Public Sector Bids vs Private Sector Bids

Although it is important not to make generalisations, as no two tenders are the same, there are some general divergences between private and public sector procurement.

The bidding process

Public Sector

The process for submitting a tender to a local authority or government body is highly standardised and often includes a number of formal stages such as the Selection Questionnaire (SQ) stage, and then the Invitation to Tender (ITT) stage. The two stage process allows the contracting authority to firstly shortlist a number of suppliers before making their final decision. Standard forms and template response documents can sometimes be replicated across numerous submissions. As public sector bids have to adhere to strict government guidelines, including Public Contracts Regulations 2015, some may argue that this negatively impacts on the flexibility of the tendering process, as submissions must be evaluated against strict marking schemes. As a result, this process is highly regulated, and more standardised than private sector bids.

Private Sector

The tendering process in the private sector is not restricted to the same extent. Private companies are still obligated to treat the tenderers fairly, for example, they must consider all compliant tenders that have been submitted prior to the deadline or face challenges from bidders, or claims of litigation. However, the tendering process in the private sector is more flexible, and some may say it invites dynamic approaches or entrepreneurial flair. Essentially, buyers can evaluate the submissions how they see fit.

Means to an end

It may be theorised that if the tendering process is a means to an end, the public sector is concerned with the means, whereas the private sector is focused on the end.

Private corporations are usually guided by profit as a priority, and their overarching aim is to select the most competitive bidder who can deliver the best value for money possible. Alternatively, public sector commissioners such as local Councils must ascertain whether the bidder can meet all the statutory and regulatory requirements imposed on them. For example, the Public Services (Social Value) Act requires those who commission public services to think carefully about securing wider social, economic and environmental benefits for the local area. Therefore, the content of their bids and tenders are designed to reflect this. It is almost certain that a public sector tender would include at least one question related to social value, alongside other ‘softer’ questions related to community engagement, partnership working, and added value for the Council.

On the other hand, questions within private sector bids are more likely to focus on ‘harder’ facts, and specific commitments related to innovation, technology, efficiencies, and commercial elements. Generally, the financial elements of private sector bids such as pricing schedules will hold more weight than in the public sector, and can impact significantly on the overall score. Commissioners want to know that bidders can propose a good quality service, which will increase returns for company owners or shareholders. Marking schemes created for the private sector will reflect this overarching goal. However, for a public sector bid you will have to demonstrate that you can go above and beyond these basic requirements, by exploring the means by which your service is delivered, and the benefits this will deliver for the wider community.

Regardless of whether you are tendering for private or public sector contracts, it is important to focus on answering the question in a clear, concise and comprehensive manner, highlighting the benefits of choosing your company, above all others.

Executive Compass work with companies bidding for both public and private sector bids. To discuss how we can help you to secure a contract, contact us today.