Tenders are worth €9bn here each year - this is how smaller firms can win more of them

IN IRELAND, PUBLIC tenders are worth €9 billion per year. However, only 10% of SMEs compete for the opportunities public procurement represents.

This is very much in keeping with international trends. Globally, the value of the tender pot is at least $3.1 trillion, but only one in 10 SMEs actively engage in B2G (business to government) marketing.

There are numerous reasons for this low level of participation, but often these are myths rather than a true reflection on the reality of public procurement:

Myth: Tenders are only won by large corporations

Truth: Large companies tend to win tenders because they are the main companies competing for them. The average amount of proposals for a tender in Ireland is four, and a quarter of tender competitions only attract one proposal. It’s a simple fact that if more SMEs competed for tenders, more SMEs would win them.

Myth: Tenders are complex

Truth: I’m not going to argue that the public procurement process is perfect, but it is much simpler than it is given credit for. Government tenders all follow the same process and involve a tender notice and a proposal. Once an SME engages with tenders and understands how they work, competing for them becomes a hugely scalable process.

Myth: There are no tenders for certain products and services

Truth: So far this year, there have been tenders for silk ties, chandeliers and turquoise jewellery, alongside tenders for digital marketing, industrial cleaning services and environmental consultancy. Quite simply, there are tenders for everything. Governments will always have a need for goods and services, and they actively want to procure these from SMEs.

Setting up a system to win tenders

The best way for SMEs to win government tenders is to be strategic in their approach.

Step one: Qualify tender opportunities

There are numerous platforms that list open tenders around the world, but just because you see a list of tenders your SME could compete for doesn’t mean you should.

Good questions to ask yourself include about each and every tender opportunity include:

• Is this tender really an ideal lead for my business?
• What is the contract value? It’s unlikely that you’ll be awarded a contract with a value of more than 50% of your turnover, but this requirement is easy to fulfil by collaborating with another SME
• Is my team big enough to fulfil the contract? Again, collaboration is helpful to fulfil this requirement
• Can I demonstrate how my business has done similar work for other clients?
• Would my business score well on the tender evaluation criteria?
• Are there requirements, such as ISO 9001, that I need to meet?
• Do I have an existing relationship with the buyer? Do my competitors?

Going through this rigorous questioning process will ensure that you identify the tenders that represent the best opportunities for your business.

Step two: Set up a tender library

Every proposal you submit will require you to include the same documents. Compiling a tender library will save you time as you only need to do this once, and then keep it on file for every subsequent tender competition.

A tender library includes:

• CVs of your team – these are not cut and pasted from LinkedIn but tailored specifically to show off your SME’s expertise and ability to fulfil the tender
• Case studies – highlight how you have helped other clients reach their desired outcomes
• Certificates – include details of industry bodies your belong to
• Procedures – procurement officers want to be assured that you’re a “safe pair of hands”; share details of your health and safety policies and other procedures

Step three: Ask for feedback

One of the advantages that B2G offers, which selling to consumers or other businesses doesn’t, is that you’re entitled to receive feedback about your proposal.

I’m constantly surprised that so few SMEs do this. A SME may miss winning a tender by one point. The factor that separated the winning incumbent from the other competitors is information the procurement officer is allowed to share.

Once you know whether the winner had a better template, was priced differently, included more case studies or so on, you can tailor your next proposal to be the same.

Competing for government tenders is the smart way for SMEs to increase their revenues, strengthen their sustainability and grow jobs. Public procurement is the largest sales pipeline on the planet, after all.

Tony Corrigan is CEO of Tenderscout.

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