How do public tenders work?

Public sector procurement process step by step

A public sector organisation would like to purchase goods or a service (think NHS, local councils, central government etc.). The public sector are bound by certain procurement regulations so they advertise public tenders via a contract notice to the market.

A contract notice is released to the market (via Contracts Finder and other portals) outlining the contract and explaining how interested companies can submit a bid. This is typically done via an online portal and e-tendering system. It is unlikely that you will be asked to submit a hard copy of your tender document. The online portal allows for communication between the contracting authority and all interested bidders.

Interested organisations express their interest in the tender, and gain full access to the contract information and tender pack from the public buyer. They must check they meet all requirements and are eligible to bid, to be considered for the contract.

Typically, the bidder will have a four-week window to draft and submit their tender. The bidder will have had sight of evaluation criteria, knowing exactly what the buyer is looking for in the tender. The submitted bid is then evaluated by the public sector team. This is called the open procedure. However, if the buyer is using the restricted procedure, there may be an added step of a PQQ or SQ to firstly qualify bidders, only inviting the strongest organisations through to tender stage for the final evaluation.

The contracting authority marks all tender submissions, and the highest-scoring organisation is selected to be awarded the contract. If this is a framework agreement (with multiple contractors to be awarded) then there may be several winning bidders.

The contract with the public sector authority will commence for the set amount of time, as outlined in the original documents. On average most contracts run for a period of three years, but can be shorter for a one-off project, for example. The award of this public tender is made available via a contract award on various online sites so that it is transparent which company has been awarded the contract.

Why do public tenders exist?

The government have a duty to procure goods and services in a fair and transparent way. The tendering process in both UK and EU public procurement evaluates a bidding company on both price and quality, so that it is not a case of the cheapest company wins the contract. Similarly, the public sector cannot just select whomever they like; all contracts worth over a certain value threshold must follow the procurement process.

Public tenders and contracts with the public sector do have many positives. They can be a guaranteed income for organisations, they typically run for three years plus and can create further contract opportunities with similar authorities. For framework agreements, whereby one or more authorities are looking to establish an ongoing contract agreement with multiple organisations, this can provide a company access to multiple work streams.

Qualifying for public tenders

In order to work with the public sector, there are typically a few main requirements that a company must meet to be considered as qualified bidders:

• You must select a contract opportunity that is suitable for your business – something that aligns with the services currently being offered and is deliverable
• Having a track record certainly helps, to show the public buyer your competence in practice
• Depending on the industry sector of the public tender, you may need certain certificates or memberships. If so, this will be outlined in the tender documentation as a requirement
• Ensuring all your company documentation is up to date and relevant is key, as this will also be evaluated
• If you are lacking in some of the above areas, perhaps look for a dynamic purchasing system as a starting point, as this tends to be a contract with multiple suppliers awarded and therefore a higher chance of success.

How to find tender opportunities

There are two main sites that the UK government use to advertise all public tender opportunities.

Contracts above the threshold – high-value tenders – are advertised on Find a Tender Service, and are very much bound by Public Contracts Regulations 2015. These will certainly follow the above step-by-step process and your organisation will need to complete a tender to be considered for the contract. Find a Tender is updated daily with all new contracts that are ‘live’.

Low-value contracts, below the threshold, tend to be advertised on Contracts Finder, for contracts above £10,000. They may have a slightly simplified tender process, but likely follow the exact same process as larger-value contracts.

At Executive Compass our team are experts in all of the above, and specialise in writing tender responses for our clients bidding for government contracts. Over the last ten years we have written in excess of 4,000 tender submissions. We also publish a select list of contract notices in the main industry sectors that we work in, on our website HERE. To discuss how our team of professional writers can support you to complete invitation to tender documents, and more, contact us today.