Government contracts are agreements between the public sector and private businesses to deliver goods, services or projects for the government.
In the UK, these contracts offer great opportunities for businesses of all sizes to work with the government on a wide range of projects, from infrastructure development to IT services and catering.
With billions spent each year procuring these services, businesses that understand how government contracts work and how to bid for them have the chance to secure very lucrative, steady revenue streams while contributing to public sector improvements.
Here’s everything you need to know about government contracts, how to find them, why you should bid for them and, most importantly, how you can win them.
What is a government contract?
Government contracts are legally binding agreements issued by public sector bodies to procure goods or services. They can range from small-scale, short-term contracts to large, multi-year agreements, covering a wide range of sectors including defence, technology, probation, rail and facilities management and more.
Unlike the private sector, where smaller businesses are often overlooked or even unable to put themselves forward, government contracts are made available to the entire market, meaning anyone can compete for work.
In fact, the government actively wants to work with SMEs – 26.5% of procurements in 2022 were awarded to smaller businesses, and there are initiatives in place to simplify the process and encourage local business and SME participation, including lowering thresholds or only allowing bids from businesses of a certain size or operating within a specific region.
By offering opportunities for innovation, collaboration and growth, government contracts can allow businesses to gain valuable experience, grow their reputation and establish steady revenue streams, providing an invaluable stepping stone to significant business development.
How to find government contracts in the UK
With such a vast number of opportunities published every week, less experienced businesses can find searching for government contracts overwhelming. With a strategic approach, however, the process can be made much simpler:
Refine your search criteria
Government tenders cover a broad range of industries, so refine your search using specific keywords, categories and location filters relevant to your business to narrow down your search results.
Check deadlines and descriptions carefully
Before committing to a bid, assess whether the contract aligns with your capabilities and resources, paying close attention to qualification criteria, contract length and budget to ensure you have the capacity to deliver and enough time to prepare a strong, competitive bid.
Consider tender alert software
Finding the right opportunities manually through online portals like Find a Tender and Contracts Finder can be a confusing, complicated and time-consuming task for even the most experienced businesses. Using specialist software like the Contracts Advance application simplifies this process, delivering all the day’s most relevant tenders to your inbox in a personalised daily email, as well as providing early visibility of upcoming re-tenders to ensure you never miss a potential contract. The software additionally offers insights into previously successful bids, so you can research companies previously awarded similar contracts to refine your approach and improve your chances of success.
Why compete for government contracts?
Competing for government contracts offers significant benefits, making it a worthwhile endeavour for your business:
Steady revenue streams
Government contracts offer predictable, long-term income with structured payment schedules, reducing cash flow uncertainties. For SMEs, this consistent revenue stream ensures financial stability and helps with resource planning.
Reputation building
Winning a government contract boosts your business’s credibility and signals that you’re capable of meeting high standards. This enhances your reputation not only within the public sector but also with private clients, increasing future business prospects.
Diverse opportunities
Government contracts span many sectors, providing opportunities for your business to diversify, explore new markets and showcase your ability to meet public sector needs.
Support for SMEs
The government supports SMEs through policies that simplify the procurement process and reduce barriers. This includes initiatives like breaking contracts into smaller lots, enforcing prompt payment targets and ensuring fair competition to make it easier for smaller businesses to compete.
How to win government contracts in the UK
Bidding for government contracts can seem daunting, but with the right approach, small businesses can secure valuable, long-term opportunities. Here’s how you can increase your chances of success:
Understand your market
Winning a government contract is all about proving you’re better for the job than every other bidder. With key information such as named contacts, previous suppliers, financial values, potential buyers, current contract holders and more, Contracts Advance gives you access to all the insight and analysis you need to get the inside track on your competitors, your buyers and the wider market and position yourself as the best person for the job.
Get ahead of your competition
As mentioned above, by alerting you to relevant opportunities and giving advance visibility of upcoming re-tenders as soon as they’re available, Contracts Advance saves you valuable searching time and puts you firmly at the front of the queue. This early visibility gives you the perfect chance to engage with procurement managers and build a positive relationship pre-bid, giving you a major advantage over rival bidders. Even if this particular bid proves unsuccessful, the relationship built with the buyer will prove invaluable for future contracts, giving you a better chance of building a strong, qualified business pipeline for future work.
Write a compelling bid
Your bid is your chance to demonstrate why your business is the best choice. Ensure you address every question, back up claims with solid evidence and stay clear and concise. Use straightforward language, avoid jargon and focus on delivering value for money, quality and social impact. Government tenders also value social value factors, such as how your business supports local communities or the environment, so be sure to highlight these where relevant.
Highlight your strengths with evidence
Strengthen your bid with supporting evidence such as past case studies, testimonials and detailed financial reports, providing examples of previous experience and demonstrating how your team’s expertise aligns with the contract’s requirements. The more evidence you can provide, the stronger your bid will be.
Ensure compliance and check your bid
Double-check your bid before submission to ensure all criteria are met. This includes confirming you’ve answered every question, met eligibility requirements and provided accurate, clear information. Pay attention to the details – grammatical errors and missing information can negatively affect your bid.
Understand the evaluation process
Government contracts are evaluated on several criteria, including financial stability, value for money and quality of the proposed service. If your bid isn’t successful, make sure to ask for feedback so you can learn and improve your chances in the future.
FAQs
What are the benefits of competitive tendering?
Competitive tendering ensures transparency and fairness in the procurement process, giving businesses the opportunity to demonstrate their value, win contracts and establish credibility in the market.
What is the easiest government contract to win?
Low-value contracts are often considered easier to win, especially for SMEs. These contracts typically have fewer bidders and less stringent requirements compared to high- value tenders.
What are the disadvantages of competitive tendering?
The process can be time-consuming and resource-intensive. Additionally, the competitive nature of tendering means that pricing pressures and tight deadlines can pose challenges for some businesses.
Why is competitive tendering very popular?
Competitive tendering promotes transparency and value for money, ensuring public funds are used efficiently, as well as providing a level playing field and access to opportunities for businesses.