How to Win Government Contracts as an SME in the UK

Embarking on a journey to win government contracts as an SME can be a rewarding and lucrative experience. On the other hand, it can occasionally feel like navigating a very complicated maze.

However, despite its challenges, it can pave the way for substantial growth and success with figures revealing UK SMEs won a record-breaking £21 billion worth of work in 2021/22 – that’s around £3,800 per small UK business.

Whether you’re a carpenter, builder or electrical contractor there are opportunities available to you. Here, we demystify the tendering process, explain how you can tap into this market and detail the steps you need to take to land your first [contract]((/https://squareup.com/gb/en/contracts).

Where to find government contract opportunities

The main portal is the government’s Contracts Finder which lists all contracts worth more than £12,000 (including VAT) currently available. Through Find a Tender you can search for high-value contracts, typically above £138,760.

The Small Business Research Initiative (SBRI) also helps connect suitable businesses with public sector organisations seeking innovative solutions to specific challenges.

There are also other avenues you can pursue:

• Attend a supplier event – These are events where you can meet the buyer, giving you an opportunity to talk to government departments about their planned projects. Departments will put them on Contracts Finder as well as department pages.

• Join the supply chain – If you’ve never tendered before or want to gain more experience of public sector projects, search for past contracts with larger suppliers and look at opportunities to become a subcontractor.

• Join a framework – You can compete to join government frameworks or dynamic purchasing systems specific to the goods and services you supply. If successful you can become a preferred contractor.

How to write a bid

A bid is the application you make for a contract. To be successful, you need to answer all the questions, back up your experience with evidence, be clear and concise and avoid the use of jargon.

Value for money

Government buyers have to account for their spending and therefore any contract must be shown to be good value. If you can demonstrate how your bid can save the government money and be run cost-effectively, it can boost your chances of success.

Quality

Whilst value for money is important, it goes hand in hand with quality. Government departments need to know if the goods and services they’re buying will meet the contract needs.

Social value

At least 10% of marks awarded on any bid will be based on social value factors. These are:

• Economic - They provide employment, apprenticeship or training opportunities.

• Social - They promote cohesive communities.

• Environmental - They make efforts to reduce carbon emissions or otherwise benefit the environment.

Providing evidence

Whether it’s value for money or social factors, you will be expected to present evidence to back up your tender. These can include:

• Statistics such as financials, POS reports or performance targets for similar contracts

• Testimonials

• Case studies

• Evidence of prior experience on similar contracts

• CVs to evidence the proposed skills and expertise of the contract team

Maximise your chances of success with your government tenders

To increase your chances of winning a government contract, keep in mind these points:

• Make sure your bid is clear and concise. Don’t assume prior knowledge by the evaluator – make sure you explain all concepts

• Allow the narrative to flow logically and use bullet points and sub-headings to explain details clearly

• Use powerful opening sentences and clinchers to grab the evaluator’s attention

• Break questions down into subheadings or bullet points and address each point separately

• Be definitive about your answers and use positive language to convey your experience and evidence

• Simplify language and don’t waffle, e.g., ‘if’ instead of ‘in the event that’

• Focus on the benefits and advantages of your proposition and provide context as to why your solution is the ideal one

• Avoid technical jargon that an evaluator may not be familiar with

• Each question is unique so don’t copy and paste answers even if this leads to some repetition in content

Remember, a tender is essentially a sales document. Your job is to show you’re the best company for the job and the aim is to sell your goods and services rather than merely report.

Checking a bid

Before you send your bid it’s essential you check it through to ensure all bases are covered. Make sure you have answered all the questions accurately and succinctly. Check you have provided the relevant evidence, your pricing is competitive and you meet all eligibility criteria. Lastly, check for silly grammatical and spelling mistakes, ensure you have used the word count effectively, you have met the specification, your answers are structured logically and you have been consistent.

Three common tendering processes

Open procedure

Anyone can submit a tender but there is no negotiation with bidders and all tenders must be considered. This is most often used for simple procurements.

Restricted procedure

Interested parties can make an expression of interest and a minimum of five suppliers will be asked to formally tender. There’s no negotiation with bidders but government departments can ask for clarification and finalisation of terms. It is most often used where there is lots of competition or in less stable markets.

Competitive dialogue

Only a selection of those who reply to an advert will be invited to submit a bid. Government departments can enter into negotiations with bidders to secure more favourable rates.

What happens after the bid

Once you submit your bid it will be evaluated on several criteria:

• Administrative compliance – Does the bidder meet eligibility criteria, have they answered everything in full, do they meet any grounds for exclusion and are there any declaration requirements?

• Economic and financial position – Does the bidder have the cash flow and financial capacity to be able to successfully carry out and complete the contract?

• Technical and price evaluation – Does the bidder meet the criteria for value for money and quality?

You may also be asked for clarification on some of the questions. For further guidance on the tendering process visit the government’s how to bid for government contracts page.

After bidding for a government contract

If you’re successful in your bid you’ll have to operate with certain frameworks set out in the tendering process and mandated by the government. For example, legislation requires public sector buyers to use 30-day invoice payment terms and this must be passed down the supply chain.

Don’t be disheartened if your bid proves unsuccessful. Instead, request feedback and learn from the experience. Keep bids on file and use them as a learning tool for future contracts. And finally, compare them to the winning bid on Contracts Finder to see where improvements could be made.

Getting to grips with how to bid for government contracts can be a steep learning curve but ultimately it’s a worthwhile one. It can help you expand your customer base and develop a consistent revenue stream. With persistence and attention to detail, you can forge beneficial partnerships with government departments that will lead to long-term growth in your business.