Crown Commercial ...
As the only Welsh recruitment agency on the Crown Commercial Services Permanent Recruitment Framework, a big focus for us recently has been our work in the public sector.
Our very own Business Development Manager Gareth Jones, who specialises within this area, was recently interviewed within the latest Wales Business Insider magazine discussing just this, including public sector contracts and how best to win business from government bodies.
How hard is it for businesses to win public sector work?
Frankly it’s never ‘easy’ to win any client work as we operate in a very crowded and competitive industry, but there are definitely very specific challenges which only come with building relationships and winning contracts in the public sector space.
Are there special processes they need to go through?
Absolutely. It is not as simple as just building relationships with relevant decision makers within an organisation, because even if they like what you have to say and sell, more often than not they will be obliged to only work with pre-approved providers that have gone through some sort of procurement process.
Public sector procurement is governed by very clear and strict guidelines, legislation – the Public Contract Regulations 2015 – and thresholds and so there are lots of special/specific processes that need to be followed.
These vary from organisation to organisation and opportunity to opportunity, but broadly include taking part in formal tender/bidding exercises and completing tailored responses to clients’ documents such as Pre-Qualification Questionnaires, Invitations to Tender and Requests for Quotes/Proposals, as well as sometimes having to deliver formal presentations.
What shape does your business need to be in to win public sector procurement contracts?
It’s really important to review your processes and policies before considering selling to or tendering for public sector business. Even if you do not have a recognised accreditation in a particular area of your business – for example ISO 9001 - there is usually an expectation that you will be able to demonstrate very robust process systems, have a quality system and clear, comprehensive internal policies, covering both the work/services you intend to supply, as well as general good practice regarding looking after the rights and wellbeing of your own staff.
Also proactively speak to your existing client base and ask in advance for their permission for you to use their name/logo in your response documents, as well as to release their contact details to the public sector body you are selling to, as there is more often than not a need to provide testimonials, case studies and/or references. Don’t forget to bear in mind the GDPR implications of storing and passing this information.
There will normally be a requirement to demonstrate your financial stability, in order for the public sector body to safeguard where and how they are spending public money, and so you will need to have access to financial statements and/or a banker’s reference proving your amount of turnover and levels of insurance.
For those businesses who are looking to start selling to the public sector for the first time, there are lots of free resources available to SMEs, both in terms of advice and support when conducting an internal review to check you are ‘match fit’ before tendering, as well as workshops on how to write successful bids.
Business Wales is a Welsh Government body that offers excellent free guides and training specifically on these subjects.
Public sector contracts are generally advertised and tendered through an online portal, so a good place to start is by registering your company details on the Sell2Wales and ContractsFinder websites.
Is it still the case that it’s easier for larger businesses to win work?
Encouragingly, no. Historically there has been a tendency for larger businesses to win business as they are more able to demonstrate they have the scale and experience to fulfil the requirements of the contract, particularly where there is a need for national geographic coverage or a large minimum turnover requirement. However, there is a government target for 33% of all public spending to be with SMEs by 2022, compared to 24% in 2018.
Even for those large contracts that are awarded to larger providers, there will usually be opportunities within that large company’s supply chain for smaller businesses to offer a second-tier service.
How can businesses differentiate their products or services to maximise their chances of winning contracts?
Obviously, you need to understand your own business’ and product/service’s USPs in order to differentiate yourself within your market and sell them effectively to any client. However, there are specific ways in which you need to approach a public sector opportunity to improve your chances of being successful.
Read and answer the questions! Firstly, public sector clients lay out very specific criteria that you need to meet or exceed in order for them to justify awarding you the business. In an effective procurement exercise, these criteria will be scored, weighted and explicit in spelling out the amount of detail and evidence you need to provide in your question responses. Before submitting your documents, get a colleague or a trusted professional contact to proof-read your answers objectively to check for errors and ensure you have covered off every element of the questions.
Offer value for money. Due to the fact that public sector organisations are (by their very nature) spending public funds on your service/product, they need to ensure that they are getting the best value for money possible. This doesn’t necessarily mean you have to be the cheapest; there will be a weighted-scoring that is split between technical/quality and pricing, typically a 60-40 split in this regard. Broadly-speaking, if you are going to be supplying the public sector for the first time, you need to consider creating a specific price list which is lower than your ‘standard’ rates.
Consider the ‘Social Value’ that you can add. Increasingly, as well as having to evidence that you can fulfil the basic requirements of the opportunity better than your competitors and can provide value for money and/or cost-savings due to having ‘sharpened your pencil’ sufficiently to provide an attractive quote, public sector buyers are now also looking for you to demonstrate the ‘social value’ that you can deliver through the contract. This is a relatively new area for purchasers and sellers alike to consider and it is still early days in terms of a definitive way of monitoring and calculating social value, but in Wales a good starting point is having a look at the 7 goals of the Well-being of Future Generations (Wales) Act 2015 to give you a focus in terms of ‘added value’ ideas.
Some examples I have seen in some recent tenders include: an expectation to employ a certain number or percentage of the local population in any jobs that are created by a new contract: and having to offer free expert employability advice to tenants of a council housing programme that is tendering for general recruitment services.
Why are public sector contracts so valuable to businesses?
Simply in terms of the scale of opportunities, public sector contracts can often provide businesses with a regular, planned (while not necessarily guaranteed) and consistent level of revenue over the lifetime of the contract.
This can help a smaller business with predicting and forecasting what levels of return on investment they can expect and minimise the common feast/famine cycle that new and SME businesses often experience.
Being awarded public sector contracts is also an outward sign to other client-types that you are a trusted and quality provider and will improve your chances of winning other public and private sector work.
How much are public contracts worth to businesses?
This obviously really depends on the sector or industry you are operating in and how many opportunities there are within the public sector for what you do. However, given that total UK public spending last year, including both central government and local authority spending, was £821.0 billion, it is clear that there is lots of business to be won.
What is it like to do business with the public sector compared to the private sector?
In lots of ways, there is very little difference. You are still dealing with people and you have to focus on delivering on your promises, providing excellent customer service, communicating effectively and maintaining quality standards.
However, again there are often specific requirements that public sector clients will expect, over and above what you may be used to fulfilling in comparison to the private sector.
In order for them to monitor and evaluate the continued success of the contract they have awarded, public sector bodies will usually build in a service level agreement into their contract, which will stipulate an agreed set of key performance indicators that you will have to provide periodic management information on to demonstrate you are living up to the dream you sold during the tendering process.
If you haven’t done business with or worked in the public sector before, don’t get fooled by any thoughts you may have that it is a slow-paced or out-dated environment. In my experience, due to the ever-increasing pressure for public sector organisations to deliver more for less with the public money they have at their disposal, there is often a very lean, fast-paced, dynamic and customer-focused approach to the work they do and this is reflected in the way they expect to do business with their suppliers. I think most new providers to this sector will be pleasantly-surprised and impressed about the way these customers work.
Are there different ways of doing things that businesses need to be prepared for?
In lots of ways, public sector organisations are at the vanguard of doing things in a responsible, ethical and compliant manner. Often they will be the strongest advocates for diversity & inclusion in their processes, policies and culture and so they will expect you as their supplier to mirror or at the very least comply with their rules in this area. Beginning to win and work with public sector business is a really good way of forcing you to reflect on your own internal culture and methodology and checking that you are adopting best practice in all areas of your business.
For more information on Yolk's public sector recruitment, contact our Crown Commercial Service specialist teams on 02921 673 757 or on firstname.lastname@example.org.