Public Procurement: Delivering Value to a Community While Making Profit

Public Procurement: Delivering Value to a Community While Making Profit

Approximately 250,000 public authorities in the European Union spend 2 trillion pounds or 14 percent of the Gross National Product purchasing works, services, and supplies. Oftentimes, public authorities buy services such as energy, transport, social protection, waste management, and health or educational services from private entities. When the government purchases goods and services from private businesses, the process is known as public procurement.

Public procurement matters because it boosts growth, investment, and jobs. It feeds the economy by making it more innovative, resourceful, and socially inclusive.

In short, public procurement allows local businesses to serve their communities and taxpayers well. Such a service requires the government to procure contracts in a well-managed and efficient manner.

Furthermore, when the government improves its public procurement process, it can save significant amounts of money. By the time you’ve finished reading this article, you will have a sound understanding of how public procurement works.

What is Public Procurement?

Public procurement is the process of the local government obtaining goods and services through local businesses. So when government organisations need a particular service, they will advertise for such a service or good. Private businesses then sign business contracts with the government, and the public thus procures a service from their local businesses.

Ultimately, everyone wins in such a situation. The government organisation receives the services or goods they need. The local business receives the business they need, and they serve their local community.

Basic Principles

The success of a public procurement process rests on a framework for a code of conduct. In the UK, this framework consists of eight core principles.

1. Transparency

The government organisation must make the information on the process available to all stakeholders including suppliers, service producers, contractors, and the public.

There is one exception, though. If the organisation needs to keep the contract confidential for legal reasons, it may withhold the information from the public.

All public procurement announcements must include sufficient details for anyone interested in the contract. These details should help contractors, service providers, and suppliers determine if they have the qualifications to compete for the contract. Furthermore, the government organisation must make all solicitation documents available at a reasonable price.

2. Integrity

All tender documents must have clear and dependable information free of bias. The public servants who are working with the public procurement process must demonstrate trustworthiness, responsibility, honesty, and reliability.

Without this integrity, the entire public procurement process would fall apart.

3. Economy

This principle emphasises the government organisation’s need to manage the public’s funds with care. The prices the organisation pays for the services and goods should be of good value and generally acceptable.

4. Openness

For public procurement to truly work, the government organisation seeking goods and services must display openness to the public. All eligible organisations and individuals should have a chance to procure business contracts with the government. If there is confidential information regarding the individuals in the process or the organisations, then the parties involved may keep this information private.

5. Fairness

For fairness to happen in the public procurement process, four ideas must be in place.

  • Unbiased actions and decision making
  • Offers are considered solely based on compliance with the document stipulations
  • Contract signed with the compliant supplier, service provider, or contractor
  • Opportunity for suppliers to challenge the procurement process if they deem it unfair

Contractors who seek procurement contracts will do their best if they use a procurement consultancy service. Such a service will help them land the contracts they want.

6. Accountability

Businesses, contractors, and government organisations should have a way to hold each other accountable for their decisions and actions. A good procurement process will have a system in place that obliges parties to report to or answer to a specific overseeing party as well as the public.

7. Efficiency

A quality procurement process will take place as efficiently as possible. It will happen in an appropriate amount of time and be as cost-effective as possible.

8. Responsiveness

All parties involved should seek to meet the expectations, goals, and needs of the community that the procurement serves.

Finding Public Procurement Opportunities

How does a company find a public procurement opportunity? By law, a public sector organisation that is seeking a contract opportunity over a given value must advertise the opportunity in the Official Journal of the European Union OJEU). The type of contract will determine the threshold since different thresholds exist for specific types of contracts.

A contract that has a value of fewer than 106,000 pounds is considered below OJEU and does not need to be advertised.

The public body will formally announce the contract opportunity through a contract notice. This notice is a business’s first chance to see what the organisation wants. It also gives you a chance to put yourself in the running for the contract.

You can sign up through contract portals or commissioning portals. You can also run a search for such contracts through the UK government website. Your best bet is to use a tracking service that will help you find contracts.

What Is Tendering

When working with public sector contracts, you will hear the terms “tender” or “tendering.” A tender refers o the actual contract. The process of winning the contract is known as tendering.

There are two types of tendering: open and restricted tenders. Open tenders invite any interested business to submit it by a given date. then the organisation will evaluate the bids and award the contracts to the given businesses.

Restricted procedures have two stages. The filtering stage is where the organisation identifies a shortlist of businesses that are qualified for the job. The organisation will use a pre-qualification questionnaire or a PQQ that businesses fill out.

In the second stage, the shortlist of contractors will submit their bids for the project. Then like the open procedure, the organisation will select the winning contractor.

Small Companies and Public Contracts

If you have a small company, you may believe you have no chance of winning a public contract. Public sector contracts vary in scope and size. Some of the smaller contracts work best for small, local providers.

You can also form a partnership with other like-minded organisations and then make a bid together to deliver a joint service.

Everyone Wins With Public Procurement

Public procurement serves the local economy well. Small, local businesses can grow because they win government contracts. They then turn around and serve the taxpaying community with their goods and services while still making a profit.

Are you looking for a procurement opportunity? If so, contact us. Our tracking services will help you find the perfect opportunity for your business.


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