How SMEs can secure public sector work
When it comes to bidding for public sector work, there are a few things SMEs can get a grip on


There is good news and bad for small and medium-sized enterprises (SMEs) when it comes to bidding for public sector work. On the positive side, new government data shows that SMEs won £39.7 billion worth of such contracts last year; less happily, the proportion of public sector work awarded to smaller businesses has remained stuck at around 20% for the past five years. The new Labour government says it wants SMEs to get more public sector work, but its predecessor said the same thing. And while both the national government and councils have made efforts to encourage SMEs, the reality is that the onus remains on businesses themselves to go out and win these contracts.
In practice, this means getting to grips with the way that public sector procurement works. One advantage of focusing on public sector contracts is that there are strict rules and processes governing how they are awarded. Small firms that understand the system can then engage with it. Most contracts are advertised on Contracts Finder, a public online portal (localised versions of it operate in Scotland, Wales and Northern Ireland). You can use this portal to search for opportunities in your sector and to set email alerts so that you are automatically notified as new opportunities come up.
As new work is advertised, the awarding authority will also set out details of how it will manage the selection process. Often, companies are asked to go through a pre-qualification stage, where the authority assesses their capability and suitability for the requirements of the project. This assessment is typically conducted online through a selection questionnaire or pre-qualification questionnaire. All the SMEs that pass the checks then go on to the formal tendering stage of the procurement process, where they make a formal proposal, including pricing. In other cases, these two stages will take place simultaneously in a single exercise. Either way, bids must be assessed against the methodology and award criteria set out in the contract documentation. Public sector contract awards are expected to go to the most economically advantageous bidder.
MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
How to make a public sector bid
It is therefore vital that you read all the documents carefully to give yourself the best possible chance of a successful bid. Check that you have the skills and experience necessary to meet the requirements, rather than wasting time assembling a bid for work that you have no chance of getting. If you’re not sure about an aspect of the contract, seek clarification from the authority offering it. In some cases, it may make sense for SMEs to work together to bid for public sector work, particularly as contracts can be too large for a single small business to handle on its own. Pooling resources and expertise may be a way to ensure your bid meets all the requirements and that you have sufficient scale to deliver the work.
The key is to make your bid as compelling as possible. Give the authority every reason to award the work to an SME rather than a larger firm. Set out your strengths, capabilities and experience as clearly as possible, and provide evidence for the claims you are making about your performance. Some SMEs find it useful to engage the services of a professional bid writer, particularly when they are first competing for public sector contracts. Remember, public sector authorities are actively looking to award work to SMEs, so play to your strengths. For example, your size may enable you to be more flexible or to offer better value for money. Make these points in your bid. Finally, if you don’t succeed initially, keep trying. It may be possible to get feedback on why a bid has come up short – learn from such feedback and adjust your next bid accordingly.
This article was first published in MoneyWeek's magazine. Enjoy exclusive early access to news, opinion and analysis from our team of financial experts with a MoneyWeek subscription.
Get the latest financial news, insights and expert analysis from our award-winning MoneyWeek team, to help you understand what really matters when it comes to your finances.

David Prosser is a regular MoneyWeek columnist, writing on small business and entrepreneurship, as well as pensions and other forms of tax-efficient savings and investments. David has been a financial journalist for almost 30 years, specialising initially in personal finance, and then in broader business coverage. He has worked for national newspaper groups including The Financial Times, The Guardian and Observer, Express Newspapers and, most recently, The Independent, where he served for more than three years as business editor.
-
Is it time to ride the recovery in emerging markets?
Interview What's the outlook for emerging markets? Gustavo Medeiros, head of research at Ashmore Group, gives his analysis and reviews progress in developing economies
-
Could the Enterprise Investment Scheme cut your tax bill?
The Enterprise Investment Scheme is tax-efficient and potentially lucrative. Taking a chance on the scheme could trim your family’s IHT bill, says David Prosser
-
'Ride the recovery in emerging markets': Gustavo Medeiros of Ashmore Group tells MoneyWeek
Interview What's the outlook for emerging markets? Gustavo Medeiros, head of research at Ashmore Group, gives his analysis and reviews progress in developing economies
-
The City's big bet on green finance fails to pay out
Opinion Insurers and banks are backing away from “green finance”, and there is not much sign of the green boom we were promised. That’s a problem for the City
-
Why is English football thriving – and can it last?
What has gone so right for English football? The national team has found its feet; the Premier League is swimming in money and profits are soaring
-
Should you invest in Pakistan – the Vietnam of South Asia?
Opinion If Pakistan is now serious about reform, it’s time for investors to buy, says Maryam Cockar
-
'Why you must own gold and Bitcoin'
Opinion The world is dedollarising, and gold and Bitcoin are the only alternatives. Buy now, says Dominic Frisby
-
'Britain is on the road to nowhere under Labour'
Opinion Britain's economy will shake off its torpor and grow robustly, but not under Keir Starmer's leadership, says Max King
-
What are wealth taxes and would they work in Britain?
The Treasury is short of cash and mulling over how it can get its hands on more money to plug the gap. Could wealth taxes do the trick?
-
UK bank stocks are no bargain – here's a safer alternative
Opinion Britain's banking sector faces severe political risks. Switch into this global financials trust instead, says Max King