Government procurement processes are changing

In many countries, government procurement has changed dramatically over recent years. eProcurement and technology is driving change. However, there is also a trend to end embedded behaviours. Purchasing is the public sector is becoming more dynamic, less centralised and more cost-effective. Government is looking for ways to use their scale to leverage better value from suppliers.

Creating real opportunities for SMEs

In the past, government procurement processes have been open to SMEs and many smaller businesses have sought to engage. However, their experience has often been negative. They have invested significant time, energy and cost in bidding but few have been successful.

The result is the disengagement of SMEs from government procurement and a massive dominance of large-scale suppliers in government spend. However, this is changing. Not only are governments talking about engaging with SMEs, it’s possible in many countries to see actual spending trends changing too. So how can SMEs access government procurement processes?

Tip #1: Understand the relevant processes and laws

This is perhaps the most critical step. Unlike private sector companies, there are usually legal frameworks governing how public sector organisations operate procurement. These are public documents and public officials are required to follow them. SMEs need to read them and understand what they mean.

At a high level, government procurement process consists of an assessment of their needs, an invitation to tender, bid submission and evaluation, and contract award and management. If you understand this and how it works you will be able to guide how you engage and what you need to do to participate. It’s crucial to understand – and comply with – legal requirements in terms of your business’ registration, documentation, employment law, accounting and so forth.

Tip #2: Know where you fit

Bidding for new business is a considerable commitment in terms of time and resource. It’s always important to understand your angle and where your business adds value. For public sector contracts and governance, it’s essential.

Government RFPs are published for all to see in most countries. Make sure someone in your team keeps up to date and understands the types of requirements that are regular put out to tender. You can probably even set up online alerts to make sure you receive relevant RFPs. Review these requirements and be clear – and honest with yourself – about which ones you can address and win.

If you understand which RFPs are the best fit with your capabilities, skills and experience, you will have a better chance of winning. If you think about your credentials and collateral and how you can evidence your suitability to specific types of tender.

Tip #3: Commit to a strong proposal

If you’re serious about winning government contracts, you need to be serious about the bid process. Allocate adequate resources to your efforts – qualification, bid planning and completion. Make sure you assign a good team and back them with the right resources.

It’s a false economy to submit a below-par bid. It’s unlikely to win, especially if you are a new supplier. You should also begin outline planning of what you would do if successful.

Tip #4: Look out indirect opportunities

Government contracts can often be sub-contracted by the successful bidder. Don’t end your monitoring of bids at the point where you receive a decision. If the requirement is a significant size, you may find an opportunity to sub-contract.

This approach can also lead to more formal joint ventures with other suppliers. Some of the large providers in your market may already have an established ‘SME partner’ model. Perhaps this is to meet government targets for spending with SMEs. Alternatively, you could look to band together with complementary providers to achieve scale or a combined service offering.