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Selling to Government: time to make it YOUR business
Targeting government contracts is not a gimme. But there is a huge amount of money looking for suppliers and they are the sort of clients who can help you navigate the recession securely.Paul Clapham gives you some pointers.
Published:  05 May, 2009

How would you fancy a share of £16 billion worth of expenditure on goods and services? Yes, I thought so and, by the way, that was billion, the one with nine zeros. £16 billion is the expenditure budget of the MoD, just one government department - albeit a big one. Total government expenditure for the coming year is estimated at the eye-popping figure of £175 billion. Since you're paying for that, shouldn't you be aiming to see some of it in your business bank account?

The benefits of selling to government bodies are clear: it's financially secure and they pay on time, typically within 30 days; there is usually repeat purchasing; they're big value sales; government doesn't just buy on price. Indeed, the official guidance is to seek "the optimum combination of whole life costs and quality or fitness for purpose to meet users requirements".

Wouldn't you like all your clients to work to those criteria? Plus there is a certain kudos in being able to boast "supplier to the Home Office", for example. But this nut is unbelievably difficult to crack, no? Certainly, compared to selling to private business it is harder, but that is partly because it is just plain different.

Set procedures have been laid down and must be adhered to. As a taxpayer you should be pleased with that. You want your tax spent wisely. But lots of the business does go to SMEs: last year 59% of local government and 22% of national government contracts went to SMEs. I have kept coming across the statement that public sector buyers are more interested in getting the best combination of value and quality than they are in the size of the supplying company.

Procurement

Nor should you assume that this is all huge value purchasing. For sure, the headline grabbers are the mega-bucks computer systems and aircraft carriers, but the reality is that of the 26,000 contracts placed by the MoD - as a case - in 2007-8, 90% were for less than £100,000. Moreover, there is also a facility called the government procurement card, which is quite literally a Visa charge card. It can be used on purchases up to £5,000 by the LVP Officers (Low Value Purchasing).

OK, you'd like to cut yourself a slice of this action. Where do you start, what do you do and how do you find out who needs what?

The best start point must be www.supply2.gov.uk. This website offers an access point for SMEs to become involved in selling to government. Congratulations to whoever put it together because it is clear, professional, helpful and businesslike - a combination that large organisations and government in particular rarely seem able to achieve.

The core benefit is a free registration which gives you e-mail alerts of new contracts which are out for tender in your chosen area and relevant to your products and services from public service buyers. The vast majority of these fall into the "under £100,000" category. On a national basis there are some 3,000 new contracts each month.

The Supplier Information Database (SID) is the route to publishing your corporate profile to public sector buyers who are searching for your product. It is recommended that you store the Pre-Qualification Questionnaire (PQQ) with it. This is a standardised, simplified form that aids the tendering process. You will note that this process is bedevilled with acronyms and, believe me, I've left many out.

Further proof that the government is serious about involving more businesses in selling to them is that they are running roadshows around the country during the spring and early summer to help you improve your tendering skills. They will cover terminology, documentation and a detailed review of the evaluation and award process.

They will outline the commoner errors and pitfalls to avoid, as well as giving tips on making a submission stand out. Unlike most of this, it's not free - first delegate fee is £120, additional delegates £95 for a one day seminar. For anyone serious about this, that looks like money well spent.

I would also recommend a look at www.bipsolutions.com. They publish an annual guide entitled Selling to the MoD. It is packed with relevant access information including contact details for European contracts, prime contractors to the MoD, sub-contracting opportunities and a list of the low value purchasing officers referred to above. While the listed product requirements tend to focus on the likes of weaponry, fuel and food, the book specifically examples clothing and sports goods as products they need to buy.

Let me add the personal observation that service personnel are proud of their regiment, ship or squadron: they are keen to wear their heart on their sleeve (or left breast) and, indeed, anything which fosters team spirit and camaraderie is perceived as good news in the services.

BIP also offer consultancy to enable your business to up its game when selling to the public sector. This takes three different forms. For those who have had tenders declined they offer the PASS Mark Health Check. This reviews how the business approaches a tender, highlights any weaknesses in relevant in-house knowledge and mandatory policies (eg: health and safety) and reviews the presentation process. Cost is £980 for a one day health check.

For those new to the process of tendering the second element of BIP's service could be important. They will provide a consultant onsite to work with you on a tender submission. This gives you practical guidance in completing tender documentation as well as advice on how to respond to Expressions of Interest and best practise for operating the tendering process as a whole. Again consultancy is charged at £980 per day. Their third option is in-house training. As you'd expect this can cover a wide variety of subject material, starting with basic understanding of legislation, processes and practise, but from there could focus specifically on issues related to selling to local government or the NHS or other government departments you have ear-marked. Prices start at £1900 for up to 10 delegates and it is clear that to get full value for money you would need to have a clear idea of what you aim to achieve.

Other government bodies have similar guides. For the NHS, as a case, go to www.supply2health.nhs.uk. A quick Google search throws up lots of these types of access points and it isn't just the biggest government bodies - Cardiff University have one. Therefore, it makes sense to cherry-pick those local to you. Every authority is in the process of creating these guides and many are already in place.

Do a Google search of ‘tenders to government' and you will come up with a host of sites offering listings - at a cost. I have no evidence one way or the other for their value, but it is certainly a resource. I didn't come across any which offered a free short-term taster, which would encourage me to believe the long-term value was there. You could, of course, ask for that.

Tendering

Then we come to the tendering process. This is where it tends to go belly up for a lot of businesses because they're simply not used to the discipline. For guidance look at www.berr.gov.uk.

Whether you're finding tender opportunities through supply2gov or ads in the press, be sure that you are an appropriate supplier - if the ad leaves you uncertain, contact the named individual and ask. Indeed, throughout the process don't be embarrassed to check and re-check detail. Apparently, pitching for the wrong contracts is a classic error and one that wastes a lot of time, resulting in rapid disillusionment with the whole business sector.

Next comes the pre-qualification questionnaire which covers such matters as your financial status, experience references and overall capability to fulfil. You are advised to tailor this to the audience rather than just using a standard response. Assuming you pass that test, an invitation to tender will arrive.

The paperwork is lengthy but you must complete it all including all supporting information required. The criteria required will be listed in order of importance, so respond giving the same priority. Again, this is a classic mistake - businesses focus on their strengths ahead of the buyer's requirements (which is bad marketing, in any case). Check the organisation's procurement policy. Unlike some private businesses I can think of, these are not mere lip service. Environmental impact is often a big issue. If you can demonstrate excellent eco credentials in general and specifically for the contract, it tends to be looked on favourably. Above all don't miss the deadline. If you can't give the process due time, you will almost certainly waste what time you do spend on it. Finally, ask for feedback. This applies whether or not your tender is successful.

It cannot be stressed too strongly the importance of being complete and on time. If information is missing or you're late, you will almost certainly be automatically disqualified. This is entirely reasonable; how can a buyer who has not met you trust you to deliver the correct product on time if you can't do it with the tender document? You will also need to learn a new habit: patience. The process can take months.

USEFUL WEBSITES

www.supply2.gov.uk

www.bipsolutions.com

www.supply2health.nhs.uk

www.berr.gov.uk







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