Tenders for Private Sector Contracts

Challenges of tendering for private sector contracts

Although the general process of tendering in the private sector is like that in the public sector, i.e. has a specification, a response and an assessment, there are some key differences:

Once these differences are understood and considered when preparing a tender, winning a private sector contract can be very financially rewarding. Private sector contracts are just that, they are down to the buyer and supplier coming to a mutually beneficial arrangement. Unlike the public sector, long-term relationships can be formed, without the threat of having to re-issue, re-tender and re-win your contract regularly.

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Tender top tips

Top tips for winning private sector contracts

1. Ensure you obtain notification about available tenders

As there is no central noticeboard for the publishing of private sector tenders, the first challenge is to ensure you are aware of opportunities. You can do this in a number of ways, for example by building relationships with potential buyers, reviewing adverts in local and national newspapers or trade publications, and by networking with other business owners locally. Find out how your target market procures the services you provide – do they have a ‘Preferred Supplier List’ (PSL)? Check UK Contracts Finder for opportunities to subcontract to recent winners of government contracts. Depending on your business, it may be possible to find secondary opportunities if new building development takes place or a large company expands for example (such as cleaning services, equipment/office supplies, recruitment, electrics, grounds maintenance, facilities management).

2. Understand the process

Private sector tenders can be run differently than public sector tenders so make sure you fully understand the exact process being used and the corresponding timescales. How will you submit your bid? When is the deadline? Can you ask clarification questions? If so, how? Can you arrange a site visit? Is there a pre-tender meeting/presentation to attend? Will you need to present your bid in person? How will the bids be evaluated and scored? Will the buyer use a robust set of scoring criteria? Have they stated how they will ensure fairness and non-bias? Clarifying all this up front can ease the stress of tendering and ensures you can plan your time effectively. Be wary of any procurement exercise that does not confirm in advance how they will evaluate your tender.

3. Differentiate your business and your bid from your competitors

Submitting a unique offering that sets you apart from your competitors will make a big difference when tendering in the private sector. Always highlight the added-value products or services that are included in the price within your bid. Remember the format, structure and marking criteria won’t necessarily be as strict as in the public sector so really try to make your bid stand out. What do you offer that your competitors don’t? Do you have innovative ideas that can be implemented on this contract? Use proven experience and show how well you have achieved success for your other customers to convince they buyer you can achieve success for them too.

4. Research your buyer

Do as much research into the buyer as you can. Do they have a mission statement or company values? Can you demonstrate that your business and your offer is aligned with their values? Are they big on Corporate Social Responsibility or are they more focused on making clients happy? Try to get to the heart of their motivation, and specifically the motivations of the people evaluating your tender. Emphasise the benefits that a partnership with your company would bring to them. Ensure your bid shows that you have spent time and effort researching the buyer and understanding their business and their needs.

5. Check for any specific requirements

The requirements specification may be exacting but may also be either overly-complex or overly imprecise. Make sure you understand all the requirements and every question and ensure your response reflects your ability to meet (or exceed) them. Question any and all uncertainties and if you can meet or speak to the buyer prior to submitting your bid, do so; this shows proactiveness and can only increase your understanding of what they need.

6. Get your pricing right

The pricing of the tender will obviously have a lot of influence in how your bid is evaluated in the private sector. Get an understanding of your competitors’ pricing if you can; do your own benchmarking exercises. The buyer won’t necessarily go for the cheapest product/service, but if there are very similar bids in terms of the offering, price is likely to be key. You may want to offer discounts or innovative ideas for delivering long-term value that your competitors won’t have thought of.

7. People buy from people

Most private sector tenders will ask questions about the staff and resources you will use to deliver the contract. This is an excellent opportunity to show who you are and the proven experience of your key staff, including the rationale for why they are the ideal choice to service the buyer’s requirements. Make sure if there is a presentation, these staff attend and are involved in the demonstration of who you are and how capable your business is.