The UK government spends a whopping £300 billion a year on public sector procurement – and around one-sixth (£50 billion) of this is for central government. UK government procurement spending goes on everything from large infrastructure projects to stationery, and about a third of the government’s services come from third-party suppliers.

It’s a sizeable market to break into. Yet selling to central government can seem like a daunting prospect. The mere thought of bureaucratic red tape puts many suppliers off. There’s also a misconception that the UK government only deals with a few large companies.

In recent years, the government has opened the gateway to smaller companies by committing to spending £1 in every £3 with SMEs and involving them in more projects. Despite the rigorous checks and balances, now is a perfect time to break into the public sector market.

To do business with central government, you must have a good understanding of the environment you are selling into. This blog explains how central government procurement works.

How does the government buy goods and services?

As you would expect, selling to government is considerably more complex than the private sector. There are various channels the government uses to make purchases. These largely depend on how much a contract is worth and fall into the following categories:

  • less than £10,000
  • Between £10,000 and £118,000
  • More than £118,000

Low-value goods and services (less than £10,000) are purchased using a low value purchase system agreement. Suppliers can join the agreement at any time and government buyers award contracts directly or run mini-competitions, where multiple suppliers propose a solution. Public sector customers, including central government agencies and departments, request quotes and buy through electronic catalogues. The marketplace for low-value goods and services doesn’t involve a tender process.

Contracts worth over £10,000 but less than £118,000 are purchased via the government’s Contracts Finder portal. This portal is aimed at smaller businesses and the voluntary sector or charitable organisations. Contract opportunities from a wide range of public sector bodies are published here including the NHS, police forces, fire and rescue services, housing associations, and local councils, as well as central government agencies and departments. Suppliers must bid for contracts.

High-value procurements – over £118,000 are handled via the government’s Find a Tender service. Find a Tender works much in the same way as Contracts Finder, but for larger value contracts. Find out more about how the tendering service works here.

 

In addition, there are specific channels for certain categories of goods and services. Digital services, for example, are tendered through the government’s Digital Marketplace. Here suppliers must pitch through ‘framework agreements.’ Successful suppliers become a preferred contractor.

The Small Business Research Initiative (SBRI) is a scheme to encourage innovative technology solutions from small businesses.

You can read more about the government’s public sector procurement policies here.

What is a government procurement agreement?

The agreement on government procurement (GPA) is an agreement set out under the World Trade Organisation (WTO). The GPA is a pluri-lateral agreement (meaning it includes some but not all WTO members) which aims to address trade barriers by mutually opening government procurement markets among its parties. It opens procurement activities to international competition from member countries which are signed up to the agreement.

What is the Crown Commercial Service?

The Crown Commercial Service (CCS) is the UK government’s procurement organisation. It is responsible for the legal framework for public sector procurement and leads on the development and implementation of the government’s procurement policies.

How to become a Crown Commercial Service supplier?

There are two steps to becoming a CCS supplier. Firstly, suppliers must register on the CCS eSourcing tool. Find out more about what you need to do to register, here

Registering does not automatically make you a supplier. Suppliers must then submit a bid to get placed on a CCS framework.

How do I get on to the Crown Commercial Services framework?

Crown Commercial Service frameworks help public and third sector buyers to procure goods and services from a list of pre-approved suppliers, with agreed terms and conditions and legal protections.

To become an approved supplier, you must compete to join a framework specific to your sector’s goods and services. You can source upcoming tender opportunities by registering with the Contracts Finder or Find a Tender services.

Registering with the CCS and expressing an interest in a tender doesn’t guarantee you a place on a government procurement framework. You need to be successful with your tender to be awarded a position on a framework. This means you need to pitch for a government contract.

Read more on how to become a Crown Commercial Service Supplier here and find out how to sell through CCS here.

How do you pitch for a government contract?

Pitching for government business is a time-consuming process. It also takes skill. There are many bid-writing firms that can help identify opportunities and assist you with Crown Commercial Services tenders. While there is a cost involved, it may significantly increase your chances of success.

According to bid-writing company GovData, 80% of framework submissions fail when they’re self-submitted. This typically happens because of insufficient submission of technical documents, mismatched answers, or missed deadlines. Many companies that sell to government choose to outsource their bid writing.

When pitching for a government contract:

  • Seek out the most suitable tenders. For example, specialist tenders suited to your organisation and/or local opportunities.
  • Consider using specialist help, such as a bid-writer (writing a bid can take up to 10 days – do you have the expertise and the time?)
  • Be prepared – you’ll need to provide all relevant documentation for ISO quality standards. For starters, be sure you have ISO: 9001 (Quality) and ISO: 14001 (Environmental) in place.
  • Meet the brief – read the advert carefully and show how your product or service meets all the criteria.
  • Remember to include any other public sector or relevant experience and demonstrate sufficiently how you have helped other clients.
  • Always keep in mind that government buyers will need to see you are offering both quality and value for money.
  • For higher value contracts, make sure you spend adequate time to explain social value – 10% of marks awarded when scoring the bid will be focused on this.
  • Each department in government has its own way of doing things and even its own culture, so understanding the department you are targeting, including its challenges and ambitions, is essential. Start by reading departmental blogs and strategy documents. Try to get a feel for core values and key objectives.
  • Get to know the influencers and decision-makers by following them on social media.
  • Know the rules.
  • Focus on the problems your prospective buyer wants to solve. Your best chance of selling to the government is to show how you can play a role in solving their problems. Provide good evidence.
  • Think long-term – this is a long sales cycle.
  • Be patient. Getting a feel for government procurement can take a while.

Find out more about how SMEs do business with government here.

Getting started: selling to the government

Do your homework. Get to know the government help pages and keep up to date with new legislation. Knowing how to sell to the government is half the battle.

Keep abreast of upcoming contracts so bids can be completed ahead of time. Learn as much as you can about public sector procurement. Sponsoring relevant events is an invaluable way of familiarising yourself with this sector and getting your business known.

At GovNet, we are committed to helping those organisations looking to sell to central government to get in front of their target audiences via our portfolio of award-winning public sector focused events.

Talk to one of our team, request a meeting today!