endeavour, but also one that’s increasingly easy to access. Nevertheless, thorough preparation is necessary as it often makes the difference between missed opportunities and positive outcomes. By highlighting the steps you need to follow and the aspects you need to focus on during the tendering process, these practices can help you increase your chances of securing your first public sector contract, thus providing a clear path to success.