Why Public Procurement Could Be Your Business’ Lifeline

Why Public Procurement Could Be Your Business Lifeline

Did you know the UK government spent £379 billion on public sector procurement in 2021/22 across the UK.? Most of the spending comes from an increase in health spending. The government also spent £19.2 billion on general public services, £12.5 billion on environmental protection, £38 billion on education, and £146.2 billion on healthcare.

As a small business, you are always looking for new opportunities to grow and expand. If you are struggling in a post-pandemic and post-Brexit world, tendering to the public sector can be your saving grace. Public procurement can help you build long-term relationships and improve your profit margins.

Tendering to the public sector can help you take your small business to the next level. Read on to learn more.

1) Experience Working with Valued Organisations

When you are tendering to the public sector, you are working with valued organizations that have a strong reputation. If you can show high performance and meet their demands, your reputation in the industry will benefit. Starting with smaller contracts can be beneficial as it will lead to larger contracts that can improve your profit margin.

Many small businesses don’t think they will win a public sector bid because they don’t have the resources of a large corporation. But remember that the UK government expanding its public procurement to support small and medium enterprises.

They have committed to spend at least £1 for every £3 with small and medium businesses. Out of the 66,000 contracts awarded by 2200 public sector bodies, 17,000 went to small or medium-sized businesses. This is an opportunity for your small business to get a public sector contract and work with valued organisations.

2) Ongoing Relationship

Another benefit of public procurement is the ongoing relationships you can make. While businesses can go bankrupt, you can rest assured that your public sector client will be around for a good long while. You can take advantage of a strong network and get more contracts in the future if you can meet performance objectives.

Just like a private sector client, a public sector contract options up doors in the long term. Rather than a short-term view, you need to think about the future of your business. While the tendering process can get complicated, the value of working with a reputable organization and building ongoing relationships cannot be understated.

One of the ways to build a government customer base is to start with low-value procurement. Once you have experience bidding for public sector contracts and working with the government, you will have the right foundation to start bidding on larger contracts. This long-term approach to the procurement process can help you spot opportunities and build ongoing relationships within the government.

3) Fair and Transparent Bidding System

There is a lot of legislation that is in place to ensure that the public procurement system is fair and transparent. As a small business bidding for a public sector contract, you have ready access to the regulations and guidelines that the government provides. The government focuses on the best value for money, which includes quality and effectiveness.

Fundamental Principles

The public procurement system has some fundamental principles it adheres to, including:

  • equality of treatment
  • transparency
  • proportionality

Where you were not the successful bidder, you can get feedback on the process and your bid as compared to others. You can get a deeper understanding of the factors they considered in making their decision.

The transparent bidding process also ensures that all bidders get the same information. You can submit your bid knowing that all the information is equally distributed. You will not be at a disadvantage when compared to larger corporations bidding for the same contract.

Recent Changes

There have been recent changes to the procurement process that support more transparency. The rules have to change now that the UK is no longer part of the European Union. Understanding these changes can help you manage the bid process and feel comfortable that you were treated fairly.

4) Focus on Responsible Practices

The public sector understands the vital role it plays in furthering sustainable and responsible practices. Public procurement is a way to achieve wider environmental, social, and economic policy objectives. They are committed to:

  • building strong relationships with suppliers
  • working together to deliver on these objectives

This is an avenue of opportunity for your small business because you can show your creativity and commitment to these objectives. You can be flexible and adaptable to changing trends in a way that large corporations cannot be. As a small business bidder, you can secure valuable contracts by showing your commitment to the environment and other social objectives.

If you have a unique approach to sustainability and environmental practices, you need to show that in your bid. Take the public sector procurement process as a way to work with the government on their commitment to the environment. Make sure that you highlight these in your bid because the evidence is essential to secure public sector contracts.

5) Guaranteed Payment

Rising costs like inflation, fuel costs, and energy costs threaten the survival of small businesses. Many people in the labour market saw a chance to retire, leading to labour shortages. The supply chain is still recovering, so shortages and disruptions are common.

It’s no surprise that many other businesses are running into the same problems as you are, which can lead to unpaid bills and bankrupt businesses. When you bid for public sector contracts, you are working with a large organization that will get guaranteed payment at the right time. You will not have to worry about collections or bankruptcy.

Accounts receivable is one of the top concerns of small businesses. Clients don’t pay on time or at all, and you have to spend your time and resources following up with them. With a public sector client, you don’t have to worry about the costs of collections.

Find Your Next Public Procurement Contract

You may be struggling in a post-pandemic and post-Brexit world with rising costs. Before you get too stressed out and anxious, consider tendering for public procurement and take advantage of all the benefits. Public procurements can be daunting, so you need to work with someone who can do the heavy lifting for you.

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