When the economy took a turn for the worse and when the Conservative/Liberal Government limped to power in 2010, SME’s everywhere felt a collective chill.
Those that survived by writing tenders for public contracts were the most sensitive to the news that the aim of the new Government was to cut public sector costs in order to reduce some of the national budget deficit, the interest on which was proving crippling to an economy in decline.
Now in the middle of 2011 and those public sector cuts are in full swing. Whilst there has been a marked reduction in available tenders as a result of these cuts, the simple fact is that many services are still required from the private sector, cuts or no cuts. Care services, grounds maintenance and a wide host of services are cheaper to procure than to provide in-house, meaning that for many tendering SME’s, the work is still there, albeit vastly reduced and with the tendering environment increasingly competitive. Completing PQQ and writing winning tenders has never been harder.
So how are procuring parties selecting tenders in this new economic environment?
The key buying criteria, frequently bandied about across the public sector, is ‘the most economically advantageous tender’ or MEAT. But what exactly does this mean for SME’s setting out to write a tender?
The most economically advantageous tender does not necessarily mean the cheapest prices. The public sector has strict evaluation criteria, and these involve assessing value for money over the life of the tender, socio-economic considerations and environmental impact. (To name just a few). Offering the cheapest prices are often to your detriment where it restricts the services you are able to offer.
When writing a tender for public sector evaluation, consider the ways in which you can offer increased value. Increased employment opportunities in areas where the unemployment level is of concern can increase the value of your tender. Using apprentices, for example, helps to tackle the growing problem of youth unemployment and can help to score extra points at the evaluation stage. Methods to reduce your carbon footprint, including energy saving measures and more efficient vehicles, for example, all score well at the tender stage.
A commitment to life of contract savings, and identifying the scope for these, is also attractive to the buyer when analysing the total cost of awarding the contract to you. The promise of savings down the line as your service becomes more and more efficient can offset a higher start of contract cost to the buyer. Of course, you can’t just promise this in your tender and then not deliver. You will be expected to quantify and evidence these future savings where they exist.
Overall, consider the whole package of value you can offer and seek creative and innovative ways to stand out from the competition and at the same time, offer value for money to your buyer. That is not to say you should never offer the lowest price, as this too is very attractive in the current climate. Just ensure that if you do aim to do this, that there is no resulting lack in the service or product that you can provide at that price.