Public Sector Contracts - How They Work & How to Win Them!
There have been a lot of big contracts out lately - CCS Non-Medical Non-Clinical, Transport for London, HTE Nursing & Care and these large public sector contracts have one thing in common - they often have minimum criteria that you need to meet to be able to participate.
There are two key things that Procurement Teams are tasked with doing when putting together these contracts and frameworks and in simplistic terms these are:
- Obtaining VALUE
- Mitigating RISK
This is not just about price, although clearly competitive pricing is a very important factor. It’s about what they get for their money. Value will incorporate a lot of elements including streamlining process, reducing administrative burden for the end user, avoiding additional cost for elements of the process (e.g. DBS checks, enhanced referencing, psychometric testing etc) and reducing errors as well as a competitive price.
As part of the process, Procurement needs to ensure that selected suppliers do not pose a risk to the end user. There are several key categories of risk, e.g.
Financial - what if you are unable to fund the service that you have been awarded? What if you go bust or can’t pay your workers? Procurement Teams are looking for longevity and financial stability to minimise these risks and this is why there financial qualifying criteria are included such as minimum turnover, profitability, D&B/Experian score etc. Be aware of your D&B/Experian scores and incorporate strategies to improve these into your business strategy.
Compliance - public sector contracts cannot be seen to be engaging with agencies who are unable to meet minimum legislative and regulatory compliance. How can they be sure your workers are all eligible to work in the UK? What happens if you supply workers who have not bee suitably vetted and who subsequently fail to behave/perform appropriately (e.g. fraud, IT security, breaching H&S / equality legislation, abusing patients / vulnerable adults or children etc)? You need to ensure you have clear processes in place via relevant, up to date, documented policies and procedures. Keep your library of company information up to date with current legislation, regulation and best practice and document all your processes to help you with this.
Competence & Fulfilment - the public sector spends approx £4 billion a year on temporary recruitment with agencies, so a key criterion for Procurement is to ensure that the agencies they select can actually fulfil the job requirements in the right locations. At the same time Procurement is tasked with streamlining processes and reducing costs - often achieved through economies of scale. The only ways Procurement can guarantee fulfilment at the same time as reducing cost is by:
- Engaging with a smaller number of agencies who have the capacity to fulfil the requirements - but this can be detrimental to acquiring niche skills and engaging with SMEs.
- Opening up the contract to a large number of agencies of all sizes, but this negates their ability to achieve economies of scale, can be very difficult to manage and delivers a framework with huge variations in terms of price.
- Operating vendor neutral and master vendor models which deliver a streamlined process for the end user whilst guaranteeing fulfilment and compliance.
- Encouraging consortium bids to enable agencies to club together to deliver a more competitive and compelling offering.
SO….HOW CAN SME AGENCIES GET THIS TYPE OF BUSINESS?
OJEU regulations have changed and high value bids are being split into lots to make it easier for SMEs to bid. Consortium bidding is being included and actively promoted. Most large frameworks also include a Master Vendor or Vendor Neutral option with the client specifying in the contract the proportion of business that must go to SMEs, so even if you don’t get on the framework directly, you may have the potential to supply via the MV/VN.
Here are some ideas to help you get your clammy paws on some public sector business:
- Identify prospective tenders which are going to use the PSL model and find out how they plan to structure the lots - establish which tenders are going to be best suited for you to bid for on your own.
- Discuss Master Vendor opportunities with clients who you already supply on an informal basis - see if there is an option for you to partner with other agencies so that you can fulfil more/all of their requirements in return for which you would obtain the security of a formal contract.
- Get yourself ready to bid. Don’t wait until the OJEU notice is published - start NOW! Conduct research and establish which frameworks you want to be part of. Attend “meet the buyer” events and ask sensible questions. Get to know the key stakeholders and ask for a meeting with them to try to understand how you as an SME can participate. Build the relationship over time before the tender is published. This is what the big boys do and you can too!
- Build relationships with selected Master Vendor and Vendor Neutral organisations - learn how they work and find out how you can work in partnership with them. Try to supply via these organisations to build up a track record of delivery.
- Set up a Consortium. To do this you will need to define who the lead bidder will be and who will actually fill the jobs. Establish from procurement what categories of staff fall into what lots and build your own consortium of trusted partners within these specialisms in advance. You may also need to set up an SPV - a Special Purpose Vehicle which is a single legal incorporated entity set up specifically for the contract. To do this you will need to get advice from your legal advisors.
Fiona Brunton, Recruitment Tender Writer & Consultant
Brunton Bid Writing
Tel: 01688 400319 / 07944 856293