Public expenditure is increasing as the government launches new policies for health, education, transport and policing. A large number of contracts, for work ranging from construction to supplying IT systems, are up for tender.
Chancellor Gordon Brown has announced a loosening of the regulations defining tenders to give SMEs the chance to bid for more work.
While the prospect for bidding for large contracts may seem daunting, the hoops and hurdles are not insurmountable, even if a smaller business is competing against bigger, more experienced players. Here are a few practical pointers:
You don't have to be the cheapest
Cost is a critical component of any public contract, but this doesn't mean that the cheapest is seen as the best. Value for money is the watchword.
The government is seeking to invest for the long term, but there must be no suggestion of cosy relationships.
Private sector virtues and expertise
From inside the government, the private sector is viewed positively. In the main, companies are seen as dynamic, flexible and keen to apply modern procedures.
The government is trying to operate a form of market discipline through initiatives and targets. Growing businesses should show the principles of best practice and meet the needs of the public sector.
Talk the same language
In this more market-friendly culture, the government has a new lexicon of catch phrases, such as 'best value' and 'joined-up government'. In practice, it means initiatives which cross departmental boundaries and challenge deeply embedded practices.
Government departments feel obliged to take these initiatives onboard, but they can increase the workload for civil servants and demand new skills.
Growing businesses that understand the phraseology and offer ways of resolving the challenges stand to win contracts.
Pick your team carefully
Every member of the bidder's team should have a clearly defined role. When choosing a team it is important to take into account the government department concerned.
It pays to talk to officials before making a formal tender to build up a picture of the department's culture and core beliefs. Failure to ascribe clear roles and accountability could cast doubt on the bidder's competency.
By adopting these basic principles, a growing business can earn respect and gain a foothold in the potentially lucrative public sector market.
Nitin Joshi is a partner at insolvency specialist PKF.
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