Private sector tendering – where the buyer is a private sector organisation – works differently from public sector tendering. Since it does not tend to avoid the spending of public funds, it is governed by fewer regulations which means it is less restricted.
Unlike public sector bodies, private sector businesses do not need to offer an equal playing field to suppliers. This makes private sector tendering extremely lucrative and an excellent market for SMEs looking to boost their procurement possibilities.
Supply chain opportunities often have a private sector organisation as buyer, something that SME businesses in procurement should take advantage of.
Would you like to find more opportunities in the private procurement marketplace? Find out how below.
How the supply chain works
Private and public procurement work differently.
Many private sector tenders are issued as part of the supply chain for larger projects. Opportunities for projects like HS2 will be advertised by large private sector companies that require additional or specialist support.
So how does the supply chain and private procurement work? Often, as with HS2, the overall project is in the public sector. A private sector company or companies win the initial large public sector contract, but cannot themselves provide every aspect of the goods, works and services required. The private sector company therefore seeks subcontractors, and in so doing becomes a buyer for a private sector tendering opportunity. Sometimes the subcontractors then need further to subcontract for aspects of the contracts they have won and so on – a supply chain is formed.
At each stage, a private sector company becomes a buyer and becomes involved in private sector tendering to find suitable suppliers.
Procurement in private sector: HS2 Opportunities
Prime examples of private sector procurement opportunities can be seen in the UK government’s HS2 project.
High Speed 2, more commonly known as HS2, will be a high-speed railway network that will link routes between London, Birmingham, the East Midlands, Leeds and Manchester.
HS2 contracts worth £6.6bn were awarded to larger companies in 2017 for them to distribute to smaller companies. This was welcomed by the Trades Union Congress which said that subcontracting would “maximise the potential benefits of HS2 to the UK supply chain”.
Many SME businesses will benefit from this agreement and from the HS2 project as they will be the best match for specific operations that require experts and specialists.
Tips for success: private sector tendering
Like public sector procurement there are many things an SME can do if it would like to win opportunities with the private sector marketplace.
There are certain things your business can do to get ahead of the competition. Offering the private sector added value will give your business an edge over competitors. Private sector buyers tend to be guided by profit and price, but if your business offers something unique as part of the contract agreement they may be swayed towards your organisation.
Make sure that when you are tendering for private sector contracts you explain how your product or service works completely. For example, if your business sells furniture, does it also set up the furniture? Do your employees remove and dispose of the packaging carefully? Do you offer a guarantee?
These things are classed as added value and may be the reason why your tender price is more expensive than a competitor.
Always mention the add-ons which are included in your price. By giving the buyer a full picture of all that your product or service can offer, you are differentiating your business from the competition.
Private v public sector procurement
Procurement in the public sector is a great way to grow your business and raise your profile in the supply chain, however, if your business wants to expand, private sector tendering can help you do this. We post thousands of supply chain tenders that could be valuable to your SMEs.
For those interested in winning supply chain contracts pay close attention to the infrastructure sector. In the government’s latest Spending Review, the Chancellor of the Exchequer, Rishi Sunak announced a once in a lifetime investment in infrastructure throughout the country. It is therefore important that you have visibility of where infrastructure investment is being made and by whom. Areas set to grow include private housing, public non-residential, and civil engineering with much of this work scheduled to begin in 2021.
During the Spending Review announcement the Chancellor gave details of the much anticipated National Infrastructure Strategy, which sets out the Government’s plans to ‘level up’ the country and achieve net zero emissions by 2050.
He also launched a new £4 billion Levelling Up Fund, which the UK government will invest into local infrastructure. Mr Sunak said:
“Any local area will be able to bid directly to fund local projects.
The fund will be managed jointly between the Treasury, the Department for Transport and the Ministry of Housing, Communities and Local Government – taking a new, holistic, place-based approach to the needs of local areas.
Projects must have real impact.
They must be delivered within this Parliament.
And they must command local support, including from their Member of Parliament.
This is about funding the infrastructure of everyday life:
A new bypass.
Upgraded railway stations.
More libraries, museums, and galleries.
Better high streets and town centres.”
New to procurement in the private sector?
Then you might be wondering, how can your business find private sector tenders?
Finding tendering opportunities in the private sector starts with having access to the right intelligence, and being able to make smarter, faster and more informed decisions.
Our market leads tool gives our users instant visibility to hundreds of private sector leads. This tool will give your business a heads up over competition which means your business can start conversations with buyers before they have officially tendered.
Tracker makes it easy for you to find private sector tenders at the click of a button. Don’t take our word for it. Sign up for a free trial today! Try Tracker for Free
Want to win more private procurement opportunities?
If you are already winning private sector supply chain tenders but want to expand your reach. Commercial Projects delivers private sector leads to your inbox daily.
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With our Commercial Tenders tool you can view all planning applications and decisions within 24 hours of publication, allowing you to proactively source valuable opportunities before the sub-contracting stage. Plus, we provide named contacts for key decision makers, influencers and bidders.
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Interested in our Commercial Tenders tool? Discover more about how it works by booking a one-t0-one demo with our expert private sector procurement team.