Private companies can gain access to public sector markets

“2005 is the year when e-Government theory is anticipated to become e-Government reality”, says John Bancroft, Chair of the Intellect Marketing Group and Managing Director of Incognate. He adds, “Citizens will be able to access a variety of public services electronically from fully integrated government departments, agencies and bodies. ‘Choice’, ‘flexibility’ and ‘joined-upness’ will be the vanguard of the citizen-centric modernising government revolution.”

However, the government has realised that so far there has been not nearly enough focus on small and medium-sized enterprises (SMEs) and, with this in mind, has devised plenty of opportunities to overlook this issue. Earlier this year, the Office of Government Commerce (OGC) and the Small Business Service (SBS) announced details of a new national web portal. To be launched in the summer of 2005, this will provide millions of businesses with direct access to central and local government opportunities under £100,000 in value. Ironically, the invitation for tenders was published in the Official Journal of the European Union (OJEU) to which 160 organisations responded and ten were invited to tender.

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For many companies, selling to government has previously been seen as a difficult affair of following and a case of filling in the paper chain, only to lose out in the end to incumbent, well-established, government suppliers, but this could all be about to change.

What’s more, public sector spending accounts for around 40% of the UK’s gross domestic product (GDP). Central civil government alone are spending £13 billion per year on goods and services, and so there is plenty of business to be had and 13 billion reasons to go for it.

It is anticipated that the portal, when it is built, will be particularly popular with many of the 3.5 million small and medium-sized businesses (SMEs) that often find it difficult to sell to government.

The government appears to be going out of its way to encourage small businesses to market to them as they provided free training workshops for over 300 SME’s involved in the pilots, as well as internal training programmes for government buyers on the benefits of using smaller businesses. Also encouraging is, that a more simplified tender document has also been tested and introduced.

The government set up a trial in the West Midlands Region and the London Borough of Haringey with a basic web portal. This turned out to be a success and allowed government buyers to advertise lower-value contracts, which made opportunities more accessible to smaller businesses.

Paul Boaten, Chief Secretary to the Treasury, said the potential advantages identified by the West Midlands and Haringey pilots have contributed to the process of breaking down the barriers facing SMEs when trying to do business with government.

Boaten believes that the practical help and advice that the pilots developed can now be rolled out nationally, proving that the pilots were not just a one-off project, but part of government’s continued commitment to helping SMEs to access the public sector marketplace.

Traditionally, the government market has attracted larger companies who have had the skills, resources, and financial credibility, added to the ability and desire to market their wares to the government. On the other hand, smaller companies have almost felt intimidated by the many hoops that they have had to jump through in order to pick up some of the smallest crumbs from the government’s table.

I believe that the gulf between selling to the government and selling to any privately run organisation is rapidly closing, and the five key points below demonstrate this:

Step 1 – Defining the need

All public sector organisations are required to define their objectives, agree what is needed, develop a business case and decide how to carry out the procurement process. They will also look at legislation, market conditions and public sector policy.

Step 2 – Inviting proposals

Companies are invited to put in a tender document or proposal, which has been traditionally done through trade journals or the OJEU. In some cases suppliers have to pre-qualify by completing a questionnaire that gives details of previous experience, references, and information on the financial status of the company.

Step 3 – Evaluating all the options

A public sector organisation would then review and evaluate all responses against a set of standards relating to value for money.

Step 4 – Contract is awarded

Following the evaluation, the contract will be awarded to the provider with the best solution and who is also offering the best value for money

Step 5 – Project launched

Both organisations work together to ensure that everything is in place to support the delivery of the project

You may conclude, as I have, that there is not a lot of difference between marketing your wares to the government and marketing to any other private sector company.

In my experience, as well as that of other independent consultants, working with local authorities has not been as straightforward as it seems. One of the biggest issues we have come across is that the smaller local companies often haven’t even got email, and are consequently unable to take advantage of the opportunities.

Government and local government markets have clearly outlined their procurement process, almost guaranteed payment, and no hidden agendas. With this in mind, doing business with the government should be both straightforward and appealing to most businesses.

The government is making great strides to accommodate around 3.75 million small to medium sized businesses in the UK, in an attempt to encourage them to do business. This new move could mean that marketing and selling to the government becomes first choice for many.

For more information, please contact Noreen Shah: noreen.shah@intellectuk.org.

About the Author

John Bancroft is Chair of Intellect Marketing Group and the Managing Director of Incognate. The marketing group is involved in developing best marketing practices throughout the IT industry . John has over 15 years’ experience of building new business infrastructures and effective sales and marketing teams.

Written by John Bancroft.

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