TechEast’s guide to the public sector procurement process
Good news: the government is committed to working with SMEs. According to Marketing Donut, the government wants SMEs to service 33% of its public sector contracts by 2020.
While larger corporations are still encouraged to apply for public sector projects, the government has taken several steps to “level the playing-field” for SMEs. These include the simplification of the bidding process, more SME-friendly payment terms, and the potential to split large projects into smaller jobs suitable for SMEs.
Though we are delighted by any moves that can benefit tech businesses – including SMEs and startups – the motivation behind these changes is anything but altruism. According to this report by Atos from the Institute of Directors, the UK has a real problem with productivity, and the government is hoping tech can solve it. Here’s what Theresa May has to say about it:
“This active government will build on Britain’s strategic strengths and tackle our underlying weaknesses, like low productivity. This is vital because if we want to increase our overall prosperity, if we want more people to share in that prosperity, if we want higher real wages, and if we want more opportunities for young people to get on – we have to raise our productivity.”
The report also points out McKinsey research estimating that digital solutions could “deliver productivity improvements worth at least $1 trillion across the global public sector.”
Though the public sector may carry connotations of stuffiness and slowness to change, winning a public sector project is desirable for many tech firms. Public sector projects are generally well-paid, with transparent contracts and prompt payments. Likewise, the long-term nature of the projects makes them a reliable source of income. There is also a certain amount of prestige associated with being a public sector supplier.
Winning public sector work may sound complicated, but it can be done! In fact, a number of TechEast members already supply digital services to public sector organisations. Ipswich-based digital agency, Free Rein, provides digital services to UK government business support teams, as well as the Ministry of Justice and Criminal Justice System. Digital healthcare solutions agency, Wiggly Amps, provides the NHS GP System of Choice framework.
So, how does a tech business become a supplier to the public sector? It all starts with the Digital Marketplace.
The Digital Marketplace is where public sector organisations go to find specialists who can work with them on tech and digital projects. There are over 310 pages of guidance on who can buy services from the Digital Marketplace, but it includes central government departments and local authorities, and wider public sector bodies.
Unfortunately, it’s not as simple as just listing your business. The Digital Marketplace is divided into three different frameworks, so tech suppliers need to be sure they’re on the right one. Here’s what they are:
- G-Cloud: For cloud hosting, software, and support
- Crown Hosting: For physical datacenter spaces
- Digital Outcomes and Specialists: For digital outcomes, specialists, and user research facilities and participants
Each of these frameworks have their own subtle differences, so for the purposes of this article we’re going to focus on G-Cloud.
Firms can only apply to G-Cloud when an Official Journal of the European Union contact notice has been issued. These notices advertise upcoming contract opportunities. Once this happened, firms will have 4-6 weeks to apply to the framework.
Applying to the G-Cloud framework involves answering many questions, and uploading clear descriptions of your business and services. Tony Addison, Director at Free Rein, said:
“Spend quality time getting onto the frameworks in the first place. Be clear and concise but don’t assume people reading it have either a detailed technical understanding or lack it. CCS wants as many public organisations to use this as possible so write for the wider audience, breaking services apart if that makes it clearer.”
If you don’t manage to successfully apply first time, don’t worry. On average, new contact notices are issued every 6-9 months. Once your firm and services are listed on the G-Cloud platform, buyers who want to engage you must enter into a contract and agree to your terms and conditions.
Check out the government website for thorough step-by-step advice to listing your services on the G-Cloud platform.
Public sector procurement can be time-consuming. Tony Addison of Free Rein said: “Getting onto the G-Cloud III framework was not a quick and simple task though as we needed to define our customised and bespoke services in an almost productised format.”
Getting onto G-Cloud is only half the challenge. Once your business is listed, it can take a while for the contracts to come in. Tony said it took Free Reign two years to win a contract on G-Cloud. If you don’t succeed straightaway, don’t just wait for the work to come in. Tony recommends “engaging with national departments and presenting your framework capabilities as a routine.”
The lengthy process of winning public sector work is due, in part, to the associated bureaucracy. Jon Wittle, managing director at Wiggly Amps, said the process involved reading “copious piles of documentation”. His following statement also gives a flavour for the levels of bureaucracy associated with public sector contracts:
“Like most businesses, there were large tracts of our day to day operations that were well understood, but not that well documented. Where the contracting Authority asked for evidence of how we did things, we found ourselves writing a lot of it up for the first time as well as having to look closely at our existing documentation. However, it’s not all bad. We really got into this, and the introspective look prompted a lot of improvements.”
Once you’ve landed a contract through G-Cloud or other framework, firms are required to pay a fixed rate of commission to Crown Commercial Services (CCS) who manage the procurement process. It’s not very much commission – 0.5% – but you should remember to factor this into your costs when you list services on G-Cloud. Your terms and conditions cannot be changed once the framework is live.
Though the process seems daunting, Tony reassures us “CCS support is very good”.
If you’d like a little more help, professional agencies exist to help you through the application process. A quick online search for “public sector procurement consultants” will pull up loads of results. However, fees for these services can often be expensive – and that’s on top if the CCS commission. If you have the time and the patience, you can win public sector contracts without the support of a consultant.