The UK public sector spends over £284 billion buying goods and services from suppliers. It is a huge market but there’s still a misconception that only large suppliers can compete for this work. In recent years there has been a drive for public sector organisations to award contracts to SMEs, with the UK government targeting that at least £1 in every £3 should be spent this way. SMEs bring diversity and innovation to the government’s supply base. This SME Tender Support Guide is designed to provide information and help innovative businesses trade with the public sector.
This guide provides introductory information for SMEs new to procurement, bids and tenders and will:
- highlight the advantages of trading with the public sector
- give you a greater understanding of how public sector procurement works
- give you practical ways to get started
What makes up the Public Sector?
The public sector is made up of numerous organisations, including:
- Central Government – Departments and their Agencies
- NHS – Hospitals Trusts, Clinical Commissioning Groups, Ambulance Trusts, GP Surgeries and all other state run/funded health bodies
- Local Government – Councils, Police, Fire and other Local Authority Services
- Further and Higher Education – Colleges and Universities (post-16 Education)
- Schools – Local Authority, Independent and Academy Nurseries, Primary and Secondary
- Private/Charity Run Public Services – Community Interest Companies, Care Homes, Housing Associations, Health and Social Care
It is common for smaller organisations to work together to source their requirements. Purchasing consortia and frameworks which are explained below facilitate and enable that collaboration.
Why trade with the Public Sector?
As a supplier there are several reasons that make the public sector an attractive customer:
- Guaranteed payment – they’re required by law to pay their invoices within 30 days.
- Stability – the public sector isn’t going to go out of business
- Transparency – as publicly funded organisations, they have to adhere to strict guidelines surrounding fairness and transparency. All bids have to be assessed to the same published criteria irrespective of who the supplier is. Bidders have the legal right to their score, feedback and an understanding of how close they were to competitors
- Fairness – your bid remains confidential between you and the buying organisation
- Long-term contracts – contracts are often put in place for 2, 3, 4, even 5 years. A contracting authority doesn’t undertake the tendering process lightly, they will have to have justified the process internally so there will be a commitment to the contract
- Reputation – public sector contracts make great case studies to quote, and give both private and public organisations confidence in your capabilities
Find out more about how your company can trade with the public sector in our SME Tender Support Guide: