3 Different Types of Agreements Used By The Public Sector
The public sector uses a number of different agreements when contracting with suppliers. Some of these make it much easier for solo and small business owners to become suppliers to the public sector.
The first of these is a single supplier contract. This is used when the buyer knows the quantity of product (goods, services and works) and over how long they require them. So for example, Authority X wants to purchase 50 bottles of hand sanitiser every month for the next 2 years.
In some cases, the buyer knows that they have a need, which may be on a repetitive basis. However, they might not fully understand the full extent of what they require to purchase. For example:
· How long the need will last
· How many suppliers may be required to provide a solution.
In this case the buyer may publish a Framework Agreement, either on its own or in collaboration with other buyers. This is an arrangement where a buyer selects suppliers and sets the terms and prices for a period in advance (often up to 4 years in the future), select suppliers and then calls on those suppliers to deliver the specification when required.
Framework agreements are commonly set up to purchase products required on a routine basis like:
· Construction
· Maintenance
· Various forms of consultancy
· Office and IT supplies
· Facilities operations and so on.
There is never a guarantee of work even if you are part of a Framework Agreement. However, being awarded a place on a framework is a sign to others that your business is a key player within your industry.
The third type of agreement we’re looking at is a Dynamic Purchasing System. This is very similar to a framework agreement with some key differences. We’ve outlined these below:
Dynamic Purchasing System
Suppliers can join at any time
No direct award of contracts - all suppliers who have been successfully placed on the Dynamic Purchasing System are invited to apply for each contract.
Pricing is determined at contract award stage
Unlimited suppliers may join
Framework
Suppliers can join within a limited application window. This will normally be at the initial tender stage and will normally be within a 4 - 6 week window.
Buyers can direct award from the framework (sometimes)
Pricing is fixed at the point of tender for the term of the tender.
The number of suppliers is decided before the procurement.
The increasing use of framework agreements and dynamic purchasing systems are opening the market to solo and small business owners.
If you are interested in exploring how you can position your business to sell to the public sector then get in touch for a no obligation chat.
4 different notices you will find on procurement portals
Once you’ve started to look for opportunities to buy from the public sector you will find there are different types of notices published. This can be confusing but once you have started using the portals you will become familiar with each type of notice. Within this article we outline 4 different types of notice and the information you should find in the notice.
Prior Information Notice
A Prior Information Notice (or PIN) can be used by public sector organisations to advertise that they will soon be looking to buy the goods, services or works outlined. This can be published up to twelve months in advance and can be used to reduce the timescales of the tender, when published. They will contain some basic information regarding the goods, services or works to be purchased. These are:
1. Details of the buyer
2. What they want to purchase
3. What the contract value is likely to be
4. The type of contract
5. Scheduled date for the start of the award procedure
PINs are usually followed up by a contract notice but under certain circumstances can be used as a call for competition. If the PIN is being used in this way this will be clearly stated within the PIN and you must register your interest to receive updates.
We would always recommend registering your interest in these notices, if you can. This means you can access additional documentation, receive updates and be notified of any events being held in connection with the opportunity.
Contract Notice
A contract notice is an advert notifying potential suppliers about a contract opportunity. It contains the following information:
1. Name and contact details of the buying organisation
2. Who will be entitled to use the contract (particularly if being placed for a group of public sector bodies)
3. The type of contract on offer (supplies, works or services)
4. The main commodity being procured
5. Any other items required which aren’t covered by the main object category.
6. The tendering procedure that will be followed
7. The criteria that suppliers will have to meet
8. Whether there is an alternative way of meeting the requirements of the contract notice.
9. The total quantity or scope of the contract (one time or many? A one-time service or an ongoing package?)
10. The economic, financial and technical capacity that will be expected of successful bidders.
This should be enough information to help you decide whether to bid for the opportunity or not.
Contract Award Notice
A Contract Award Notice is used by public sector organisations to formally advertise that a contract award has been made. All Scottish public bodies must publish their Contract Award Notices on Public Contracts Scotland for contracts valued above £50,000 for goods and services. They will contain:
1. Details of the buyer
2. If applicable, joint procurement details
3. The date the contract was awarded
4. The award criteria
5. The number of offers received
6. The name and address of the successful supplier(s)
7. The scope of the contract – either by value or volume
8. Whether the contract was split into lots.
Contract Award Notices are a good source of market information. The information you identify can be used to investigate current and likely future contract requirements.
Quick Quote Award
Similar to Contract Award Notices Quick Quote Award Notices contain market intelligence which can inform how you bid in the future. If the value of the contract is less than £50,000 there is no requirement to publish these but some bodies choose to. These notices should contain:
1. Details of the buyer
2. Details of what the buyer purchased
3. Value of contract
4. Number of tenders received
5. Name of successful supplier(s)
As you can see there are a number of different notices used by public bodies to advertise opportunities or to notify the outcome. Each of these notices contain market intelligence that can be invaluable when developing and updating a procurement strategy.
If you are interested in exploring how you can grow your business by selling to the public sector get in touch.
How to find opportunities to sell to the public sector
You’ve decided that you want to sell to the public sector. Finding contracts can be like finding a needle in a haystack. Research shows there are 1627 active sites with details of UK-based contract notices.
In Scotland all opportunities must be advertised on the Public Contracts Scotland portal.
In England details of all opportunities worth over £10,000 must be published on Contracts Finder – however the opportunities are administered (and advertised on) a range of different portals.
In Wales details of opportunities can be found on the Sell2Wales Portal and in Northern Ireland on the eSourcingNI portal.
Some of the English portals are:
Contracts Finder – contracts over £10,000
DEFRA eSourcing Portal
NHS Supply Chain Portal
South East Business Portal
YOR Tender Portal
Chest – North West of England, including Manchester, Liverpool and Leeds.
North East Procurement Organisation Portal
London Tenders Procurement Portal
Before looking for contracts (running searches) it is important to fully understand what your business is capable of providing. This should include:
What are your strengths?
What are your weaknesses?
How can you fill those gaps?
What is your overall business strategy?
Taking the time to understand your own business first will help you to identify the areas in which you want to be working (geographically) and therefore which tender portals to register on. And then in turn which contracts will help you meet your growth strategy. If you need help to draw up your procurement strategy or would like a chat about all things selling to the public sector then get in touch.
Public Sector Spending Limits and What They Mean
Once you start looking for contracts you might hear the terms ‘threshold’ and ‘standing orders’. What do these mean? Do these restrict what you can apply for? In this article we tell you about thresholds and standing orders and what they mean to you selling to the public sector.
Thresholds
Any public sector organisations publishing a contract opportunity over a certain value (known as a threshold) must advertise it in the OJEU. The OJEU is the Official Journal of the European Union. All opportunities above the OJEU threshold must be published here. This is likely to change after the Brexit transition period. There are different thresholds in place depending on the type of contract being awarded and the sector being advertised for. Current thresholds can be found here.
These values exclude VAT and relate to the full length of the contract.
Standing Orders
Public sector bodies have Standing Orders or Contract Procedure Rules which provide staff with a clear governance framework when buying goods, services or works for the public sector.
Commonly for Scottish Local Authorities standing orders (currently) state that for contracts under the OJEU threshold must be dealt with in the following ways:
For contracts between £16,500 and £50,000 Quick Quotes are used
At least 4 competitive quotes must be obtained using Quick Quotes
As a minimum they must invite:
2 SMEs with their principal place of business within the relevant local area or
New supplier the Council has not used before or
A Supported Business (where they can)
For contracts valued under £16,500 it is recommended they obtain 4 quotes including:
SMEs with principal business in the local area or
Supported Business or
New Supplier.
Read our previous blog which gives you information on Quick Quotes and Supplier Finder Profiles.
If you’d like to speak to one of the team about selling to the public sector and positioning yourself to grow your business by winning public sector contracts get in touch.
What do the public sector buy?
We speak to business owners who have never considered selling to the public sector. One reason is that they do not think the public sector would buy from them.
The public sector is massive. In 2019 it is estimated the UK Government spent £644.5 billion, local authorities £176.5 billion. This can be split down to the following functions/departments:
Pensions £161.1 billion
Healthcare £162 billion
Education £91.8 billion
Defence £50.3 billion
Welfare £126.3 billion
Protection £33.3 billion
Transportation £34.7 billion
General Government £16.9 billion
Other spending £117.9 billion
Everything that public sector organisation’s needs, from pencils to buildings to care at home services, has to be purchased.
The public sector groups what they have to buy into goods, service and works.
We’ve had a look at some the contract notices and contract award notices which have been published on the Public Contract Scotland portal this year and found a huge range. Some of what the Scottish Public Sector have purchased this year are:
Search Engine Optimisation
Demolition works at council yard
Provision of Occupational Health and Wellbeing Services
Creative Services
Purchase of Installation of Modular Buildings
Lease Cars and Associated Service
Peer Support Services
Document Solutions Centre Print Devices
Services to Support Educational Attainment
Core Banking Services
Digital Signage
Office Refurbishment
Flooring Contract.
All public sector contracts equal to or above £50,000 (excluding VAT) for goods and services must be advertised (in Scotland on Public Contracts Scotland). Some public sector bodies also use PCS to contact suppliers directly to invite quotes (Quick Quotes) for opportunities below this value.
If you are interested in selling to the public sector get in touch for a chat about the first steps to take.
7 Reasons why winning public sector contracts is achievable for SMEs (updated)
Are you an SME who wants to grow but you’re unsure of how to secure public sector contracts? Are you unsure of the tendering process and think you should leave it to bigger companies?
Are you an SME who wants to grow but you’re unsure of how to secure public sector contracts? Are you unsure of the tendering process and think you should leave it to bigger companies?
Often larger contracts go to large companies. However, this is happening less and less. If you are an SME wanting to grow don’t let this discourage you. In our experience there are more and more contract and tender opportunities open to SMEs.
For larger contracts Contract Notices can be a source of information for smaller companies. They can give you a clue as to who to approach for partnering or subcontracting opportunities.
16,250 new public sector business opportunities were advertised last year (2018/19). Of these 77% were Quick Quotes. Most of these contracts were valued less than £50,000. Find out more about how to be invited to apply for Quick Quotes here.
Around 6 out of 10 public sector contracts in Scotland are now awarded to small and medium businesses.
In 2017/18 of the 16,250 contracts advertised through Public Contracts Scotland, 14,709 were awarded to SMEs, of which 12,089 were Scottish businesses.
The Procurement Reform Scotland Act commits public sector bodies to ensuring their procurement practices are open to SMEs.
Public bodies now have the legal duty to pay supplier invoices within 30 days. In fact in Scotland 99% of public sector invoices are paid within 10 working days (in 2017/18).
There is a duty on the public sector to facilitate the involvement of SMEs, third sector bodies and supported businesses in the procurement process.
Large contracts can be split into smaller lots. This creates even more opportunities, particularly for SMEs.
All of this means that public sector contracts can be achievable for you and your business. Get in touch for a no obligation chat about how tendering and winning public sector contracts are achievable for you and your business.
Myths of Public Sector Procurement v the Reality
You want to grow your business but you’re one of many, possibly in a saturated market. Have you thought about selling to the public sector?
Yes, you’ve considered it but one (or more) of the following apply:
· “My company is too small to win a public sector contract”
· “I don’t know where to begin”
· “Contracts always go to the same suppliers”
In this article we are tackling some of the myths around winning public sector contracts and the reality of this. We will show you that it is achievable for you to sell to the public sector.
Myth 1
The public sector only wants to buy from bigger businesses, not SMEs and definitely not solo businesses.
The reality
The government has changed the way it buys goods and services in order to help SMEs and solo business owners to bid for more contracts.
Some of these changes:
1. The public sector must pay supplier valid invoices within 30 days or less. In fact in 2017/18 in Scotland the public sector paid over 99% of invoices within 10 working days.
2. A simpler application process has been established. This includes the selection questionnaire (in England) and ESPD (in Scotland) being abolished for contracts below EU thresholds.
3. Large contracts can be split into smaller lots to create even more opportunities.
4. Increased use of frameworks.
5. In Scotland public bodies are required to advertise all opportunities on the Public Contracts Scotland web portal. This makes it easier for SMEs to find contracts.
Top Tip
Before committing to tendering, its useful to fully understand what your business is capable of providing.
Questions to ask (and answer)
What are your strengths?
What are your weaknesses?
How can you fill those gaps?
What is your overall business strategy?
Once you understand your strategy you can properly assess opportunities for selling to the public sector.
Myth 2
The lowest price will always win a contract.
The reality
Price cannot be the sole reason for awarding a contract. Instead most bids are awarded to the Most Economically Advantageous Tender (MEAT) which takes account of both the price and quality. The percentages of each will be outlined within the Evaluation Section of the tender.
Top Tips
Make sure you understand the evaluation criteria – if you do not make sure you ask questions about this (see myth 4).
Think about where you can add real value to the buyer’s specification.
What is important to the buyer?
Good business intelligence allows you to better understand the market and in turn pinpoint opportunities.
The key thing to consider is what will add value for the buyer?
Myth 3
Contracts always go to the same suppliers
The reality
Whilst an existing (or incumbent) provider should have a good chance of retaining their contract, authorities do not always award to existing contractors.
Public procurement is a transparent system with a robust audit trail.
Top Tip
Don’t just look for notices buying your goods or services – look for other opportunities where you can seek business. This could be by supplying those who win contracts.
Myth 4
You cannot contact/engage with buyers during the procurement process.
The reality
You can contact the buyer and in fact have the right to formally contact the buyer in order to fully understand the contract.
During the procurement process there will be a way in which you can ask questions. Normally this is through the portal where the notice is being administered but can sometimes be by email. The tender documentation should tell you how to raise queries. Clarification will be anonymised and shared with all interested parties.
You can ask:
Scope of the contract
How the tender will be scored
Confirm the tender procedure
What the value of the contract is over the full contract life cycle.
And more.
Top Tip
Make use of the clarification function. Ensure you ask questions prior to the deadline. Review the questions being asked by others.
Myth 5
Once you’ve completed one tender, you can cut and paste the content for future bids
The reality
Every tender submission is not the same.
You need to think about what the buyer is looking for, what could they benefit from that is not detailed within the contract notice.
Even when a question looks identical it could be the specification (what the buyer is looking for) differs from your previous submission.
There may be information within previous submissions that you can use in future submissions but never lift a response and paste it into a new opportunity. Review the tender documentation and consider what you can offer in response.
Remember….
The government is focused on increasing opportunities for SMEs
Price is not the only factor considered when awarding a contract
Contracts are not always awarded to the same suppliers, they will go to the best supplier
You should engage with buyers as early in the process as possible. This will help you to understand what the buyer is looking for and how you can deliver it.
You cannot cut and paste previous responses. Each response should meet the requirements of the buyer.
Overall the government (and therefore the public sector) wants to buy from small and medium sized enterprises (SMEs). The public sector has changed the way they buy goods and services to make it easier for SMEs bid for public sector contracts. These include:
Simpler application processes
Supplier will be paid in 30 days. Valid invoices paid in 30 days or less.
By 2022, the government plans that one third of its spend on goods and services will be with SMEs, either directly or indirectly or through the supply chain.
Now you know it is achievable for you to win public sector contracts. Contact us to arrange a procurement strategy session and understand the next steps for you to take.
Single most important piece of advice for SMEs who want to sell to the public sector
So, you are an SME wanting to work with the public sector. Its likely that you are unsure of how to go about it or you have tried and been unsuccessful. Within this blog we outline our single best piece of advice we could give.
So, you are an SME wanting to work with the public sector. It’s likely that you are unsure of how to go about it or you have tried and been unsuccessful. Within this blog we outline our single best piece of advice to help you win bids or tenders.
First of all why is it worthwhile for SMEs to sell to the public sector?
Well in 2018/19
14960 tendering opportunities were advertised in Scotland
92% of these opportunities were classed as low value. Low value are contracts worth less than £50,000.
12,502 of the opportunities published were Quick Quotes.
Quick quotes are requests for tenders below £50,000. The public authority can use the procurement portal to search for suppliers. They will use the information found in the Supplier Finder Profile to choose suppliers and invite them to tender.
We’ve recently been working with suppliers to improve their supplier finder profile. We have identified the following ways that profiles can be improved:
Make sure your profile is visible or public. We have found that some businesses have no profile, or it is set to private.
It is not clear where the business is based. Often public sector organisations must invite one local SME. Some buyers report profiles are not clear as to where the business is based.
There is little or no description within the company description box. This is your opportunity to tell potential buyers what makes you standout from your competitors, what you specialise in and what your business does.
Buyers must invite a minimum of 5 suppliers, so make sure your profile clearly sets out what you do and what you can offer.
If you are an SME who wants to sell to the public sector, or you want to know more about public sector contracts or discuss how to make your profile standout, please do book a call.
Join Shiona from BDS and Rhonda Morris from RLM Copywriting on 12 September at their workshop. They will help you develop your Supplier Finder Profile and understand more about public sector contracts. Book your place here.
Are you a therapist, counsellor, mentor or advisor wanting to grow their business in 2019?
It's that time of year where social media is filled with people sharing their goals or resolutions for the year. Social media feeds are full of goal setting opportunities. Whether you’ve set goals or not its likely that you are looking to grow your business in 2019.
It's that time of year where social media is filled with people sharing their goals or resolutions for the year. Social media feeds are full of goal setting opportunities. Whether you’ve set goals or not its likely that you are looking to grow your business in 2019.
Are you a therapist, counsellor, mentor or advisor who would like to work with children and young people?
Do you want your grow your business in 2019?
Do you want to work with a sector that pays over 99% of valid invoices within 10 working days (imagine the cashflow)?
If you answered ‘yes’ to the above questions. Have you considered securing public sector contracts to grow your business in 2019?
I recently worked with a coach to secure two public sector contracts which will ensure his business grows in 2019 and beyond.
To do this I met with coach to determine where his business was and, the direction he wants to take his business in the next year. We then discussed how the public sector award contracts and, how he can position himself to win these contracts.
Having carried out some research prior to meeting I was able to outline a contract that I felt his business was well fitted to bid for. We also discussed further potential funding pots, held by local authorities, that his business may be able to access.
Serdendity at work a second opportunity was quickly published.
Both of these opportunities were tender opportunities advertised on the Public Contract Scotland web portal. I drew up a summary of both tenders outlining the requirements of each contract, deadlines, value of contract, how the contract is administered and pertinent dates. This ensured he was informed to decide whether to progress these opportunities or not. He decided to submit each tender.
Working closely, we discussed what information was required to be submitted and how this information should be presented. We discussed how the service should be priced to remain competitive. I was able to advise on both the process and the terminology used by the local authority.
Both tenders were submitted, and he was successful in both and is looking forward to working with both local authorities in 2019 and beyond.
If you are interested in learning about what contract opportunities with the public sector are out there for you get in touch. We’d be happy to arrange a no-obligation call to discuss how you can use public sector contracts to grow your business in 2019.
If you are a coach, mentor or advisor don’t delay because there is a current opportunity for you.
7 Reasons why winning public sector contracts/tenders is achievable for SMEs
Are you an SME who wants to grow but you’re unsure of how to secure public sector contracts? Are you unsure of the tendering process and think you should leave it to bigger companies?
Are you an SME who wants to grow but you’re unsure of how to secure public sector contracts? Are you unsure of the tendering process and think you should leave it to bigger companies?
Often larger contracts go to large companies. However, this is happening less and less. If you are an SME wanting to grow don’t let this discourage you. In our experience there are more and more contract and tender opportunities open to SMEs.
For larger contracts Contract Notices can be a source of information for smaller companies. They can give you a clue as to who to approach for partnering or subcontracting opportunities.
Nearly 8 out of 10 public sector contracts in Scotland are now awarded to small and medium businesses.
In 2017/18 of the 22,000 contracts advertised through Public Contracts Scotland, 17,500 were awarded to SMEs, of which 13,500 were Scottish businesses.
The Procurement Reform Scotland Act commits public sector bodies to ensuring their procurement practices are open to SMEs.
Public bodies now have the legal duty to pay supplier invoices within 30 days. In fact in Scotland 99% of public sector invoices are paid within 10 working days.
There is a duty on the public sector to facilitate the involvement of SMEs, third sector bodies and supported businesses in the procurement process.
Large contracts can be split into smaller lots. This creates even more opportunities, particularly for SMEs.
All of this means that public sector contracts can be achievable for you and your business. Get in touch for a no obligation chat about how tendering and winning public sector contracts are achievable for you and your business.
10 top tips for winning tenders
Following on from our blog about how to make sure your bid is the winning bid I I thought it would be useful to share my 10 top tips for preparing winning tenders. These are the 10 things we make sure we do in relation to all bids.
Following on from our blog about how to make sure your bid is the winning bid I I thought it would be useful to share my 10 top tips for preparing winning tenders. These are the 10 things we make sure we do in relation to all bids.
Tendering for new business takes up time and resources. At BDS we are constantly looking for ways to improve the success rate for tendering. Here are ten valuable tips to help your business to win more tenders.
1. Read the tender documentation carefully
Make sure you read the Invitation to Tender documentation. It is likely there will be: contract notice; specification; pricing schedule; contract and instructions about how the tender is to be completed.
2. Make sure you meet the minimum requirements to tender
The minimum requirements will be laid out within the contract notice. This will detail insurance requirements, any requirements of minimum turnover and any memberships of trade or professional registers required.
3. Understand how the tender will be scored
After reading the evaluation methodology make sure you understand how the tender will be scored. This will normally be split into commercial (pricing) and quality. However when prices are set by the buyer the scoring will be 100% quality.
The public sector does not buy solely on price but will look for the most economically advantageous tender. This means that quality will be considered alongside price.
If you are not clear how the tender will be scored ask using the Q&A (Clarification) function.
4. Make sure you understand all tender requirements
There can be a lot of technical information. It is essential you understand what the specification of the goods or services to be delivered and that you are confident you can deliver this.
If you do not understand then ask a question. Again there is a facility to ask questions within the tender portals, make use of it. Also make a point of reviewing the responses to questions other people have posed.
5. Don’t assume those evaluating the tender know about you and your business
It may be that you are well known to the tenderer. They can only mark/assess you on what you have submitted in your tender responses.
6. Be realistic in your tender responses about how you will perform the contract
It is really important that you are confident you can fulfill the requirements of the contract. It could damage your business in the long term if you are awarded a contract that you cannot deliver. However, if you are delivering on a smaller scale and are capable of up-scaling, go for it.
7. Within your tender responses include and make reference to relevant examples
By including examples of how you already do this you are demonstrating your ability. This is one of the key aspects the tender is likely to be scored on.
8. Within your tender responses only include information you have been asked to provide
This means you should not include general promotional literature. Don’t include leaflets, brochures, hyperlinks, etc., unless you are asked to. These are unlikely to be considered as part of your bid.
9. Ask someone who has not been involved in the tender to sense check your response
Writing your response will take a considerable amount of time. It is likely that you will live and breathe it during this time. It is important that someone who is removed from the process to check your responses make sense and that you are answering the questions asked. This is particularly important if you cut and paste.
10. Don’t miss the submission deadline for the tender
Make sure you are clear what the submission deadline is. The deadline will be published on the contract notice. Normally deadlines are 12 noon but recently I was working on a tender that 4 pm deadline. You will be unable to submit after the deadline so make sure you know when that is.
It is recommended that you submit a response ‘in good time’. Recommendations vary from 72 hours prior to deadline to 24 hours, however often we’re working very close to tender deadlines.
Next time you are tendering remember these top tips. Get in touch to discuss how we can help you with your next tender submission.
8 reasons to bid for public sector contracts
Bidding for a tender can be a daunting and complicated process. But there are many reasons to try. Here are a few poignant statistics that we have gathered.
Bidding for a tender can be a daunting and complicated process. But there are many reasons to try. Here are a few poignant statistics that we have gathered.
Almost 80% of public sector contracts awards go to small and medium enterprises (SMEs).
In 2017/18, 22,000 contracts were advertised on Public Contracts Scotland with 17,500 being awarded to SMEs.
More than 75% of the 22,000 awarded contracts went to Scottish businesses.
The Procurement Reform Scotland Act went live two years ago, committing public sector bodies to ensuring their procurement practice is open to SMEs.
50% of public sector spend on procurement in the last financial year went to SMEs.
That 50% accounted for more than £5 billion.
In 2017/18, 15,400 new public sector business opportunities were advertised.
92% (14,168) of these opportunities were low value and of these 76% (11,715) were quick quotes.