Why should I do business with the public sector?

As the government works for the benefit of the public, there is an incredible amount of scrutiny placed on public spending. To ensure public funds are spent correctly, any government department, agency or authority looking to make a procurement must follow the policies detailed within Public Procurement Regulations 2015 .The procedures within make the process of awarding of work fair and transparent and are what make the public sector marketplace so attractive to businesses.

Government contracts are open and accessible

In the private sector, there is no requirement for buyers to share their procurement processes, and awarding work lies with decision makers who are not accountable to external review. This means they can seek quotes from as many suppliers as they like and have no obligation to fairly assess every supplier before they award the work.

Unlike the private sector, the public sector marketplace is open to all, and decisions are made following rigid processes. Central government contracts over £10,000 and wider public sector contracts over £25,000 must be advertised publicly and allow any eligible suppliers to bid for the work. The merit of each bid will be evaluated using the criteria detailed within the original contract notice, the entire process is transparent.

The benefits here are that you have a lot more awareness of what is happening in the market and can proactively bid for work rather than waiting for it to come to you. It also means that whether you are a big company or a small business, if you can fulfil the contract - you have a fair chance of winning the work.

The public sector wants to work with SMEs

As detailed above, private sector buyers are under no obligations to make potential work available to every eligible supplier. They can inform whoever they want and could go with businesses they know or those who appear on the first page of an internet search. Smaller businesses are at a disadvantage because they may not yet have a reputation, can be harder to find or overlooked due to bias.

The public sector has none of these issues for SMEs. The entire market is informed of contract opportunities at the same time, and anyone can express an interest. What tips the scales even more in favour of smaller businesses is the UK government’s goal of having at least 33% of all public sector contracts go to SMEs. They even introduced policies which allow buyers to reserve contracts specifically for small businesses or restrict bidding to businesses within specific regions – preventing competition from larger companies based elsewhere.

In the public sector marketplace being a smaller company will not hold you back, and in some cases – it will give you an advantage.

They have very favourable payment periods

Payment periods within the private sector vary significantly. While you may set limits for your invoices to be settled, many buyers work to their own timescales. Some companies impose 90 or even 120-day payment periods, while others forget to pay on time and force you to waste time chasing them for payment. It can be incredibly difficult managing a business when you do not know when you will get paid.

You will not encounter this problem with the public sector. Across the board, the government has put in place a mandatory 30-day payment period. No matter what the job, however big or small, you will get paid within 30 days.

Imagine if every contract came with that guarantee – it would be a lot easier to take on more work or invest in developing your business further. By including some public sector work within your pipeline, you could better forecast your cash flow.

You don’t need to win price wars to secure contracts

It is common in the private sector for buyers to put out requests for pricing with no indication of budget and looking to achieve the lowest possible price. This can force businesses to sacrifice profits by going head-to-head in ‘race to the bottom’ price wars.

This is not an issue when bidding for public sector contracts, where Most Economically Advantageous Tenders (MEAT) is the chosen method of assessment. This means that even if a contract has a particular focus on price or quality, which will be stated in the documents, all elements of proposal will be evaluated and contribute to your final score.

The evaluation process is incredibly fair, and even if you cannot compete on price – you could beat your competitors in other areas. Social Value is incredibly important to the public sector now, and suppliers can make their bids stand out by demonstrating whole life value - tackling economic inequality, fighting climate change, creating equal opportunities, etc.

With public sector contracts, you know what you are bidding for and can play to your strengths.

You won't be left in the dark

Just because you have provided quotes or even fulfilled a contract, private sector buyers have no requirement to give you feedback. Meaning you miss out on vital information that could help you develop your offering and increase your chances of securing work elsewhere.

Public sector buyers always provide feedback and will respond to any further enquiries you may have. If you did not secure the work, you can find out how close you were and what you could have done better. Even if you win, you can find out what the buyers liked about your bid and use this information to improve your future offering.

Going for even just a handful of public sector contracts will provide you with a wealth of valuable information. The contracts clearly state what buyers are looking for, and additional feedback can be used to create strategies for delivering specific outcomes in both public and private markets.

How do I find public sector contracts?

There are hundreds of portals through which public bodies can advertise their procurement needs, and it would take a significant amount of time and effort to try and locate every opportunity relevant to your business.

Tenders Direct eliminates your need to search for tenders by collating every public sector contract and alerting you whenever relevant opportunities have been published. Our unique processes allow us to guarantee you will never miss a public sector notice. Use our category search to see what is available for your business, or try our alert service with a free 2-week trial.

How do I win work in the public sector?

As mentioned above, the evaluation process is very fair, most bidders let themselves down by not knowing what to include within their proposals. You must have a clear understanding of what contracting authorities are looking for and know how to make your bids stand out.

To improve your chances of success, we publish a wide range of bid writing guides on our blog , as well as running a range of training courses throughout the year.