The art of winning public sector contracts

If you’re accustomed to concluding deals on a handshake then the prospect of selling to the public sector may be less than enticing.

For while the buying departments of central and local government certainly represent a huge market for businesses of every size and sector, it’s all too easy to be deterred by concerns that pitching for contracts means becoming embroiled in stifling bureaucracy.

And there’s undoubtedly some truth in that perception. Put in a bid for a government tender and you will inevitably engage with a maze of arcane procedures and protocols that would not have disgraced the Byzantine Empire. Indeed, it’s not unknown for companies to spend months preparing a proposal only to see it rejected because a 50-page tender document has been completed incorrectly. Hardly surprising then, that a great many businesses tend to give public sector work a wide berth, and prefer instead to focus on the more straightforward process of selling to other companies.

But this could be a case of better the devil you know. After all, every market sector has its own written and unwritten rules – and to be successful you have to be aware of what they are and play the game accordingly. In this respect, the public sector is no different from any other. The tendering process can indeed be very formal, but if you’re prepared to research the market thoroughly, it needn’t be overly daunting.

IDENTIFYING OPPORTUNITIES

The research starts with identifying opportunities. Public sector procurement is a catch-all term that covers everything from multi-billion pound orders for aircraft carriers down to contracts to clean the windows of local schools or supply flowers to the town hall. Every government department, local authority, LEA and health trust has its procurement officers and each has its own buying requirements.

The good news is that while contracts to supply national government tend to be awarded to large and long-established businesses, there is plenty of scope for relatively small companies to compete for local authority work. And as William Sargent, recently departed chairman of the Small Business Council, points out: “Businesses with under 100 employees tend to operate locally and local authorities often source locally.”

They do this for policy as well as practical reasons. Marc Wood, a director of Exor management services – a company that works with suppliers to ensure they have the necessary accreditation to sell to local authorities, notes that “local government bodies are under immense political pressure to support local business.”

So if the opportunities are there, what’s the downside? Well simply that tracking down available contracts is a challenge in itself. Under EU rules all public sector contracts worth £100,000 or more must be advertised in the Official Journal of the European Community (OJEC to its friends), but below that level, there is no single source of information. To comply with the law, government bodies must advertise when they put work out to tender, but the ads could appear in a multitude of places, including websites, trade journals, the national press or local newspapers. And if you don’t know where to look, you won’t know that the business exists. “It’s very difficult to find out about contracts,” admits a spokesman for the Office of Government Commerce. “They are advertised at local level and local authorities will also contact suppliers who have done business with them before. The problem is, if you haven’t done business with a local authority, you won’t be on the suppliers list.” In that respect, the system favours existing suppliers.

But you can take action to level the playing field. According to Jason Woodford, development director and owner of Academy Internet, a company that has won web-development and e-learning contracts from a number of government agencies, there is no substitute for good old-fashioned spade work. “I would encourage businesses to pick up the phone. Ring up procurement departments and ask where their contracts are advertised,” he says. And once you have that information you can begin to monitor the magazines and websites where the ads appear and respond when a suitable contract comes up for grabs.

Given the image of faceless bureaucracy that Whitehall departments, local government offices, assorted LEAs and health authorities tend to project, it may come as something of a surprise that cold calling for business is an option. “It’s perfectly possible to ring up a local council and ask when a particular contract comes up for renewal and whether your company could be considered,” says Wood. Of course, the key to this is in getting to the people who actually make the decisions. “It’s no different from making a call to a private sector business,” says Woodford. “But you do have to find the right person to talk to – and rather than trying to make a sale, think of it in terms of offering them a solution.”

Cold calling is part of a wider process of raising visibility. Given that public sector buyers will advertise contracts directly to suppliers that they already know, it is crucially important to firmly implant your business on their radar screen. “Public sector business is no different from any other,” says Ian Makgill, a director at public sector procurement consultancy Ticon UK. “If you believe you have the skills, then you have to put yourself in the shop window. The normal rules of marketing apply.”

RAISING YOUR PROFILE

And aside from calling direct, there are numerous ways to raise your profile. Woodford recommends that you find out which trade magazines get read in public sector circles and either buy some advertising or – better still – work with a PR company to get your name in the editorial pages.