A guide to selling to the public sector

In 2019/20, the UK public sector will buy l To appreciate that public sector buyers are an enormous £848bn of goods and subject to a great deal of scrutiny and tend to be services. 1 To get a slice of that level of risk averse. Don’t be fooled by an emphasis on spend in the future, you need to under- innovation if you see it – if innovation means risk, stand how the public sector buys. It’s not they’ll probably ditch the innovation... a subject for the back of a postage stamp, but let’s explore the basics. SEEK AND YE SHALL FIND Now you’re ready to go, where do you find BE PREPARED opportunities? With the public sector, there’s “Public sector” often conjures up images of fusty always emphasis on the formality of selling – Whitehall corridors with stuffy civil servants having to respond to an invitation to tender (ITT) running bloated departments. In fact, there or request for proposal (RFP). But, like any are thousands of organisation, public organisations in the sector bodies will go public sector, from tiny “Selling to the public sector is no through stages in their to mammoth, many different to any other market. You procurement before they running tight ships. first need to be sure that you have issue any formal tender The Public Sector Classification Guide, a defined offering or capability” documentation. They will identify the need to published by the Office buy something, define for National Statistics, 2 is a good place to get a feel and justify the requirements and the budget, and for the extent of the sector. Selling to the public gather information before they seek formal sector is no different to any other market. You first proposals, choose a supplier and, ultimately, need to be sure that you have a defined offering or award a contract. capability – you need to know what you are selling, Although there are strict rules about fairness who might need to buy it, why and when they and transparency in the public sector, suppliers would buy it, and what is different and better about that are well-informed about the procurement your offering than your competitors’. You also need: from early on are better equipped to produce a l To be crystal clear about the benefits, outcomes winning proposal. So, as in any sales situation, and results that you will help the buyer achieve – you need to make yourself visible to your buyers are seeking value for money, which may potential public sector buyers and demonstrate be assessed purely on price, but complex value to them. purchases will be decided on the basis of a mix Make use of conferences, industry forums and of price and quality networking opportunities (online or offline). l To have or be able to create credibility – buyers Make direct contact and request a meeting. want to be confident they are making a sensible Start a conversation. choice with an appropriate level of risk. Your As well as networking through standard sales track record, your credentials and the way you routes, public sector buyers often undertake handle yourself throughout the procurement pre-tender market engagement. This involves process will make a difference formal interaction with the supplier

marketplace and may be advertised via a prior information notice (PIN) – currently advertised through the Official Journal of the European Union (OJEU). You can also use Freedom of Information Act (FoIA) requests to learn about existing contracts and financial values. Annual reports and strategies provide information about objectives and budgets. PUBLIC PROCUREMENT REGULATIONS All public sector bodies must comply with the UK public sector procurement regulations. These were last updated in 2015 (and in 2016 for utilities and concession contracts). The UK regulations are based on the EU procurement regulations, but also include some UK national legislation to make life easier for small and medium enterprises (SMEs).

So, every public sector buyer (usually a procurement officer) must choose and follow the most appropriate procedure for whatever they need to buy. The choice will be dictated by a “Whichever way the buyer decides range of parameters. The first parameter is financial value. There is a published set of to come to market, the supplier will have to read and respond to a range of published documents” thresholds over which a strict procurement protocol must be chosen and followed. Ensure you are aware of the latest values published by the OJEU. 3

The second parameter is the type of purchase. The default procedure is the open procedure, whereby anyone can respond to the published ITT or RFP. Other options are: l Restricted procedure, for when there is a specific need to pre-qualify and/or there would be a large number of responders l Competitive dialogue or competitive procedure with negotiation, for when the nature or complexity of the requirement means standard solutions need adaptation or the requirement needs further discussion and development l Light touch regime, for certain service types including health, social and education l Innovation partnership procedure, for when there is no existing solution.

It is up to the buyer to decide the appropriate route. It is up to you to understand how to respond in a way that is compliant and optimises the probability of winning.

Each procedure has an associated timeline for each stage. There is an option to use an SARAH HINCHLIFFE is a accelerated procedure if the procurement can be director of i4 Consultancy and Design, which helps companiesjustified as urgent. You need to understand the win more business through timelines and be able to respond within them. sales and bid excellence.

OJEU opportunities are published using a You can email her at sarah@ i4salesperformance.co.uk or contract notice. These are found on Tenders visit i4salesperformance.co.uk Electronic Daily (TED), the official OJEU website. 4 There are many other online services offering aggregated views of all tender opportunities. Commercial service providers include Tracker from BiP Group5 and Tenders Direct.6 Free services are provided nationally by Sell2Wales, 7 Public Contracts Scotland8 and eSourcing NI9 (Northern Ireland). These sites also publish PINs (which may just be for information or may be the first stage in a restricted procedure or competitive procedure with negotiation) and contract award notices.

In England, Contracts Finder is the portal for tender publication – contract notices must be published on Contracts Finder within 24 hours of publication elsewhere (OJEU or other advertisement). This applies to all opportunities over £10,000 for central government and £25,000 for other government bodies. THE RISE OF FRAMEWORKS Frameworks are a useful device for both buyers and suppliers. They are an OJEU-compliant way of pre-selecting suppliers and then allowing buyers to choose from those suppliers either by running mini-competitions (which are not always that “mini”), asking clarification questions or by simply placing a call-off order. Buyers will generally try to find a way to procure through a framework as it is the easiest approach.

You will need to watch for the window of opportunity to apply to join a framework. You may also come across dynamic purchasing systems (DPS), which are like frameworks but allow suppliers to join at any time subject to a compliant application. A RAFT OF PAPERWORK Whichever way the buyer decides to come to market, the supplier will have to be prepared to read and respond to a range of published documents that include: l Instructions to tenderers: how to ensure a compliant response (a must if you are not to be eliminated) l Statement of requirements: one or many documents describing what the buyer wants to buy either described as features or functions, or as outcomes or results l Lots: descriptions of any lots (sub-sets of requirements). Procurement regulations encourage buyers to divide their procurements into lots to encourage more SMEs to participate l Evaluation criteria: confirming exactly how the responses will be assessed to decide on the most economically advantageous tender (MEAT). The evaluation criteria should show the ratio of price and quality, and the exact mechanism for scoring and reaching the highest

score. Price may be the straight price or, increasingly, the total cost of ownership (TCO). Quality can include various factors, such as products and/or service capability, delivery methods, quality, track record and social factors l Terms and conditions of contract: either draft or non-negotiable. Early in the process (depending on the value and procedure being followed) you may have to complete a pre-qualification questionnaire (PQQ), sometimes called a selection questionnaire (SQ). These contain a range of mandatory and discretionary criteria that suppliers must meet to be able to continue. They include company information and due diligence questions about legal and financial standing. They may also explore your basic capability to satisfy the requirements. Where this information is not obtained in advance via a PQQ or SQ (or because it has been done when establishing a framework), it will be required as part of the response to the ITT or RFP. There are various mechanisms in specific industries and within the EU to reduce the duplication involved in creating PQQs and SQs through centralised reusable documentation. Do your research to see if there is a route for you, as it could save time.

During the response process and depending on the procedure, as well as submitting the proposal/ bid/tender, you may have to give presentations or demonstrations, participate in negotiations or reverse auctions, or submit a best and final offer (BAFO). REACHING A VERDICT The buyer that has been the point of contact for the formal proposal response will organise the buying committee (on which they may or may not participate) to assess the proposals in accordance with the published evaluation criteria. The proposal may be split up and scored by individuals and then reviewed independently. These measures are designed to ensure fairness – the evaluation approach is a logical mechanism to enable the buyers to reach an unbiased decision.

However, you will ideally have got to know and understand the members of the buying committee early in the procurement exercise – early engagement enables you to build understanding, value and empathy into your proposal, which can make a significant difference to the buyers’ perceptions. WINNING (AND LOSING) Once the buyers have reached a decision, they will notify the winner(s) and the loser(s) via a decision notice. There is always a 10 day standstill period after this announcement to give unsuccessful SELLING TO THE PUBLIC SECTOR

Pros Massive expenditure Persistent marketplace Good payment ethic (within 30 days for SMEs) High likelihood of repeatable success once established Focus on fairness

Cons Long timeframes High sustained effort Complex and rigid processes Political factors can have unexpected consequences High visibility of failure

bidders the opportunity to object if they believe there has been some unfairness in the process. There is case law in the UK showing this can be a successful approach, but only make a challenge if you are sure you have a genuine case, not just because you are upset about losing.

After the contract is awarded, the buyer is obliged to publish a contract award notice confirming the date the contract was awarded, the award criteria, the number of offers received, the name and address of the successful tenderer(s) and the value of the contract. The buyer must also feed back to the unsuccessful bidders their scores against the evaluation criteria, the winning scores and why there was a difference.

Unfortunately, there are variations and exemptions from this useful rule, such as when a decision is made within a framework minicompetition or clarification process. So again, be sure of the facts before you cry foul.

Always seek additional feedback, not only to understand how you can improve next time, but also to show the buyer you are a professional organisation and to start the process of impressing them for the next procurement. SHOULD WE, OR SHOULDN’T WE? Entering any new market is a major undertaking. You need to do your research and be sure you have a winning proposition. You need to understand the way the new market operates and have a plan with realistic timeframes and resources to deliver a return on your investment. If you decide to go ahead, plan for success in a two-year timeframe (not overnight), and measure progress by a solid set of metrics. And remember, there is good support out there for you.

1 See: ukpublicspending.co.uk/breakdown 2 Public Sector Classification Guide. ONS. bit.ly/2MPU7DM 3 EU procurement thresholds. bit.ly/2pmF9gH 4 Tenders Electronic Daily. ted.europa.eu 5 Tracker. BiP Group. trackerintelligence.com (no endorsement implied) 6 Tenders Direct. tendersdirect.co.uk (no endorsement implied) 7 Sell2Wales. sell2wales.gov.wales 8 Public Contracts Scotland. publiccontractsscotland.gov.uk 9 eSourcing NI. bit.ly/33yF0Wo