Intro guide to public sector tenders & contracts
3 February 2023
If you’re involved in the public sector, understanding how to navigate tenders and contracts is essential for your success. With so many rules, regulations, and laws surrounding the process, it can feel overwhelming, and you may not know where to begin.
So, we’ve created this comprehensive guide to help you understand the basics of tenders and tendering for contracts in the public sector, from how to find a tender service , how to apply for them and how to write a winning bid.
With this knowledge, you’ll have the confidence to successfully take on any tender or contract that comes your way.
What is the Public Sector?
The public sector is the group of organisations responsible for providing public services, many of which are funded by the government through taxes.
In the UK, some of the main public sector organisations include the NHS, schools and universities, and government offices such as the Department for Work and Pensions (DWP).
The public sector is often contrasted with the private sector, which refers to organisations that are privately owned and operated for profit, such as supermarkets and telecom companies.
Both sectors overlap in many areas, including healthcare, transportation, energy, and telecommunications. For example, public transport in the UK is a mixture of the public and private sectors.
In London, the local government operates the bus network on a not-for-profit basis; however, in Scotland, the Scotrail Network was owned and operated by a private company until 2022, when it was taken back into government ownership.
Another example of the overlap between these two sectors is education. Schools across the UK are, for the most part, within the public sector and run by local councils.
However, there are a large number of private education institutions that are privately owned and operated on a for-profit basis.
There are specific rules and regulations associated with the public sector that private companies aren’t subject to, including different types of procurement and contracting.
Procurement refers to the process of acquiring goods and services for government programmes or projects.
Contracting refers to the process used to acquire those goods and services.
Procurement and contracting have different rules and regulations based on the type of organisation and whether it’s in the public or private sector.
What is a Tender?
A tender is an invitation to supply a good or service. Tenders are used in the public sector to purchase goods and services, and they often involve multiple companies bidding on a specific contract.
Tenders often operate like mini markets where a group of sellers compete to win the business of a single buyer.
Types of tender include procurement tenders, an invitation to tender (ITT), a request for proposal (RFP), a request for information (RFI), and a request for quotation (RFQ).
Tender in Business
How to get a government contract
When tendering for contracts to bid on, your method will depend on your budget, industry, and experience finding and securing tenders.
The process can seem quite overwhelming and daunting if this is the first time you’re searching for public sector tenders. However, once you know where to look, it gets easier.
Here are some methods you can use when tendering for contracts to find a tender service that works for you.
- Tender alert services
Tender alert services work by allowing you to set up personalised alerts that you’ll receive via email whenever a new opportunity arises in your industry. Although these are usually paid services, the time you save when using a contracts finder or tender alert service makes it a worthwhile investment.
- Official databases
Official databases are another option when tendering for contracts and can be especially useful if you’re looking for contracts that are a bit further afield – for example, in Europe.
- National portals
Each country within the UK has an individual national portal to help you find local opportunities for public sector tenders. These can be a great place to begin if you’re just getting started with tendering for contracts.
Free or paid tender services: which is better?
If you’re just starting and tendering for contracts for the first time, you might find that the paid options above are out of your budget and would prefer to look at free options instead.
However, you should consider if the time spent researching and finding free options is worth the cost savings.
In many cases, free tender services look like a good option, but the extra benefits, expertise, and time saved when using a paid service are more beneficial in the long run.
When to bid on tenders?
The answer to this question depends on the individual and, of course, when you feel ready.
However, when tendering for contracts in the public sector, the process outlined in the tender itself needs to be followed exactly, so it’s vital that you understand what’s required and that you can meet this before submitting your bid.
Here are a few key questions you should ask yourself before deciding whether to submit your tender bid:
- How long have you been in business?
Although there’s no legal requirement to have been trading for a certain amount of time, it’s generally expected that the buyer will want to see at least two years of trading in the form of business accounts.
However, as always, you should pay attention to the listed requirements in the tender, as this can vary.
- What does your financial history show?
Buyers want to know that your business is operating at a profit, isn’t in any serious debt, and that you’ve covered yourself with the appropriate insurance where needed.
- Are you able to meet the contract requirements?
This is the most important thing to consider before you apply for any tender. As well as meeting the requirements to bid on the tender, if you win it, you must ensure you have the skills, experience, and resources to fulfil it to the best of your ability.
Tendering for Contracts
What is a tender contract?
The most common contracts in the public sector are procurement contracts and service agreements. Procurement contracts are legally binding agreements between an organisation and a supplier to exchange goods and services.
Service agreements are legally binding contracts that outline an organisation’s and its employees’ responsibilities.
All government contracts, including those awarded at the national, regional, and local levels, are subject to the Public Contracts Regulations 2015.
How to apply for tenders and contracts in the public sector
As with any business transaction, the first step in applying for a tender or contract in the public sector is to find the specific terms and conditions for the procurement.
Many organisations post these details on their website so that you can start your research there.
If the information isn’t easily accessible on the website, it’s generally a good idea to call or email the contact listed on the site to ask for more details.
Once you have the tender or contract information, you should review the details carefully to understand what the organisation is looking for.
After reviewing the document, you can decide whether or not to apply for the procurement if you feel it’s the right fit and meet the eligibility criteria.
Understanding the rules and regulations of tenders and contracts
Contracts are governed by laws and rules, many of which are designed to protect the organisation awarding the contract and the public.
In the public sector, these laws and regulations are often referred to as the procurement system.
The procurement system is designed to promote fairness, equity, and openness in the award and administration of contracts funded in whole or in part by the government.
There are two key procurement systems: the commercial and the competed systems.
The Commercial Procurement System purchases goods and services that are available on the commercial market.
The Competed Procurement System is used for purchases not available on the commercial market or when particular circumstances warrant a different procurement system.
How to write a winning bid
Bids are a critical part of the procurement process. A bid is a statement of commercial business from one or more suppliers offering goods or services in exchange for a contract.
Your bid is the foundation of your relationship with the company or organisation issuing the tender.
While there are no guarantees that you’ll win the tender, there are several strategies you can employ to help increase your chances of success.
First, thoroughly review the tender specifications and ensure that your product or service fits the requirements.
Next, create an offer that is tailored to the procurement.
The best way to understand how to write a winning bid is to study examples of successful bids or hire a bid writer who has knowledge within your industry and knows how to structure them correctly.
How to evaluate tenders and contracts
Before taking on any kind of contract, you should ensure that you fully understand everything expected from both parties.
One of the most important things to look for when evaluating a contract is the risk associated with the contract. The risk associated with a contract is often referred to as the critical path.
The critical path is the sequence of activities that must be completed to deliver a successful outcome.
Next, examine the contract terms and conditions. Make sure that you understand the responsibilities of both parties and the potential risk associated with non-performance.
The contract terms will define the obligations of each party and the conditions under which the contract can be terminated.
Tips for successful tenders and contracts
To succeed in the public sector, you must understand the process and the environment. To be successful, you will likely need a different approach from the one you may have used in the private sector.
A few tips for success in the public sector include:
- Becoming familiar with the contracting process
- Understanding the rules and regulations
- Be prepared to follow the process
Being familiar with the contracting process will help you know what to expect at every stage, from applying for the tender or contract to negotiating the final terms of the agreement.
Understanding the rules and regulations of contracting will help you avoid any costly mistakes that could jeopardise your success.
And finally, being prepared to follow the process will help you move smoothly through each stage and ensure that everything is in place when needed, helping you have the confidence to succeed in the public sector.
In some cases, you might find that the process you’re being asked to follow is different to what you’re used to, or it might even seem like there could be a better way of doing things.
However, there typically isn’t much room for negotiation the way there might be within the private sector due to the strict regulations, so even when things seem inflexible or counterintuitive, you must follow the process as requested if you want to secure the tender.
Resources for Understanding Tenders and Contracts in the Public Sector
While there’s certainly a lot of information out there on the process of tendering for contracts, many websites use overly complex language and jargon.
This can feel intimidating and confusing and leave you more overwhelmed than when you started trying to find a tender service.
Let Us Help You Find Your Next Tender
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You’ll save time and money by avoiding hours searching the internet for tenders that might not be relevant to your needs, and you’ll be able to access all the information and resources you need in a single dashboard.
With unlimited access to live tenders, daily personalised email alerts, a tender-ready toolkit, and ongoing training and resources in your low monthly membership, you’ll be fully supported throughout the process of finding, securing, and managing your public service tenders.