PROCUREMENT NEWS Beginners Guide: Tendering for Public Sector Contracts

Tendering for Public Sector Contracts

Is your business looking to start tendering for public sector contracts to help you grow this year and beyond?

In this beginners guide to tendering post, we take you through what a tender is, what does the tenders process involve and what benefits there are for winning tenders to your business so you can be a true tender expert.

What are Tenders?

In business and especially the procurement industry, the term tenders refer to the contract opportunities published by public sector organisations for goods, services, works and utilities.

The public sector procurement process requires that an Invitation to Tender (ITT) is published to generate competing offers for the specified business the public sector organisation requires. These call for bids take different structured forms – open tenders and restricted tenders – but essentially they will set out details of what the public sector body wants supplied.

Thus the term “tenders” is now used to cover any public contract opportunity.

What is the Tenders Process?

There are four procurement procedures used to award contracts in the tendering process – the Contract Notice will state which will be used:

  • Open procedure – advertised tenders invite interested parties to submit tenders by a set date. These are evaluated and contracts are awarded to the winning party/parties.
  • Restricted procedure – this procedure takes two stages. In the first selection stage a short list of suppliers is identified – usually involving a Pre-Qualification Questionnaire (PQQ). In the second stage, suppliers are invited to respond to an Invitation to Tender (ITT). These returned tenders are evaluated and the contracts awarded.
  • Competitive Dialogue procedure – used for more complex procurements. Following OJEU Contract Notice and selection process, the awarding body negotiates with companies to develop suitable solutions. This process is followed by an Invitation to Tender and contract award. A good example might be a software project where public sector organisation knows what they want to achieve but not how it will be done.
  • Negotiated procedure – used in limited circumstances, the public sector body enters into contract negotiations with one or more suppliers.

Where to Find Tenders?

Public procurement regulations force all public sector organisations to publish contract notices that are over set values, or ‘thresholds’.

For example all UK public contracts that are above threshold must be advertised in the Official Journal of the European Union (OJEU) via a contract notice.

The UK’s home countries – England, Northern Ireland, Scotland, and Wales – all have their own procurement portals which publish tenders – sometimes the threshold is lower than for OJEU. For example English contracts worth over £10,000 are published, whereas OJEU contracts published on TED (Tenders Electronic Daily) are worth much more.

Some public sector bodies will also publish tenders on their own websites.

Tracker is also a source of tenders – our expert research team track down contract notices under the thresholds as well as high value contracts to create the UK’s most comprehensive database of public sector contracts.

What are the Business Benefits of Winning Tenders?

The UK Government currently spends around £700billion every year which makes them the largest purchasers in the UK in many industry markets. Tenders are the only way into winning some of this business.

It’s not just the value of the market that makes public organisations attractive customers. Consider these other benefits of having the government as your customer:

  • A public sector organisation will not go bust owing suppliers money.
  • Payment terms are generally more favourable.
  • Payments are better honoured than in the private sector.

Therefore public sector procurement can provide both high quantity and quality business opportunities.

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