Public vs Private Sector Tenders: Key Differences You Need To Know

Broadly speaking, the public sector has certain criteria against which it must evaluate suppliers, whereas the private sector is less regulated when it comes to the bidding process. Although it is important not to make generalisations, there are some general divergences between private and public sector tenders and the overall procurement process.

We compare the key differences between private and public sector tenders, in addition to answering frequently asked questions about private sector tenders and how to access opportunities.

Public sector tender process

The process for submitting a tender to a local authority or government body is highly standardised and often includes a number of formal stages such as the Selection Questionnaire (SQ) stage, and then the Invitation to Tender (ITT) stage. The two-stage process allows the contracting authority to first shortlist a number of suppliers before making their final decision.

The standardised tender process will typically include the following:

• Standard company information and self-certification questions in the PSQ, such as mandatory and discretionary exclusion grounds, and evidence of economic/financial standing
• ‘Sign and return’ annexes certifying your tender submission – for instance, a form of tender and certificates of non-collusion/non-canvassing
• A pricing schedule or schedule of rates which bidders must adhere to over the contract or framework term
• Scored quality questions or method statements across a range of topics, requiring bidders to demonstrate how they will deliver the service.

Public sector bids must adhere to strict government guidelines, including the Procurement Act 2023. As a result, this process is highly regulated, and more transparent and standardised than private sector bids, including:

• Publishing opportunities on relevant government portals – Find a Tender and Contracts Finder, as contracts must be advertised
• Giving feedback on tender submissions, including written feedback on the quality questions within the bid
• A requirement to publish a list of successful and unsuccessful bidders for contracts above a certain threshold
• Consideration of social value for qualifying tender opportunities, typically comprising 10% of overall marks.

Private sector tender process

In contrast, the tendering process in the private sector is not subject to the same restrictions or regulations. Private companies are still obligated to treat the tenderers fairly. For example, they must consider all compliant tenders that have been submitted prior to the deadline, or face challenges or claims of litigation from bidders.

However, the tendering process in the private sector is more flexible, and some may say it invites dynamic approaches or entrepreneurial flair. Essentially, buyers can set their own guidelines and evaluate the submissions how they see fit.

In summary, in contrast to public sector, private sector tenders typically:

• Do not advertise tenders in a publicly accessible location such as Find a Tender or Contracts Finder, instead relying on supplier networks and existing relationships, and as such can be harder to find
• Are not obliged to publicise the winning bidder and individual feedback for each submission, making it more difficult to assess what bid content scored well
• May not publish a formal evaluation split between quality and price – or submissions may be heavily weighted in favour of quality.

As such, private sector tenders could be described as less transparent than public sector procurement.

Typical questions about private sector tenders

What strategies help win private sector tenders in competitive markets?

Unsurprisingly, the same bid writing strategies for winning public sector also apply to the private sector in competitive markets, including:

• Understanding the client by researching their priorities, engaging early and mapping the evaluation criteria
• Integrating unique selling points into the written narrative, supported by evidence (such as testimonials and KPIs), quantifying value savings and offering innovative solutions as part of your service model
• Demonstrating credibility and capability by highlighting your capacity and resources, account management approaches and measures for ensuring transparency in delivery.

How can businesses effectively access private sector opportunities?

Accessing private sector tender opportunities can be more challenging than public tenders. Private procurement tends to place greater emphasis on relationships, is less formalised and based on credibility and public status rather than compliance.

Alongside word-of-mouth and networking, organisations bidding for public sector work may consider applying to preferred supplier lists and frameworks for private clients.

Equally, some businesses subscribe to market intelligence platforms which may give insight into private sector tender opportunities – for example, Glenigan.

How do government contract regulations affect private sector firms?

Government contract regulations may impact private sector firms by influencing:

• The ‘bid/no-bid’ decision, as some contracts require bidders to meet mandatory minimum criteria or qualification requirements
• General business operations, for instance, gaining certification for an area of the business, such as Cyber Essentials Plus
• Contract compliance management, as KPI failure or a public dispute could damage a firm’s standing and lead to being placed on the public debarment list.

Should your organisation target public or private sector procurement?

It may be theorised that if the tendering process is a means to an end, the public sector is concerned with the means, whereas the private sector is focused on the end.

Private corporations are usually guided by profit as a priority, and their overarching aim is to select the most competitive bidder who can deliver the best value for money possible. Alternatively, public sector commissioners such as local councils must decide whether the bidder can meet all the statutory and regulatory requirements imposed on them.

For example, the Public Services (Social Value) Act requires those who commission public services to think carefully about securing wider social, economic and environmental benefits for the local area. As such, the content of their bids and tenders are designed to reflect this. It is almost certain that a public sector tender would include at least one question related to social value, alongside other ‘softer’ questions related to community engagement, partnership working and added value for the council.

On the other hand, questions within private sector bids are more likely to focus on ‘harder’ facts, and specific commitments related to innovation, technology, efficiencies and commercial elements. While there may be a question around corporate and social responsibility, this is unlikely to have as much emphasis as social value in public procurement.

Generally, the financial elements (such as pricing schedules) of private sector bids will hold more weight than in the public sector, and can impact significantly on the overall score. Commissioners want to know that bidders can propose a good quality service, which will increase returns for company owners or shareholders. Marking schemes created for the private sector will reflect this overarching goal.

However, for a public sector bid you will have to demonstrate that you can go above and beyond these basic requirements, by exploring the means by which your service is delivered, and the benefits this will deliver for the wider community.

Bid support with public and private sector tenders

Regardless of whether you are tendering for private or public sector contracts, it is important to focus on answering the question in a clear, concise and comprehensive manner, highlighting the benefits of choosing your company to deliver the best ‘value for money’ solution to the buyer..

Executive Compass work with companies bidding for both public and private sector tenders. To discuss how we can help you to secure a contract, contact us today.