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How Public Sector Procurement Works

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As of January 2010, the UK Government’s annual procurement spend is £220billion.  Because this money comes mainly from the taxpayers, the purchasing has to be carried out in a way that is

 

transparent

accountable

justifiable

 

which is why the process is so time-consuming.  Every time a contract is awarded, the public sector body concerned has to be able to explain, if challenged, on what basis they selected the winning company.

 

(In fact, there is a standstill period after a contract has been awarded during which time the unsuccessful tenderers can decide whether a review should be initiated because they suspect there is something wrong with the award.)

 

There are advantages and disadvantages for small organisations that are involved in public sector contracting and a good way of demonstrating this is by conducting a SWOT analysis:

 

Strengths

  • Regular payments
  • Recession-proof
  • Wide range of procurement needs
  • Transparent and accountable process
  • Complaints process
  • Good for repeat business
  • Good for references for securing business with other public sector bodies
  • Increases capacity of organisation
  • Imposes structure on organisation

Weaknesses

  • Bureaucratic
  • Time-consuming
  • Need for written policies
  • 3 years’ accounts history
  • Lack of understanding of small organisations by some Procurement Officers

Opportunities

  • Huge business potential
  • Innovation and creativity welcomed
  • Highly specialized contracts available
  • Can start from small contracts
  • Open to approach from Third Sector organisations
  • Encouraging climate
  • Enables long term planning
  • Builds experience

Threats

  • If you can’t deliver – don’t apply
  • Can over-extend your business
  • If you fail to deliver you won’t be asked again
  • Can you afford to spend the time and not get the contract?