What is public sector procurement?

Public sector procurement is where government bodies and public organisations purchase goods, works, or services from suppliers. The public sector landscape and sales process differs from private sector transactions due to regulations that ensure transparency and fairness, particularly for contracts above specific value thresholds.

When a public sector organisation needs to procure something, it publishes a contract notice, inviting suppliers to bid. In the UK, high-value contracts exceeding £139,688 must be posted on Find a Tender (FTS), the main portal for public procurement since Brexit. A range of regional and alternative platforms also exist, creating a siloed experience for suppliers.

Why sell to the public sector?

The UK public sector represents a significant business opportunity, with annual spending of approximately £407 billion. Selling to the public sector offers benefits such as:

1. Stability for suppliers, as public services are considered essential even in economic downturns.
2. Public contracts can also be larger than those typically available in the private sector, offering more growth potential for scaling suppliers.
3. Government agencies must pay invoices within 30 days, providing a reliable payment process.
4. The competitive nature of public procurement encourages innovation, as public sector buyers continuously seek the best value for taxpayer money.

Scaling in public sector procurement: What suppliers need to know

A public authority will identify something they need, sometimes 3-5 years ahead of announcing this need publicly, and rely on budget allocation and larger strategic directives for national public service organisations like the NHS. The government will then look for a supplier to fulfil that need. To do this, they publish a contract notice.

Officially this process begins with the government publishing a contract notice, which is essentially the public sector version of a wanted ad. However, experienced suppliers and companies accustomed to working with the public sector know that the process begins long before contracts open on government procurement portals.

The public sector's wide range of procurement needs offers significant opportunities for suppliers, including small and medium-sized businesses (SMEs). According to the Crown Commercial Service (CCS), £2.2 billion was spent directly with SMEs through CCS’s commercial agreements in 2021/22–an additional £687 million compared to 2020/21. Governments are encouraged to work with SMEs due to their ability to remain agile more so than larger organisations, their ability for localisation and to bring in local jobs.

Stotles’ team of experienced public sector procurement professionals have built a one-stop-shop for suppliers scaling their strategic operations for governments’ procurement needs. Sign up for a free account here.

Why pre-engagement is a key procurement strategy

While the previously mentioned government portals for announcing and listing procurement notices are publicly available, suppliers sourcing and organising tenders struggle to uncover and prioritise valuable opportunities on time.

Public sector sales should not be a reactive process for your sales team once an open tender is listed. Building relationships with active government buyers ahead of time shows initiative, and being equipped with the correct intelligence all in one place sets you up for success. This intelligence includes a centralised source of truth for government tenders including key stakeholders and contact details, dynamic information on relevant upcoming expiries tailored to the user’s target keywords and CPV codes, competitors they are tracking, and more. 

Below is a summary of the process for suppliers using the Stotles platform as a tool to improve their public sector procurement strategy. We will go into more detail in our next blog post: How to master pre-engagement with public sector buyers.

Find early buying signals

To increase the chance of success, suppliers should focus on early buying signals such as upcoming contract expirations. To do this, start by identifying contracts relevant to your services that are due to expire in 6 to 12 months. Engaging too close to the expiration date, such as one month before, might be too late as the re-procurement process could already be in motion. In addition to expirations, look for signals in government and public sector documents or long-term strategic plans where certain projects are mentioned. 

For example, in the NHS, a strategic narrative might outline goals over the next five years that can inform your early engagement efforts. Stotles recently launched a feature centralising all published public sector documents on-platform to easily search and retrieve key information to help with pre-engagement and qualification.

Qualifying buyers for pre-engagement

Not every expiring contract is worth pursuing. Suppliers can use available data to qualify which buyers are most likely to be a good fit. Efficient qualification includes reviewing the buyer's past spending, who the contract was awarded to, and whether the buyer tends to work with companies like yours. 

For instance, if a buyer regularly procures from large enterprises like Deloitte, you might decide not to engage. However, they could be more open to engaging with you if they have a history of working with SMEs. Expanding your qualification process by analysing buyer behaviour from past contracts will help focus efforts on opportunities where you have the best chance of success.

Gather context for relevant outreach

To stand out, make sure your outreach is specific and relevant. Gather as much context as you can from documents, budget allocations, and any available strategic plans. Understanding the buyer's past challenges or priorities allows you to tailor your outreach and demonstrate that you’ve done your homework. 

For example, if you notice that the buyer has allocated a budget for a new digital system. Here you can focus your outreach on how your solution can help them achieve their digital transformation goals. This is a better strategy than sending a generic email about your product.

Open conversations with buyers

Once the opportunity has been qualified and context has been gathered, start the conversation. The goal here is to understand whether the buyer is planning to go for re-procurement, what their needs are, and what issues they’re facing with their current solution. 

Buyers are allowed to engage in pre-market discussions with suppliers, and this is a great opportunity to build trust and become a valuable resource. Buyers often lack detailed knowledge of all the options, especially in complex sectors like IT or construction. This is your chance to demonstrate your expertise and help guide them towards the best approach.

Additionally, by asking the right questions—such as what they want to improve in the new contract or what their current frustrations are—you can begin positioning your solution as part of their procurement strategy.

Stay front of mind for tender opportunities

By engaging early and becoming a trusted resource, you ensure that your company is front of mind when the tender process officially begins. By the time the tender is open, buyers are often already familiar with the suppliers they’ve been in contact with, which puts them ahead of competitors who only reach out after the tender is public. Since you have built trust through relevant insights and guidance, the buyer is more likely to view your solution favourably when evaluating bids.

Next steps with Stotles

Test out the leading pipe generation platform for public sector procurement by signing up for a free account with Stotles. Click here to begin the sign-up process.

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