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

Official Journal of the European Union (OJEU – formerly called OJEC)

Almost all public procurement contracts for business worth more than an EC limit, which is roughly £99,000, must be published in the daily supplement to the Official Journal of the European Union (OJEU). This provides information on the current requirements and invites suppliers to express an interest, or to tender directly in some cases, depending on the contract procedure. It also sets out information about contracts that have been awarded.

The regulations that say precisely which contracts must appear in OJEU are very detailed. However, you can get information about these from the OGC website. As a general guide, tenders for more than £99,000 of goods and services or for more than £3.8 million of works must appear in OJEU. However, there are many exceptions to these limits, including a number of services that do not need to be advertised. Some departments, however, have made it their policy to advertise more widely in OJEU than they are obliged to.

There are several ways of gaining access to OJEU.

  • Tenders Electronic Daily (TED) is the online version of OJEU. It uses subject and country codes to give you direct access to notices that may interest you. However, many businesses find it easier to use the TED service offered by Business Link, Euro Information Centres and commercial organisations like Government Opportunities.
  • Copies of OJEU (in CD-ROM format) are available by paying a subscription or by buying copies from The Stationery Office.
  • The Stationery Office also has a Scanfax Service that is one of a number of OJEU scanning services that will fax specific extracts from OJEU.
  • You can also see copies at some Euro Info Centres.

Selling to Europe

If you want to sell to Europe, the first step is to assess which markets are open to you and whether or not you can meet their needs. As well as looking in OJEU, UK Trade & Investment has a wide range of market information ranging from country profiles to individual sector reports (for more details, see the UK Trade & Investment website or contact Business Link).

Small Business Research Initiative (SBRI)

This initiative is designed to:

  • encourage and increase the demand for research and development (R&D) from small firms; and
  • give small firms the opportunity to show that they have the ability to carry out and deliver high-quality R&D in response to the strategic needs of the Government.

A number of Government Departments are involved in this initiative, and will aim to procure at least 2.5% of their research and development requirements from smaller businesses. The UK Research Councils are also aiming, over time, to reach these targets. The overall target is for £50 million of government research to be bought from smaller businesses by 2004. For more information on this initiative, visit the SBRI information and enquiry website.

Subcontracting opportunities

Many of the highest-value government contracts are let to large companies. However, small companies can still play a part in these contracts, perhaps as subcontractors or by forming consortia. There is no single way of finding out about subcontracting opportunities, although OGC is encouraging large suppliers to government to make subcontracting opportunities available via their websites. Public-sector organisations may give you information about their main contractors or you might identify and contact a supplier who has won a major contract, for example through OJEU.

In recent years Public Private Partnership (PPP) and Private Finance Initiative (PFI) contracts have become more popular. Although it may not be appropriate for small and new businesses to take on these high-value and long-term contracts, there are many opportunities for subcontracting and consultancy work. Guidance on both PPP and PFI is available from the Office of Government Commerce and from HM Treasury in the PDF document PFI:Meeting the Investment Challenge.

Approved supplier lists

Many public-sector organisations (in particular local authorities) hold lists of potential suppliers for certain types of work, usually for lower-value contracts below the EC threshold limits. If an organisation has such a list, it must still advertise any requirement above the relevant EC limit. The nature of these lists varies between organisations. However, the lists should be regularly reviewed to include new suppliers and to make sure that the existing suppliers continue to provide good value for money. If your firm is accepted onto a list, it does not necessarily mean that you will be invited to tender straight away. To find out about lists held by specific public-sector organisations, you might want to contact the organisations listed on the useful publications & addresses page or your local authority.

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