Guide for VCSE organisations on how to bid and win contracts with government
Applies to England
Foreword from Claire Dove CBE
VCSE Crown Representative
As the VCSE Crown Representative, I act as an intermediary between government and the charity and social enterprise sectors to champion the Public Services (Social Value) Act and improvements in commissioning and procurement practices.
The expertise of charities, public service mutuals and social enterprises (‘VCSEs’) means they are often ideally placed to help create compassionate, responsive and efficient public services. I am working alongside the Cabinet Office and the Department for Digital, Culture, Media and Sport (DCMS), other government departments and the sectors to unlock the barriers that have prevented VCSEs entering the public sector market in the past.
We have created this guide because we are committed to bringing more charities and social enterprises into public sector supply chains. I hope it helps your organisation on your journey to becoming a successful government supplier.
Follow me on Twitter @VCSECrownRep and my GOV.UK page for updates. To keep up to date with all government procurement follow @gov_procurement on Twitter
If you are a charity or social enterprise looking to build your experience and credibility, boost your sustainability and diversify your income, and if you are considering exploring the opportunities of selling on a large or small scale to central Government, local authorities and/or other public sector buyers, then this guide is for you.
Central Government has committed to diversify its supply chains. We have also committed to ensuring contracts are awarded on the basis of more than just price, but a supplier’s social impact too, giving VCSE organisations much deserved recognition for their positive actions in society. VCSEs can have real impact in public sector procurement. This is why we have changed the way we buy goods and services to help more VCSEs and SMEs to bid for our contracts. These changes include:
building on the Social Value Act to mandate all central government departments to explicitly include social value in all major new procurements
buying in a simpler and quicker way by abolishing pre-qualification questionnaires for low value public sector contracts
requiring the public sector to publish its contracts on Contracts Finder
requiring the entire public sector supply chain to be paid within 30 days
So now is a good time to find out about opportunities that are available and learn how you can bid for public sector contracts.
This guide will cover how to work with public sector buyers, how to get ready for tender, what buyers are looking for and 10 top tips for tendering.
Find out about PPN 06/20 and the new Social Value Model here
How do I work with the public sector?
To be ahead of the game, spot opportunities before they have formally gone to market. Early-market engagement is your opportunity to shape the formal tender. The three main ways of engaging early are as follows:
Talk to commissioners or get involved in designing services (‘co-design’) before they write the contract specification. Events range from information gathering to putting forward proposals on solutions. Search “early engagement” on Contracts Finder and research and talk to commissioners you might want to work with for more information.
Attend a ‘meet the buyer’ event. These allow you to talk to buyers about how to bid, what their organisation’s future plans are and how they approach public services. It’s also an opportunity for buyers to learn about your services and products. These events are advertised on the relevant organisation’s website. You can also search “meet the buyer” on Contracts Finder for more information.
Participate in a bidders’ event. Buyers frequently run events immediately before or during the early stages of a tender process. The purpose is to explain the documentation and objectives of a specific project. It offers you the chance to ask specific questions about the process. Search “future opportunity” on Contracts Finder for more information.
Contracts Finder is the government’s single online portal on which contracts valued above £10,000 in central government and above £25,000 in the rest of the non-devolved public sector are listed. It’s free to use to find opportunities. You don’t have to register but if you do you can set up an account to have new opportunities that suit your organisation emailed to you regularly.
The contract notice contains all the information about the opportunity being advertised, including the name of the buying organisation, what they’re seeking, any selection criteria, the scope of the contract and whether the buyer has identified it as being suitable for VCSEs or SMEs. We recommend filtering the search function of Contracts Finder by selecting the “Suitable for VCSEs” tag but it is worth looking at other contracts too - you are not restricted by whether or not opportunities have been tagged this way.
Take a look at notices for past opportunities and awards on Contracts Finder. If your organisation is experienced in winning and delivering contracts of a similar size and type to those you see, then consider bidding for contracts to supply directly to the government.
Public sector buyers may sometimes know that they require a service to be fulfilled or work to be completed, but they may not know all the details up front – for example, how many suppliers they need to fulfil the service. In these cases they may issue a Framework Agreement.
A Framework Agreement is an ‘umbrella’ agreement. A lead buyer agrees terms with one or more suppliers via a procurement (in line with the rules of the Public Contracts Regulations 2015) and then they, and any other pre-advertised organisations can purchase goods or services from the suppliers on the framework agreement, subject to these terms. Each subsequent purchase forms a contract.
This means public sector organisations can request your services using shorter, simpler processes saving you and them time. There can be further competition for contracts but this is only between businesses on the framework.
The Crown Commercial Service manages a number of frameworks for central
government. Find out how to access current opportunities here. See their future plans for new ones here. Other government and wider public sector buyers also advertise framework agreements on Contracts Finder.
Register on Dynamic Purchasing Systems
The Dynamic Purchasing System (DPS) is a procedure available for contracts for works, services and goods commonly available on the market. As a procurement tool, it is similar to an electronic framework agreement, but new suppliers can join at any time.
However, the DPS has its own specific set of requirements. It has to be run as a completely electronic process. It should be set up using the restricted procedure and some other conditions (as set out in Regulation 34 of the Public Contracts Regulations 2015).
DPS use a two stage process where firstly, all suppliers who meet the selection criteria and are not pre-excluded must be admitted to the DPS. There is no limit to how many suppliers can join a DPS. Unlike frameworks, suppliers can join a DPS at any point in its lifetime.
Individual contracts are awarded during the second stage whereby the buyer invites all suppliers on the DPS to bid for the specific contract.
Why is this useful to VCSEs? Dynamic Purchasing Systems help to streamline the procurement process for both suppliers and buyers. Suppliers don’t have to demonstrate their suitability and capability every time they wish to compete for a contract within the system. Find out more about Dynamic Purchasing Systems here.
Join the supply chain
With a bit of research, you could join a government supply chain. Search Contracts Finder for contracts that have been awarded to big businesses. Then look on their website for contract opportunities or approach them with an offer to work with them. Working with large suppliers can be a good way to build up experience of working directly with government.
Many industry bodies and trade associations also advertise opportunities in supply chains. So if you are a member, keep an eye out for opportunities.
Government has been working with larger suppliers to improve the transparency of supply chains. We have been encouraging them to use Contracts Finder to advertise and to promote any subcontracting opportunities available. This feature is still in its early stages, but worth looking out for.
How do I get ready to tender?
Take the assessment of your tender seriously. Understand that no matter how good you are, you will not win in a competition unless you make your strengths clear in the assessment.
Read carefully through all of the tender documentation at the beginning, including checking whether you meet the stated minimum requirements for things like insurance, compliance with legislation and your organization’s policies and procedures.
The process will be set out clearly in the documents. Some larger opportunities will use a two-stage process starting with standard Selection Questions (also known as a pre-qualification questionnaire (PQQ)) to generate a shortlist of bidders to be invited to submit a full tender; others will go straight to full tender. Cabinet Office has published a set of standard Selection Questions which most public sector buyers are expected to use. You can find these here.
Procuring authorities must treat every bidder equally. They will evaluate suppliers on what they read in the tenders only, so it is really important that you answer the questions fully. Think of it as a job interview or exam: make sure you answer the question, give evidence of your experience and examples of your successes.
Don’t be afraid to ask questions, government buyers will be more than happy to answer them.
What are public sector buyers looking for?
Value for money
Public sector buyers are spending taxpayers money. Therefore they have to show they have delivered the best value for money.
Value for money is not just the initial price but is based on a combination of quality and price throughout the life of the contract. If you can demonstrate your approach is cost-effective and helps the government make savings throughout the life of the contract, it will strengthen your application.
Buyers are looking for quality goods and services that meet the needs of end users.
What is social value? One way of describing the social value derived from procurement is the positive legacy created through the performance of a contract.
There are three categories of social value:
social (e.g. activities that promote a united community)
environmental (e.g. efforts to assist the community in reducing waste or pollution)
economic (e.g. training, employment or apprenticeship opportunities for disadvantaged groups)
Since 2013, the Social Value Act has required social value to be considered in the design of some contracts. In June 2018, central government announced it would go further and evaluate social value when awarding most major contracts. Four thousand commercial buyers across government are being trained to take account of social value and procure successfully from all types and sizes of businesses and organisations including charities and social enterprises. Government departments will be expected to report on the social impact of their major contracts.
Social Value Model
We want to ensure there is a consistent approach to applying social value in procurement activity across central government. To achieve this, we have developed a simple and straightforward tool for buyers to bring all departments up to a minimum level of operating. A consistent approach across government means it will be more straightforward for all types and sizes of suppliers to bid for government contracts.
We have designed the new model to fit easily within existing procurement processes, minimising the impact for suppliers bidding for government contracts and for commercial teams. You can find the model and associated guidance here.
We have designed the new model with input from the Federation of Small Businesses, the SME Advisory Panel and the Voluntary, Community and Social Enterprise Advisory Panel. It is based on qualitative responses from bidders and not on volumes. This means that larger suppliers are not able to win on scale alone. All bidders must set out what they will deliver and how they will deliver it. It is this information that will be scored in bid evaluations.
Find out more about the new social value model and guidance on how to use it here
Government departments must report their payment performance on a quarterly basis. You can find this information on gov.uk.
All public sector buyers must include 30-day payment terms in public sector contracts, and require that this payment term be passed down the supply chain. Where this is not happening, we encourage businesses to raise problems with the Public Procurement Review Service, who will investigate.
Any supplier who bids for a government contract above £5m per annum will be expected to pay 95% of invoices in 60 days across all their business. Any supplier who is unable to demonstrate that they have systems in place that are effective and ensure a fair and responsible approach to the payment of their supply chain may be excluded from bidding.
Public Procurement Review Service
The Public Procurement Review Service (PPRS), formerly known as the Mystery Shopper Service, allows government suppliers and potential government suppliers to raise concerns anonymously about potentially poor public sector procurement practice. You can find more useful information on the PPRS on their website here.
This service allows continual improvement of government procurement practice, and it is free to contact them at firstname.lastname@example.org
10 top tips for tendering
1. Find Tenders by:
registering on the government’s free website www.gov.uk/contracts-finder
allocating someone with responsibility for searching opportunities for 15 minutes, twice a week and use the email alert service
taking action immediately when opportunities arise
2. Carefully weigh up the decision to bid by considering:
what the competition is going to be like?
will this new business have positive or negative impacts on your other work?
do you or your team have the skills in bid writing and bid management (it can take up to 10 days to construct a good bid and sometimes more for larger and complex contracts)?
can you realistically win this bid?
3. Use Contracts Finder effectively by:
registering your interest as soon as possible so that you can receive the Q&A material and review any changes along the way
using the portal to seek clarity
checking the portal layout and how questions need to be answered
checking if boxes have word limits and formatting restrictions or if PDF attachments are required
not waiting until the last minute by uploading the tender the day before the final deadline
4. Develop an effective plan by:
allocating someone with good organisational skills and the authority to manage the tender writing process
ensuring the plan is realistic with dates of what needs to happen, and when
giving clear deadlines for each section of the bid writing process
sticking to the timeline
5. Understand the buyer by:
finding out what is important to the buyer and the organisation e.g. core values, key objectives, the type of solution they are looking for – departments publish a lot of information so use gov.uk to research
reviewing the invitation to tender, website, press coverage, current suppliers
trying to find out who the current supplier is and how they are performing
focusing on what the buyer is looking for when writing the bid
6. Hold an initial meeting with the team to discuss the bid including:
setting out why you should be bidding and how you can meet the needs of the buyer
sharing the knowledge gathered on the buyer and what they are looking for
allocating key tasks and deadlines to the team
outlining the priority of the bid writing process
giving advice on what to focus on and how best to draft answers
having someone review the bid two thirds of the way through the process
7. Answer the question and provide good evidence by:
making sure you answer the question asked (people with subject matter expertise often do not)
providing the most recent and relevant evidence, including quotes and case studies
not being tempted to use ‘hollow statements’ e.g. customer service is at the heart of all we do - without backing them up with evidence
trying to provide the answers that meet all requirements, but with significant added value, to demonstrate to the buyer the extra benefits with contracting with you
8. Always use plain English by:
keeping sentences short (15 to 20 words) and paragraphs short (6 to 7 lines) when constructing the bid
using the correct grammar and spelling checks so that buyers don’t start to question your accuracy and attention to detail
avoiding jargon and complex technical language that buyers/evaluators may not understand
Remember, initially buyers have to scan bids.
9. Use formatting tools to make it easier for buyers to review by:
ensuring good use of headings and subheadings
displaying clear headings in bold
trying to use numbering and bullet points
using bold font to highlight key information in the bid
Remember, if the document is clear and easy to read it tells the buyer you are likely to be easy to work with.
10. If the bid fails, get feedback and learn from the experience by:
requesting feedback from the buyer
setting up a ‘lessons learned’ meeting with the team
keeping the documents on file and use them as a learning tool for the next bid