A–Z of Public Procurement Terms Every SME Should Know
Below is your plain-English A–Z guide to key public procurement terminology — including what each term means and why it matters for your SME.
A
Award Criteria – The factors used to decide who wins a contract (usually quality, price, and social value).
Why it matters: Understanding how contracts are scored helps you focus your bid on what evaluators care about most.
Addendum – An official change or clarification issued after the tender is published.
Why it matters: Always check addendums to ensure your bid stays compliant with updated information.
B
Bid / Tender – Your formal offer to supply goods or services at a defined price and standard. Why it matters: Every public contract is awarded based on submitted bids — clear, compliant proposals are your gateway to success.
Bid Writing – The process of crafting persuasive and compliant tender responses. Why it matters: Well-written bids increase win rates. Register for Supply2Gov for help improving your submissions.
Buyer – The public body (e.g. NHS Trust, council, university) procuring goods or services. Why it matters: Knowing your buyer’s priorities allows you to tailor your proposal effectively.
C
Contract Notice – The official public announcement of a new contract opportunity.
Why it matters: These are published on government and private platforms like Supply2Gov, Contracts Finder, and Find a Tender.
Contract Value – The total estimated worth of the contract (including renewals or extensions).
Why it matters: It helps you decide if the opportunity fits your business size and resources.
CPV Codes (Common Procurement Vocabulary) – Classification codes used to categorise contracts by product or service type.
Why it matters: CPV codes help you find relevant tenders faster — Supply2Gov lets you filter opportunities by code and region.
Consortium Bid – A joint submission by multiple suppliers combining skills or capacity.
Why it matters: Great for SMEs lacking scale — you can bid together for larger contracts.
Compliance – Meeting all the mandatory requirements of a tender.
Why it matters: Even a perfect proposal can be disqualified if it’s non-compliant.
D
Deadline – The final date and time to submit your tender response. Why it matters: Late submissions are automatically rejected — always plan to upload at least a day early.
Dynamic Purchasing System (DPS) – A flexible online procurement system where new suppliers can join at any time. Dynamic purchasing systems (DPSs) are open, electronic procurement methods designed to give buyers access to pre-qualified suppliers and support SMEs. Why it matters: Perfect for SMEs — unlike frameworks, DPSs remain open for new entries throughout their duration. Learn more: Supply2Gov
E
Evaluation Criteria – The rules buyers use to assess and score tenders (often split between price and quality).
Why it matters: Understanding the criteria allows you to balance your pricing strategy and strengthen your qualitative responses.
ESPD (European Single Procurement Document) – A self-declaration form confirming you meet selection and exclusion criteria.
Why it matters: Streamlines compliance for EU and Irish tenders.
Expression of Interest (EOI) – A preliminary step showing you want to participate in an upcoming tender.
Why it matters: Registering early ensures you get updates and access to full tender documents.
F
Framework Agreement – A long-term contract with pre-approved suppliers for repeat purchasing over several years.
Why it matters: Excellent for SMEs — once you’re on a framework, you can receive ongoing mini-competitions without reapplying.
Financial Standing – The assessment of your company’s financial stability and turnover.
Why it matters: Buyers check this to ensure you can deliver the contract’s scale and value.
G
Government Procurement Card (GPC) – A payment card used by public bodies to simplify smaller purchases. Why it matters: Startups can benefit from quick, low-value contracts paid via GPC schemes.
Goods and Services – Essential items acquired by public sector organizations through procurement processes, including both tangible products (goods) and intangible offerings (services). Considering goods and services together is important for planning procurement strategies, as it ensures comprehensive evaluation of needs, environmental impact, and lifecycle costs.
I
Invitation to Tender (ITT) – A formal request from the buyer asking suppliers to submit a full bid.
Why it matters: Understanding the ITT structure helps you respond accurately and avoid missing key information.
Insurance Requirements – Minimum insurance levels (public liability, professional indemnity, etc.) required to bid.
Why it matters: Essential compliance; keep certificates up to date and ready to upload.
K
Key Performance Indicators (KPIs) – Targets you must meet if you win the contract (e.g., delivery time, quality standards). The Kraljic matrix, introduced in a 1983 article in the Harvard Business Review, is often used to inform procurement strategies and performance measurement. Why it matters: Build evidence of meeting KPIs in past projects to strengthen your bid.
L
Lots – Divisions of a larger contract into smaller, more manageable sections.
Why it matters: SMEs can bid for one or more “lots” that fit their capacity — part of the Procurement Act’s SME inclusion strategy.
Life Cycle – The entire duration of an asset or product, from development and acquisition through operation, maintenance, and eventual disposal.
Why it matters: Understanding the life cycle is crucial for calculating total costs (life cycle costing or whole life costing) and making informed procurement decisions that optimize value and expenditure.
Local Authorities – Public sector organizations, such as councils, that act as procurement entities within Scotland.
Why it matters: Local authorities play a key role in policy development, contract management, and implementing innovative procurement practices that align with social and environmental objectives.
Local Businesses – Suppliers and companies based within a specific region or community.
Why it matters: Public procurement strategies often aim to support local businesses, promoting economic growth, community engagement, and regional development by providing opportunities for local suppliers.
M
MEAT (Most Economically Advantageous Tender) – The evaluation principle balancing price and quality to identify best overall value. Why it matters: You don’t need to be the cheapest; show strong quality, innovation, and social value to score higher. Explore: Supply2Gov
Mini-Competition – A smaller competition run under a framework agreement. Why it matters: Allows ongoing work opportunities once you’re an approved supplier.
Medium Sized Enterprises – Businesses that are larger than small enterprises but not as large as major corporations, often referred to as SMEs. Public procurement systems, especially adaptive frameworks like Dynamic Purchasing Systems (DPS), are designed to include and support medium-sized enterprises by removing barriers, promoting fair access, and encouraging local economic growth. Why it matters: These frameworks help medium-sized enterprises compete for public contracts, fostering diversity and innovation in supply chains.
N
Notice Period – The time between publication of the tender and the submission deadline.
Why it matters: Short notice periods require readiness — having your compliance documents prepared in advance saves stress.
New Tender – A new tender process is required when significant changes to procurement requirements occur, going beyond minor amendments or supplements. This ensures compliance with procurement procedures and gives all potential suppliers a fair opportunity to respond.
Non Departmental Public Bodies – These are organisations that operate independently of ministerial departments but are still part of the UK government. Procurement policies and social value initiatives apply not only to central government departments and their agencies, but also to non-departmental public bodies, ensuring they are included in procurement regulations.
P
PQQ (Pre-Qualification Questionnaire) – A form assessing supplier suitability before the main tender stage. Why it matters: Completing this correctly is your gateway to the full tender.
Procurement Act 2023 – The law reforming UK public procurement to make it more transparent, efficient, and SME-friendly. Why it matters: Ensures fair competition and faster processes for small businesses.
Procurement Process – The series of steps and methodologies involved in sourcing, approval, and supplier engagement, including cycles like source-to-contract (S2C) and procure-to-pay (P2P), to ensure efficient and transparent acquisition of goods and services. Why it matters: Streamlines procurement activities and helps organizations achieve best value.
Public Sector Organisations – Government bodies and authorities responsible for procuring goods, works, and services, often using frameworks like Dynamic Purchasing Systems (DPS) to meet their specific requirements and policy goals. Why it matters: Their procurement choices drive innovation, transparency, and local supplier engagement.
Public Sector Buyers – Individuals or teams within public sector organisations who manage procurement processes and frameworks, ensuring compliance with legislation and alignment with public policy objectives such as social responsibility and innovation. Why it matters: Their decisions shape supplier opportunities and ensure procurement meets public needs.
Public Sector Contracts – Agreements between public sector organisations and suppliers to deliver goods, works, or services, playing a crucial role in maximizing procurement budgets and delivering value through government transactions. Why it matters: Winning these contracts can be transformative for suppliers and communities.
Procure Goods – The process of sourcing and acquiring products through structured procurement frameworks, such as framework agreements and DPS, from pre-approved or suitable suppliers. Why it matters: Ensures public sector organisations obtain quality goods efficiently and compliantly.
Purchase Price – The cost paid for goods, works, or services in procurement, factoring into total cost analysis, negotiations, and contract evaluation. Why it matters: Accurate purchase price assessment is essential for budgeting and value for money.
Potential Suppliers – The pool of qualified or eligible vendors who can participate in procurement processes, such as DPS, to meet legislative, economic, or operational goals. Why it matters: Engaging a diverse range of potential suppliers increases competition and innovation.
Positive Impact – The beneficial effects organizations have on society and the environment through procurement, including measurable outcomes like social value, community engagement, and environmental benefits. Why it matters: Demonstrating positive impact can enhance bid success and deliver wider community benefits.
Public Procurement – The process through which government and public bodies buy goods, works, and services. Why it matters: A £300+ billion annual market — open to businesses of all sizes.
Q
Quality Criteria – The qualitative aspects of a bid, such as innovation, customer service, or sustainability.
Why it matters: Quality often carries 60–70% of the total evaluation score.
R
Request for Quotation (RFQ) – A simplified version of a tender used for low-value contracts. Why it matters: Great entry point for startups — shorter forms and faster decisions.
Return Deadline – The same as submission deadline; the time your tender must be submitted. Why it matters: Late = disqualified. Always plan to upload early.
Raw Materials – The basic substances or components used in manufacturing processes. In procurement, raw materials are a major cost driver, influencing volatile spend, operating expenses, and supply chain planning. Effective management of raw materials is crucial for controlling costs and ensuring a stable supply chain. Why it matters: Understanding raw materials helps optimize procurement strategies and manage overall costs.
S
Selection Questionnaire (SQ) – A streamlined version of the PQQ under the Procurement Act 2023.
Why it matters: It’s your chance to prove capability, compliance, and financial stability.
Social Value – The additional community, environmental, or economic benefits your contract will deliver.
Why it matters: A legal requirement in most UK tenders — SMEs can shine by showing local impact.
Learn more: Register for Supply2Gov
Specification – The detailed description of what the buyer needs.
Why it matters: Read it carefully — it defines what your bid must deliver.
Standstill Period – A mandatory pause (usually 10 days) before final award.
Why it matters: Allows unsuccessful suppliers to challenge unfair decisions.
Submission Portal – The online system where bids are uploaded.
Why it matters: Each platform has its own format; practice uploading early to avoid errors.
T
Tender – A formal offer to provide goods or services under set conditions.
Why it matters: “Tendering” is the process of submitting this offer — the heart of public procurement.
Tender Notice – The public announcement of a new opportunity, usually including scope, budget, and deadlines.
Why it matters: These notices are the starting point of every contract search.
Turnover Requirement – The minimum annual revenue threshold for eligibility.
Why it matters: If you’re below the limit, consider partnering or subcontracting to qualify.
V
Variation – A formal change to an existing contract.
Why it matters: Variations must be approved; unauthorised changes can breach the contract.
Value for Money (VfM) – The balance of cost, quality, and outcomes in procurement decisions.
Why it matters: SMEs can score highly by demonstrating efficiency and innovation.
W
Weighting – The percentage value assigned to each evaluation criterion. Why it matters: Focus your efforts on the most heavily weighted sections for maximum impact.
Written Clarifications – Buyer responses to supplier questions during the tender period. Why it matters: All bidders receive the same answers — read them carefully to refine your bid.
Work Closely – The practice of collaborating with stakeholders, suppliers, and internal teams to achieve successful procurement outcomes. Why it matters: Working closely with all parties ensures effective contract management, aligned objectives, and better overall results in procurement activities.
What Is a Tender? A Simple Guide for SMEs
A tender is simply a formal request from a public buyer for goods, services, or works. When you respond, you’re submitting your proposal — known as a bid.
There are several tender types:
- Open Procedure: Anyone can submit a bid.
- Restricted Procedure: Only shortlisted suppliers (after a PQQ) can bid.
- Competitive Dialogue / Negotiation: Used for complex projects requiring buyer-supplier collaboration.
Understanding which procedure applies helps you prepare the right documentation and time your efforts effectively.
What Is a Framework Agreement – And How Can SMEs Benefit?
A framework agreement is a pre-approved list of suppliers who can provide specific goods or services over several years.
Once approved, you don’t need to re-tender for every job — instead, you’re invited to mini-competitions within the framework.
For SMEs, frameworks provide long-term stability and repeat work opportunities.
Supply2Gov lists live framework tenders across multiple industries so you can identify entry points early.
What Is a Dynamic Purchasing System (DPS)?
A DPS is similar to a framework but remains open to new suppliers throughout its duration. It’s entirely electronic, allowing ongoing entry and easier access for SMEs.
The DPS marketplace is an online platform where public sector buyers can access various Dynamic Purchasing System agreements, shortlist suppliers, and manage procurement processes efficiently.
For example, a local council may run a DPS for IT support — you can apply at any time to join the supplier pool and be invited to specific jobs later.
See Opportunities on Supply2Gov
MEAT Explained: What Is the Most Economically Advantageous Tender?
“MEAT” stands for Most Economically Advantageous Tender.
It’s how buyers decide which bid offers the best overall value — balancing price, quality, and social impact.
For SMEs, this is great news: being innovative, sustainable, or community-driven can score just as highly as offering a low price.
What Is Social Value – And Why Does It Matter?
Social value refers to the positive community, environmental, or economic impact created by your business beyond the contract’s core delivery.
Corporate social responsibility (CSR) is a management approach aimed at positively affecting society and is closely linked to social value in public procurement.
Examples include:
- Employing local people
- Reducing carbon emissions
- Supporting charities or schools
Since 2021, social value is a mandatory evaluation factor in most public sector tenders. SMEs often outperform larger competitors here due to local reach and agility.
How to Use This Procurement Glossary in Real Tenders
Now that you know the terms, here’s how to put them to use:
- Keep this glossary open while reading tender documents.
- Match unfamiliar terms to these definitions.
- Use Supply2Gov to cross-reference live tenders that fit your skills.
- Build confidence — the more you read, the more familiar these terms become.
Knowledge turns confusion into opportunity. Every acronym you understand is another step closer to winning your next contract.
How Supply2Gov Helps SMEs Win Public Sector Tenders
Navigating procurement doesn’t have to be overwhelming.
With Supply2Gov, SMEs get:
- Access to the largest tender database in the UK and Ireland.
- Free local alerts straight to your inbox.
- Smart filtering by CPV code, region, and value.
- Guides and support for bid writing, compliance, and qualification.
Ready to find the right tenders for your business?
Register free with Supply2Gov today