Guidance

How to bid for government contracts as an SME effectively

Steps SMEs can take when bidding for government contracts so they can compete with larger companies.

• From: Cabinet Office and Department for Education
• Published: 8 September 2020
• Last updated: 23 March 2023 — See all updates

Where to find tender opportunities

A tender is in an invitation for suppliers to bid to supply a product or service.

Contracts Finder lets you search for information about contracts worth over £12,000 (including VAT) with the government and its agencies.

You can use Contracts Finder to:

• search for contract opportunities in different sectors
• find out what’s coming up in the future
• look up details of previous tenders and contracts
• you can create an account to get email updates and save your searches. You can still search and apply for contracts without an account

You can also find contracts by browsing:

• the Department for Education Portal
• UK e-tendering service, Find a Tender Service (FTS) is the online service where all UK public and utilities sector contracts over £118,000 are listed
• public sector websites
• newspapers and industry publications
• business intermediaries, for example, chambers of commerce and trade associations
• supply chain opportunities with other contractors
• Twitter and other social networks

What to plan before you bid

Assigning roles

Bidding successfully requires clear roles and responsibilities to ensure complete and timely submission. Some roles to consider might be who:

• makes the bid, or the decision not to bid
• is the project manager
• designs or approves the solution
• signs off the final bid

Writing your bid

There are many different types of proposal evidence. We have explained each type in this section with an example followed by the advantages and disadvantages.

Statistics

For example, actual performance against target for a similar contract.

The advantage is that they are short, sharp, specific and objective.

The disadvantage is that the range of available data can often be limited.

Testimonial

For example, a positive quotation attributed to a similar customer.

The advantages is that they build trust, confidence and endorsement.

The disadvantage is that they can be potentially lengthy and unspecific.

Case study

For example, a synopsis of how you supported a specific service user.

The advantage is that they bring an element of storytelling.

The disadvantages are that they:

• only evidence a single specific instance
• can be lengthy, using up character limits

List

For example, a list of prior similar clients or contracts held.

The advantage is that they can show a breadth of experience.

The disadvantage is that they are harder to show underlying detail and relevance.

CV

For example, details of proposed skills and expertise of proposed team.

The advantage is that they show clear staff competency.

The disadvantage is that they can be lengthy, and skim over greater detail.

Guide your evaluator

Your role is to direct evaluators to content within your response to make it easy for them to score, to do this you can:

• keep sentences and paragraphs short
• ensure a logical flow and transition from one sentence to the next, and include a narrative (tell a story)
• don’t assume prior knowledge. Ensure that key concepts are explained
• use sentences to grab the reader’s attention, and ‘clinchers’ which conclude the point and leave the reader satisified
• use spacing, headings, and bullets to guide evaluators while not exceeding the character restrictions
• minimise jargon and acronyms

How to structure your answer

• if the question includes bullet points, adopt these as subheadings. With equal space allocated to each
• if there are no bullets, break down the different elements of the question to determine the best answer structure
• address each point in the same order as they appear within the question
• avoid extra subheadings which distract from the core wording of the question

Breaking the question down

An example question: “Please provide your strategy for sourcing and recruiting subcontractors and for ensuring that you can effectively monitor, measure and exercise executive control”

You should respond by providing your strategy for:

• sourcing subcontractors
• recruiting subcontractors
• ensuring effective monitoring
• ensuring effective measuring
• exercising executive control

Constructing your answer

Combine different types of sentence to construct an effective answer.

Feature sentence

Sets out a specific element or activity within the solution.

Method sentence

Describes the process through which you will deliver this activity or element.

Value sentence

How this activity offers efficiency, effectiveness or value against the specification.

Evidence sentence

Provides evidence of established competency relevant to the proposed activity.

Advantage sentence

Explains how this competency better qualifies the bidder to deliver the service.

Sentences example: insulation

Feature sentence: we will install 300mm of loose-fill cellulose thermal insulation in all new build walls.

Method sentence: insulation will be delivered on site and sprayed using blowers into wall cavities by our NVQ diploma qualified insulation engineers.

Value sentence: our solution exceeds minimum required Building Regulations and, by using cellulose insulation, ensures the most eco-friendly form of insulation.

Evidence sentence: last year our team insulated over 50 different properties using these techniques, with a 98% completion rate on time and budget.

Advantage sentence: our experience ensures a high-quality standard, with professional installation achieved within challenging turnaround times.

How to write for your evaluator

Ensure answers leave cover all objections about your suitability, an example of this is:

Our market tested service solution works, and will deliver a step change in performance. 15 other local authorities already buy this service from us. Last year, we performed at 10% above national average benchmarks.

You should:

• be definitive, and write with conviction
• be positive, focus on benefits and advantages
• be substantive, giving evidence of success
• build trust, showing evidence of confidence from other customers

Use firm, positive language that clearly shows your commitment to your proposition. For example, use:

• ‘we will’ instead of ‘we could’
• ‘we know’ instead of ‘we believe’
• ‘we have’ or ‘we know’ instead of ‘we aspire to’
• ‘we will meet’ instead of ‘we aim to’

Simplify your language. For example, use:

• ‘enough’ instead of ‘a sufficient amount of’
• ‘like’ instead of ‘along the lines of’
• ‘as is true’ instead of ‘as is the case’
• ‘when’ instead of ‘at such time as’
• ‘now’ instead of ‘at the present time’
• ‘is’ instead of ‘has been proved to be’
• ‘if’ instead of ‘in the event that’

When using jargon or technical language, evaluators need context to understand why a feature may be beneficial.

Don’t write:

‘Our hand-held petrol chainsaw has a 50cc engine, operating at 9000 RPMs, with an 18 inch bar, and a power output of 3.4kw.’

Write:

‘Our chainsaw is easy to start, has great safety features, an easy to replace chain, and is ideal for cutting large trees with a diameter of 10 to 20 inches.’

Address all aspects of the specification, and convert areas of weaknesses into areas of strength.

For example, use ‘We will deliver to the standard’s criteria and achieve accreditation within 6 months’ instead of ‘we don’t currently hold the standard’, or, ‘We will secure temporary local premises, and second current staff to the area on an interim basis’ instead of ‘We don’t have a current presence in the locality.’

Remember that:

• a tender is a sales document
• do not waste words on goods and services not specified in the requirement
• its goal and purpose is to convince a decision maker that they should buy your solution
• the aim is to sell, rather than report

Cross referral and duplication

Remember that:

• the same evaluators may not score every question, so some repetition of core content may be required
• each question is unique, so don’t copy, paste and repeat the same answer

Social value and equality

We will take account of social value benefits when we award contracts.

For relevant contracts we will, as part of our evaluation, consider how suppliers will promote, for example:

• use of apprentices
• use care leavers
• other social issues

Checking your bid

Tenders often do not win due to:

• failing to answer the specific questions
• failing to address the full specification
• an insufficient level of detail
• inability to evidence the required competencies
• poor planning
• the right people are not involved
• unattractive pricing
• non-compliance with eligibility criteria

Proof reading is more than spotting grammatical and spelling mistakes, bids are rarely lost for this reason. Look for whether you:

• you have answered all parts of the question
• you have explained the proposition clearly so it is easy to understand
• you have fully addressed the specification and evaluation criteria
• your response is logically structured and easy to follow
• you have addressed the ‘how’ as well as the ‘what’
• you have provided relevant evidence to demonstrate your competency
• you have been consistent across every question response
• you have used the word count effectively (content above the word count limit will be disregarded)

How the tender process works

There are 3 common contracting procedures which are explained in this section.

Open procedure

This procedure means that:

• anyone can submit a tender
• you are not permitted to negotiate with bidders

There are no restrictions on when this procedure can be used, but there is a requirement to evaluate all tenders received. It is often used for straightforward procurements.

Restricted procedure

This procedure means that:

• interested parties can submit an expression of interest.
• a minimum of five suppliers must be invited to tender (unless fewer suitable candidates have applied) and these are sufficient to ensure genuine competition
• no negotiation with bidders is permitted, just clarification of bids and finalisation of terms

There are no restrictions on when this procedure can be used. This procedure is often more suited to less stable markets with lots of competition.

Competitive dialogue

This procedure means that:

• a selection is made of those who respond to the advertisement and only they are invited to submit an initial tender for the contract
• the relevant department may then open negotiations with the tenderers to seek improved offers

This procedure may be used to procure contracts for works, supplies or services where one of the following may apply:

• the needs of the relevant department can not be met without adaptation of readily available solutions. This means that we have to use a ready-made product, or an adaption of one
• they include design or innovative solutions
• the contract can not be awarded without negotiations because of specific circumstances related to the nature, complexity, legal and financial makeup or the risks attached to them
• the technical specifications can not be established with sufficient precision, with reference to a standard, common technical specification, or where in response to an open or restricted procedure only irregular or unacceptable tenders were submitted

Payment model type

Fixed Price

The contract is based on a fixed value for completion of all outputs, usually paid on contract completion.

Service fee

The contract involves regular installment payments over a period of time, not normally linked to outputs.

Staged payments

Payment is linked to completing specific milestones, often by a specified date. This can involve penalties.

Payment by results (PBR)

Part of the contract value is linked to outcomes (tangible or social), typically with a payment per outcome.

Licence (sometimes known as concession agreement)

The contract allows the contractor to collect fees or payments directly from service users.

Key invitation to tender (ITT) documents:

Instructions to bidders

A document which explains the competition. For example, timescales and submission requirements.

The specification or service requirement

This provides a breakdown of what it is that the purchaser wants to buy.

The tender response document (technical response)

Questions to be answered which determine your bid score.

The pricing response document

Typically a spreadsheet breaking down your costs and proposed payment profile.

The standard contract

The standard agreement the purchaser will require you to sign if you are the winning bidder.

These documents will be provided to you as proceed through the tender process.

After you bid

How the bid is evaluated: evaluation gates

Gate 1: administrative compliance

• does the bidder meet eligibility criteria to bid?
• is response completed in full?
• does bidder satisfy any grounds for exclusion?
• are required declarations signed?

Gate 2: economic and financial standing

Does the supplier have sufficient financial capacity, for example cash flow and working capital, in relation to the contract value and payment mode?

Gate 3: technical and price evaluation

How has the supplier’s response scored, both in terms of quality score and pricing score?

Clarification questions

It is not uncommon for there to be a need to clarify aspects of the invitation to tender.

Double check that the information is not already detailed in the invitation to tender. The ‘Instructions to bidders’ document will ordinarily tell you how to do this, or there may be a portal message facility.

Your question and answer will typically be published by the purchaser, so accessible to all other bidders. The exception would be anything that is commercially sensitive.

Further information

Read guidance for SMEs on doing business with government and about our prompt pay policy.

Find out if you qualify as an SME by reading the definition on the European Commission website.

Read about the Small Business Crown Representative, Martin Traynor.

Published 8 September 2020
Last updated 23 March 2023 + show all updates

1. 23 March 2023

   The contract value you can search for on Contracts Finder has changed to over £12,000 (including VAT).

2. 2 November 2021

   Removed SME mailbox address because the mailbox is no longer in use.

3. 22 June 2021

   Updated links in 'Where to find tender opportunities' section to reflect latest changes.

4. 8 September 2020

   First published.