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Public Sector Procurement: Challenges and Pathways to Success

Recently, I posted an article on my website that focused on winning Public Sector work in 2015. I received some interesting feedback subsequently from business owners, buyers and other interested parties. Notwithstanding the tales of frustration shared with me by some business owners, it is futile to be excessively fatalistic about tomorrow’s chances based on yesterday’s experiences. While a healthy degree of pragmatism is sensible, self-evaluation is important also. Are all businesses systematically taking the time to fully understand their lack of success and what they can do to improve their chances? The frustration that many businesses have experienced with pre-qualification criteria and with submitting tenders that are omitted because of technical non-compliance issues is understandable.

In tender competitions that I have designed and facilitated, such decisions are taken quite quickly once non-compliance is identified as the buyer is compelled to do so. The criteria are governance requirements that ensure public funds across the EU are allocated to suppliers that go through a robust evaluation process. In a public process, if the preferred supplier makes a serious error, the competition must either be cancelled and re-run (can only happen in certain circumstances e.g. there is no compunction to award the business) or the preferred supplier is excluded from the award process. This means there is a relatively high degree of fairness to competitive tendering processes in the Public Sector.

Procurement excellence

In general terms, the Public Sector sets a benchmark for procurement excellence in Ireland that many private sector companies could learn from. Public Sector bodies put time into ensuring they select what they believe to be the best service provider and that they are getting value for money from their expenditure. No organisation gets everything right and this is as true for the Public Sector as it is for the Private Sector. The Public Sector does waste money and get things wrong from time to time but so does the Private Sector. A key difference is that Private Sector errors rarely lead the news. A more positive difference is that Public Sector decision makers tend to collaborate and work as a team on procurement decisions. In the Private Sector, sometimes the buyer and the finance department are the only people involved in making a purchasing decision. While this agility is useful when buyers want to make things happen quickly, consulting widely can often mean better decisions are made.

As the Public Sector is what it is (whatever prospective suppliers think of this), SMEs can only change the outcome by focusing on themselves. SMEs must therefore learn to think like Public Sector buyers if they want to compete effectively.

A four-step process can be adopted to this end:

  • Research public sector procurement, its forms and constraints: determine the specific requirements to become a contender in the relevant types of competitions (when, why & under which conditions you should pitch).
  • Target relationship development activity: develop a strategy for the Public Sector and focus on target organisations that best fit the products and services a given company offers. A commitment towards relationship development here is important as it is the constant against which the other three points are plotted each time a business enters a competition.
  • Develop commercial response capability: determine how a high quality bid can be produced in response to a tender in a target organisation. Know the key attributes of a high quality bid.
  • Review and improve approach continuously: develop a review mechanism for successful bids and failures and systematically implement the findings from them. Strive to fail better.

Looking to 2015

Every company has to start somewhere and patience is key. If a company does not meet the pre-qualification criteria today, that does not mean it cannot start laying the ground with key targets in the Public Sector as early as it possibly can. A company that sets-up in 2015 can start early relationship development work in 2015 so it can compete from 2017 on once it has three years of accounts. Some people view this as a barrier to entry, others merely as a market development timeline.

For those that are established and wish to use tender processes to push for more business try the four-step process and let me know how you get on.

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