Government Announces Measures to Make it Easier for SMEs to bid for Contracts

David Lidington, Minister for the Cabinet Office, announced in a speech at the think tank Reform yesterday that the Public Services (Social Value) Act 2013 would be reformed to strengthen the government’s commitment to awarding contracts based on social value, rather than just value for money.

He said the changes to the act, specifically the requirement to explicitly evaluate social value when awarding contracts, would “ensure that contracts were awarded on the basis of more than just value for money – but a company’s values too, so that their actions in society are rightly recognised and rewarded”.

The Minister outlined new proposals to keep bids for public sector work competitive while ensuring companies “play by the same rules”, rather than seeing the state absorb more of the work.
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Carillion Bad Management v Government Bad Tender Process

Winning Tenders welcomes a tightening of the tender process after Carillion demonstrates how bad management will always try and push too far.

It is possible that Carillion were trying the traditional construction tender process on service contracts and that led to their downfall. Traditionally, in construction, low bids may be put in on the basis that there are always extras needed… extra cement needed here, a new wall there… all leading to extra money being spent at full price, which results in a healthier profit margin.

Working a school dinner contract or prison contract, doesn’t come with the same margin of error and so if this physiology has been used and no extra work found, then losses could easily be accrued.

We’re not saying this is what has happened but it feels logical… time will tell us the true story.
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Fully Engage with the Tender Process and Look Forward to More Success

engage with the tender process

A formal tender will normally have strict rules to govern communication between the client and bidders. Yet it isn’t intended to be a totally arm’s length process. There are opportunities for bidders to influence the outcome and significantly improve their chances of success – without bending any rules or making your successful bid vulnerable to a challenge.

It’s simply a question of taking every opportunity that the process offers to build your relationship with the client, refine your proposition, and tune in to the real motivations behind the tender.

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Procurement by Tender – The Real Reasons Why Businesses Fail at their First Attempt

Most businesses fail with their first attempt at a formal tender. They needn’t, but they do. This prompts some to give up: ‘I tried it once, didn’t get anywhere, it’s a waste of time.’

This is a shame. Formal tenders are the route to larger contracts, repeat business, and the opportunity to earn more revenue while having fewer clients to manage.

One reason that businesses give up is that they fail to grasp the reasons for their failure. They console themselves with the notion that the result was a foregone conclusion, or that the winning bidder came in with a ‘giveaway’ price. This is rarely the reality.

Here are two of the main reasons that first attempt tenders fail:

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What to do When the RFQ isn’t Clear

It’s not unusual to receive an unclear RFQ. You find yourself having to interpret your client’s precise needs or struggling to understand exactly how different sections of the tender will be evaluated. At this point many businesses are unsure or what to do.

Some worry that asking for clarification might be seen as a sign that they don’t understand the client’s business or how to deliver the contract. Others might be concerned about irritating the client by implicitly criticising their RFQ writing capabilities.

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Professional Support for Bids and Tenders

Professional Support for Bids and TendersYour first few formal tenders will be a steep learning curve. The detail required and the expectations of clients will be an order of magnitude higher than you’ve experienced before.

Even if you have excellent bid writing skills success is far from guaranteed.

Clients have to be less flexible and be seen to be even handed. They have a strict process that all bidders have to follow. It’s easy to get disqualified over a technicality even with a well written bid.

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SMEs and Public Sector Tenders – How to make your Strengths Count

SMEs and Public Sector Tenders – How to make your Strengths CountThe government claims to have hit its target of 25% of government contracts going to SMEs by 2015. But how does it look on the ground? Is it really easier for small enterprises to win government contracts? What are the biggest obstacles between SMEs and success?

I’d like to share a few of the experiences we’ve had supporting SMEs to win significant public sector contracts. You might find these helpful if you’re planning to bid for opportunities or struggling to find a formula for success.

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