Tendering for Government Contracts

We look at where small businesses can find opportunities in the public sector and how to go after them...

Tendering for Government Contracts

The public sector spends a huge amount each year and is always looking for new suppliers. However small your business, there are always opportunities to supply this market. Even if you are already supplying one part of the public sector, it is worth looking for opportunities in other areas.

If you’re a small business this guide aims to help you in three ways. Firstly, it will tell you about where to find opportunities within the public sector, how you can bid for work and what are the the further contacts you may need to make.

The Small Business Service (SBS) and the Office of Government Commerce (OGC) have produced this guide jointly. The SBS is an Executive Agency of the Department of Trade and Industry, and was set up in April 2000 with the aim of making the UK the best place in the world to set up and run a business. They are dedicated to helping small firms and representing their interests.

The OGC is an Office of HM Treasury, and was also set up in April 2000 with the aim of improving the Government’s commercial performance. One of OGC‘s main objectives is to achieve effective competition for government business by simplifying access to the government market place.

The aims of SBS and OGC overlap in this area. We both let the small business community know where to find government opportunities, and make sure that small businesses receive equal treatment when competing for contracts.

What is the public sector?

The public sector employs more than 25% of the UK workforce and includes:

  • central civil government departments and agencies;
  • the NHS and its local trusts;
  • the Ministry of Defence;
  • the Northern Ireland Assembly,the National Assembly for Wales and the Scottish Executive;
  • local authorities;
  • universities; and
  • colleges.

Whatever your business,there may be a market for it somewhere within the public sector,whether by contracting directly or by becoming a subcontractor.

What are the benefits to small businesses?

Public-sector organisations are good customers. They have to be fair, honest and professional in the way they choose suppliers and in any dealings with them. Most are also long-standing, stable customers, and have to pay promptly and in line with agreed contract terms. Public-sector organisations have to pay accounts within 30 days (or any other agreed credit period) of receiving a valid bill or invoice. You will find more information on prompt payment law later in this guide.

You may also find that trading successfully with the public sector can give added credibility with private-sector customers.

What are the benefits to the public sector?

The Government is committed to helping Small and Medium-sized Enterprises (SMEs) because it believes that helping more SMEs to compete gives better value for money for the public sector.

Value for money is defined as ‘the optimum combination of whole life costs and quality to meet the user requirement’.
Small firms can offer:

  • greater competition;
  • lower costs;
  • new ideas;
  • responsiveness;
  • flexibility;
  • quality of service;and
  • specialisation.

All of this can mean better value for money for the public sector

EC procurement directives

An EC treaty covers all public-sector procurement contracts within the European Community, no matter what their value. The treaty sets down principles to prevent discrimination against firms from any member state. The principles of the treaty are backed up by a series of EC procurement directives. The directives have been included in UK law as a number of regulations. The directives and regulations set down procedures and standards (based on openness, non-discrimination and competition) for choosing tenderers and awarding contracts with an estimated value above a set limit. You can find information about the EC procurement directives and regulations on the OGC website or from your nearest Euro Information Centre.

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