Government push to award work to SMEs
The UK government has set itself ambitious targets for SME (any business with fewer than 250 staff) involvement, targeting a third of all public sector spend to be with SME’s by 2020.
Despite an early improvement to about 25% of annual spending, progress has stalled, with stakeholders concluding that things are actually getting worse – as evidenced in this recent techUK publication.
The report goes on to discuss some things that the government can do to improve this situation. However, no good business strategy ever began with, ‘wait for the government to change things’. So, what can an SME do right now?
First, know your market
Firstly, some market research is in order – you need to know if government is buying things you offer. No one knows your business like you, you know what work you can and cannot do. Search the awards and tender search pages for all contracts that fit the type you can serve. Look by keyword, location, and value (by range). Look at current open opportunities, what values are being placed, how long are the response times allowed, are there any commercial terms you can’t agree to.
The UK government is one of the most transparent in the world, you can check its spending on the Digital Marketplace. It takes a bit of work to understand, but there is a wealth of information out there.
By comparing current opportunities against historical trends (and with over 60,000 opportunities last year there are a lot) you should be able to see if there is a market for your services. Assuming you find some contracts that fit your business then you can do a couple of things.
Know your business
At this point you need to be very honest, are the previous winners offering something better or more focused than you, can you compete on price, what is your unique offering? You need to understand what your edge is in order to sell it and to evaluate your chances against others. As a new market entrant you need to think about being something different – just being the same, but less well known than the others won’t get you very far.
At this point you could simply respond blind to a tender you are interested in (later blog posts will discuss doing this in greater detail), but the chances of winning are slim if you haven’t got much market intelligence – or your product isn’t ground breaking. In a large number of cases there will be an incumbent already in place, and they will very often have an advantage. You need to learn more about the customer, if you look at the opportunity tile below you’ll see that very often the procurement point of contact is named, make contact with them and see what they’ll tell you. They will likely want to support the government’s SME agenda so will be as open as they can. See a later blog for a discussion of procurement’s objectives.
Know your scale – use it to your advantage
A potentially better strategy is to use those already in the market to get you in. Many savvy Prime Contractors have worked out that having SMEs in their teams scores them points in the assessment process, as such will be very pleased to get an SMEs name in their team.
However, be aware that they might treat SME’s as minor players and be quite transactional. This might not work for some businesses. You can use CFP tender search and look for the larger opportunities and then target those firms likely to be bidding. If that’s hard to find, then large contracts will often have bidders conferences – by registering you can attend and introduce yourself and your business to the range of other sales people there.
You can also look at our awards search to see what contracts have been recently placed. The government’s transparency policy mandates all wins to be posted publicly (although this is still fairly patchily done). Once you spot a winner you can approach them directly – contact details are often in the award publication. If it’s a particularly large contract the Prime player will be very unlikely to have a full team ready to go immediately so will be scaling up and may well want support. This is likely to be a much cheaper way to bid as an SME.
One thing I would recommend in all circumstances is to register and offer your services on G-Cloud at the next issue (assuming your services meet the specifications). It is relatively easy to do, and it allows any part of government to place contracts with you in the future – and you will need that ability at some point.
And of course, if the above don’t strategies don’t get you up and running, then focus on something else and review later, wasting money on bids you won’t win is never a good strategy…
There are a number of publications across government that could help, my recommendation is this Crown Commercial (CCS) Service publication which has lots of useful hints and tips.