Smart business public tendering session
I had the pleasure to chair a session about the state of public tendering in Ireland at the Smart Business Show. The panel consisted of Ross McCarthy of Keystone Procurement, Tony Corrigan of Tenderscout and Tony Clarke of Kendlebell.
Learned a lot
Learned a lot. The size of public procurement in Ireland is 9 billion. With another 4 billion by the agencies. It is about 16% of GDP and a bigger chunk of GNP. That is a lot of money. Surprisingly only 26,000 companies are registered for e-tender and only 15% of those 26,000 is active.
Public tendering has been a hot topic on Smallbusinesscan and my impression was that SMEs still don’t get a look in. However things seem to start to change. And it is not all the fault of government. Apparently the quality of the tenders of Irish SMEs is not very good and needs to shape up if they want to be taken seriously.
Networking is important in public tendering
Tony Corrigan made the point, that tendering is not just about the tendering process. it is about getting to know the buyers and as with all business is about networking and account management (before you tender). You need to be know and you need to be liked and respected.
The other Tony said that public tendering is very different to “normal” tendering and different rules apply. Ross said that public tendering only makes sense after you have made an assessment if it makes commercial sense and compares favourably to selling to commercial clients. You need to score at least 90% on the tendering criteria. Below, tendering is pointless. It cost on average € 4,500 per tender to tender.
Public tendering is a skill
It is a skill, but once you are in and have learned the tricks, it is a serious opportunity. You should visit the public tendering workshops that Enterprise Ireland, Intertrade, DCU and/or the LEOs provide.
We talked about the problem of start ups getting access to public tender. If you are an innovative start up, you should look at the competitive dialogue route and find an innovate, buyer willing to work with you to develop a product or service that doesn’t exist using this innovation clause.
Consortia, professionalisation, social impact
We touched on consortia. Ross suggest that they can only work if the companies work to develop a commercial relationship that is as strong as a JV. What you build, when clustering successfully, is essentially a special purpose vehicle to win specific types of public sector work.
We touched upon the professionalism of the buyers, which is improving. We talked about cost/price being an important criteria for public procurement (maybe too much) and we talked about scoring social impact (which is not yet included as a criteria).
I am not doing the conversations and the questions of the audience justice. My conclusion is that is an underestimated opportunity, that the opportunity cost are still high and if you decide to go for it, you need to be professional about it. There is a learning curve, but once you are in, you have creating a competitive advantage. And now is the time.
If you have any question, I am not the one to ask. Here are the linkedIn profiles of the real experts.