Public sector procurement can be lucrative for suppliers but it can also be an immensely complex process. In this quick guide, Supply2Gov will explain the ins and outs of the procurement process, including details of what happens at each stage and defined definitions of terminology. By the end, your organisation should feel more confident to submit bids for public sector tenders in the future.
What is public sector procurement?
Public sector procurement is the acquisition by public authorities of goods, works and services through a public contract: for example, the supply of hospital beds and other furniture to a public hospital.
Tenders meaning
The term tenders refer to the contract opportunities published by public sector organisations for goods, services, works and utilities.
What is a Tender Process
If you want to tender for government contracts, it is important that you get to know the tendering process.
As public sector procurement must be fair and transparent, public sector bodies such as the NHS, Ministry of defence and local councils have to purchase goods, works and services via the public tendering process.
The public procurement process requires that an Invitation to Tender (ITT) is published to generate competing offers for the specified business the public sector organisation requires. These call for bids take different structured forms – open tenders and restricted tenders – but essentially they will set out details of what the public sector body wants supplied.
The steps taken in this process may differ slightly from those outlined below depending on the value of the contract being awarded and the tendering procedure it follows. So what is involved in a tender process?
1. The contract notice is published
A contract notice, otherwise known as an advertisement of the procurement opportunity to the market, is the first stage of the public sector tender process. It is the most fundamental requirement for a buyer to ensure that a broad range of organisations respond to the bid, encouraging healthy competition in the market. The contract notice will include just enough information about the project for an organisation to decide whether or not they will submit a bid. It summarises the object and scope of the contract and states the basic tendering conditions, such as the submission deadline.
In the European Union, standard contract notices over a certain value threshold are published in the OJEU, an accessible online platform which is free to use. Thousands of contracts are published on there every day from every country in the EU. To sift through them would take a huge amount of time and resource, which is why Supply2Gov’s tender alerts are here to help you maximise your productivity. More on that later.
2. Access the tender documents (call for tenders)
Once a contract notice has been published, organisations are invited to submit their tender bids to the public authority. To do this, organisations will need to obtain the full tender documents, including the detailed technical specifications. Thanks to the Public Contracts Regulations 2015, especially Regulation 22, the vast majority of contracting authorities will use e-tendering tools or other online tools, so that all tender documentation is accessed and submitted online. You will need to make sure to read the tender documents thoroughly and understand exactly what the awarding authority requires before submitting. While you may see ways in which your business could add value, a bid which does not wholly meet the buyer’s actual requirements is very likely to fail.
It is important to note the difference in tone between contract notices and tender documents. Contract notices ideally should be written in a clear, honest and logical way so that they are easy to read. Tender documents, however, are heavy on legal conditions and reasons why tenders may be rejected. They are full of terminology and technicalities, but only because they need to be. Tendering conditions must be transparent in advance, so that firms cannot be rejected for reasons they didn’t know existed. The tender documents will also tell you about the selection and award criteria, which are the criteria against which your bid will be judged. Pay attention to these, and to any weightings, they include as they tell you what aspects of the contract the buyer considers most important.
What does contract value mean?
A contract value is the price of a public sector contract. Public sector contracts can range from several hundred pounds to multiple billions, depending on the size of the project and the public authority that issues the proposal. The contract value is not always publicised in the tender documentation, to avoid setting the wrong incentive for firms bidding. It is usually recommended to express the scope of the contract in terms of volume and not in terms of money, for example, ‘we will need 200 hospital beds every month over three years.’ Where the value is stated, contracting authorities are allowed to require bidding companies to have a turnover twice the value of the contract they are applying for. This is to prevent businesses becoming too dependent on one contract for their survival.
3. Submit questions and answers
Asking questions is vital throughout the tendering process. Organisations typically have an opportunity to ask questions to clarify the call for tenders. Some public authorities may choose to set strict deadlines for the questions to be submitted by, some do not. The answers that are given in response to questions are made available to all firms interested in the tender to avoid exclusivity – this reflects the principle of equal treatment of tenderers. Sometimes questions may clarify mistakes that were made in the tender documentation, so all potential tenderers should be made aware of them.
4. Visit the premises of the project
In instances where the tender is construction work or where machinery needs to be installed, a contracting authority may set a requirement that tenderers inspect the location where the work is needed before they submit their bid. This is to ensure that tenderers have a realistic idea of what is expected of them, giving the project complete transparency. If this requirement is mandatory rather than just recommended, firms that do not take part in this stage of the procurement process may not tender.
There are pros and cons to demanding premises visits, though. A visit to the premises can limit the competition for the tender, given that it will add costs for. This can be particularly costly if the organisation is based far away. This cost of travel will be added on to the final price, which is then paid by the public authority anyway, so it is arguably more limiting than productive.
5. Submit your bid before the deadline
This is an important part of the tendering process. Writing a response to a tender is a demanding process, combining a vast amount of research over a relatively short time period (again – depending on how big the project is.) Tenderers need to be sure that they have answered all the questions carefully, especially the mandatory ones, and that questions with a higher scoring are given more weight and detail in their response. Often, several people work on aspects of a bid. Suppliers should get someone else to read the complete document through before submission to make sure it is consistent and there are no silly mistakes or annoying typos.
The essential thing for a tenderer is that they submit their bid on time. No matter how good their bid is, if it arrives even a few minutes late, it will automatically be rejected.
Now that you are familiar with the tendering proccess, build your procurement knowledge further with Supply2Gov. We offer blogs rich with resources and tips throughout the procurement process to help you win business. Your organisation can register for free to receive daily tender alerts filtered by geographical location and your business interests. This means you don’t have to search through thousands of public sector tenders every day, taking up valuable time and resource. Instead, you’ll receive relevant contracts straight to your inbox, giving you contract information at the touch of a button.