How Do Public Tenders Work?
If you’ve ever asked yourself, “How do public tenders work?” you’re not alone. The public sector tendering process is structured and must follow certain procedures. Before your organisation starts searching for relevant contract opportunities to bid on, it’s worth familiarising yourself with the public tender process.
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The Public Procurement Process
What is public procurement exactly? Public authorities constantly need to purchase goods or services from the private sector in order to serve their purpose in the best way possible, which is where the government tendering process and public procurement tenders come in.
In the public procurement process, the term “public tender” refers to a contract opportunity that is published by a public sector organisation (e.g. central government departments) to invite competing offers from one or more suppliers who can provide the goods, services, products, works or utilities that the organisation requires.
The decision about which suppliers are awarded these public sector contracts is ultimately made on the basis of price and quality with tenders evaluated against a set of pre-announced criteria.
All public sector tenders and procedures must adhere to certain public contract regulations to ensure free and open competition that results in the most value and benefit for the public. This applies to every public sector buyer, including central government departments.
The Crown Commercial Service (CCS) is a specialist organisation of the Cabinet Office that is responsible for the legal framework of procurement in the public sector. The CCS leads the development and execution of procurement policies for public sector buyers to ensure maximum commercial value in the tender procurement process.
After the requirements for the contract have been established, the public sector tender notice will be published and the tender process will be open to all qualified bidders.
Public sector organisations that issue contract notices have a well-defined public bidding process and the whole public sector tendering process is governed by clear rules set out in the Public Contracts Regulations 2015 to ensure the selection process is fair and transparent to all bidders.
Once the tender notice is published, there is a time limit for suppliers to express interest or submit a tender, depending on the procedure being followed.
Thresholds for Tenders
Understanding the different thresholds will help you determine which contract finder in the UK to use and the type of government tender process that will be used.
If a public sector organisation needs goods or services above a certain estimated value, they will be required to publicly advertise it so that suppliers can bid. This value is £12,000 for central government and £30,000 for sub-central procurements.
The Public Contracts Regulations 2015, along with other relevant policies, has outlined further public procurement thresholds that the estimated value of the public sector contract will fall under. This will determine where the contract notice should be published:
- Above threshold or high-value tenders in the UK must be published on the Find a Tender portal
- Below threshold or low-value tenders will be published on Contracts Finder in the UK
Tracker’s dedicated research team checks 1000s of sources every day in order to send you relevant public contracts for tender directly to your inbox.
Public Tendering Process
Strictly speaking, a “tender” is the actual bid that is submitted by a business to win work, but in the public sector procurement context, it is used more loosely to cover the whole public procurement tender process — from the publication of the public sector contract notice to the bidding on the contract itself.
The public procurement tendering process starts with a contract notice, which is published by a public sector organisation to generate competing offers to meet the specific requirements outlined in the contract notice.
Generally, the tender process stages are:
- The contracting authority publishes a contract notice
- Suppliers bid on the contract (or follow the necessary tender process steps based on the procedure in use)
- The public sector body assesses the bids and awards the tender
The Right Tender Procedure & Tendering Methods
There are several public tender procedures a public sector body can use, and this decision will be based on the specifics of the project. The most common tendering procedures are:
- Open Procedure
- Restricted Procedure
- Competitive Dialogue
- Competitive Procedure with Negotiation
- Innovation Partnership
The four procurement procedures most frequently used by public sector bodies are Open Procedure, Restricted Procedure, Competitive Dialogue, and Negotiated Procurement.
When applying for public sector tenders, a contract notice will inform you which of the four public sector procurement procedures should be used, as well as other necessary details, such as the selection criteria that will apply during the selection stage and the application deadline.
The next steps in the public sector tender process are slightly more complicated because these invitation to tender documents take different structured forms depending on the procedure.
You can get the latest public sector tender alerts sent to your inbox with Tracker Core or Tracker Pro.
What happens after you bid for public sector tenders?
If you bid for public sector or government contracts and are considered a suitable supplier, depending on the tender procedure, you will either be awarded the contract or be shortlisted by the contracting authority and receive an Invitation to Tender (ITT).
If your tender application is unsuccessful, you can request feedback from the awarding body to help you improve your likelihood of winning future bids on public sector contracts.
Any supplier can enter the UK government supply chain by winning public sector tenders. Contract portals like those offered by Tracker help simplify the tender bidding process by making tenders easier to find, allowing you to find and bid on more public sector tenders.
How do Framework Agreements Fit into the Tender System?
When answering the question of ‘What are public tenders?’, it is helpful to also understand other formats that fall under the umbrella of public sector tenders in the UK. A framework agreement is similar to a tender in that a public sector organisation will use it to find suppliers when they are in need of certain goods, services, or works.
While there can only be one awardee when suppliers tender for traditional public sector contracts, multiple suppliers can win public sector framework agreements. While this doesn’t guarantee work for all of these suppliers, it does allow the contracting authority to call on any of them to take on the work for the duration of the framework agreement without needing to repeat the invitation to tender process. These are called call offs or call off contracts.
A dynamic purchasing system (DPS) is another type of tender procedure you may encounter. The major difference between a DPS and framework agreement is that a procurement framework will close once all of the suppliers have been chosen and new suppliers can only bid to join when it reopens. A DPS allows suppliers to join at any point.
Claim Your Share of the Market
The UK government spends approximately £284 billion on public sector procurement annually, including goods and suppliers, which is about a third of its public expenditure.
Due to the UK withdrawing itself from the European Union on 31 January 2020, the UK-wide e-notification procurement service, Find a Tender Service (FTS), has replaced the OJEU (Official Journal of the European Union) as the place where UK-based public sector bodies publish above threshold contract notices and awards. Information and FAQs on FTS are available in the Procurement Policy Note (PPN) 08/20.
You can claim your share of this lucrative market with Tracker — Request a free demo or sign up for a free trial today!
Find, Bid For & Win Contracts with Tracker
As the world shifts more towards digital practices, the tendering process in procurement is following suit. The Public Contracts Regulations 2015 mandated e-communication for all central purchasing body contracts by April 2017 and for most other public sector contracts by October 2018. This means that UK public tenders and contract bidding is largely conducted electronically through what is known as the e-tender process.
Tracker is the only e-tendering solution that provides a full suite of procurement tools to help you find, bid for and win more tender opportunities. Our Bid Manager tool allows you to access tender documents directly from Tender Alerts, upload and work on your bid responses, track the progress of your bids, and collaborate with anyone involved in your tender processes whether or not they are a Tracker subscriber — all at the click of a button.
Our other tools that can streamline the e-tendering process and help you win more business include Spend Analysis, Market Leads, and Market Intelligence. We also offer procurement consultancy services to assist you with the bidding process in your procurement journey.
Now that you have the answer to ‘How do public tenders work?”, you can take the next step towards winning public contracts in England, the greater UK, and beyond.
Sign up for Tracker to access the latest central government and public sector tenders today!