How SMEs Can Overcome Challenges When Bidding to the Public Sector

The public sector in the UK spends an incredible £290 billion per annum with third party organisations. Most of this spend is awarded through competitive procurement exercises.

Some organisations, particularly Small and Medium Enterprises (SME businesses), are reluctant to engage with competitive procurement processes for a variety of reasons.

In this article, I will be discussing eight reasons why some organisations do not get involved with bidding to the public sector; why these reasons may be viewed as ‘barriers’; and ways for organisations to actually overcome these real (and sometimes perceived) hurdles:

1. Complex procurement processes – tendering can be seen as complex and some organisations are put off by what they view as complexity and bureaucracy when compared to their experience of winning work in the private sector. We have found from our experience and those of our clients, that the tender process is getting simpler. One big change was the standardisation of the tender pre-qualification process to minimise administrative burden for SMEs. In Scotland, public sector bodies use the European Single Procurement Document (ESPD), with the Selection Questionnaire (SQ) being used in England.

2. Difficulty identifying opportunities – these opportunities are not always advertised clearly. Some organisations do not know about them, or how to find out about these types of opportunities, for example, where they are advertising the tender opportunity. There is increasing transparency around where contracts can be found. There are various websites out there where organisations can find and pursue public sector contracts. From January 1st 2021, Find a Tender hosts qualifying contracts from across the UK public sector.

3. Meeting qualification criteria – due to the public sector’s strict requirements, some organisations find it difficult to meet the mandatory qualification criteria which public sector buyers often require. These requirements are often applied in accordance with the size, scope and complexity of the contract. Organisations should target contracts that they can either meet comfortably or can evidence their ability to strengthen in order to deliver it.

4. Lengthy process is time consuming – public sector bids can take considerable resource and some organisations do not have the time or the resource to work on a bid. Public sector buyers can also take a lot of time to award a contract. It can be a further amount of time before the contract starts. The bidding process does get a bit easier the more bid experience that an organisation. They can begin to build a bid library of content that can then be tailored for specific opportunities. It is also important to view the resource required to win a contract in proportion to the value of the contract.

5. Bad experiences may cause aversion – some organisations may have had a difficult experience of not winning or scoring highly, having committed time and money and not getting the desired result. It is important to view bids as a valuable learning exercise to find out about potential clients, markets and services.

6. Perceived size disadvantage – the size of competitors may be seen as a barrier because some organisations may feel that they are too small to compete credibly against large regional or national player. This is actually not true, as the public sector see SMEs as favourable options because they can get a more personable and responsive service than from some larger organisations. It is important that organisations play to their strengths and highlight these in any bid.

 7. Feeling that the incumbent always wins – we are often approached by organisations who feel that the incumbent contractor, provider or supplier already covering the contract is in a much stronger position when it comes to re-tendering. This could be due to a strong existing relationship, more experience or price-point understanding. Research shows that incumbents tend to win less than 50% of retenders. A high quality bid submitted alongside a competitive price is very hard to beat so do not feel put off that the incumbent is already guaranteed the contract. We also get incumbents coming to us who are worried that they may lose the contract!

8. Unprepared for bidding – if the organisation is busy delivering core services, decision-makers may feel that the company does have a skills gap around bidding. They may have very a successful business, but they are not a bid writer or bid manager and may not understand the bid landscape. Smaller organisations cannot afford to maintain a standing team of Bid Directors, Managers, Writers and Executives or often even a single Bid role within their organisation. The antidote for this problem is the bid consultancies and freelance professionals who are out there. We can help remove the anxiety and inexperience around bidding for public sector contracts.

To discuss how your organisation can start bidding for and winning public sector contracts, please contact AM Bid here