Competing and Winning in the Public Sector – A Dark Art?
Published on February 6, 2020
Competing and Winning in the Public Sector – A Dark Art?
The start of a new decade and we have a new Government with some serious change ahead driven primarily on two fronts – Brexit and the need to revisit and re-invest in our much discarded public services after years of austerity, with Health, Justice, Immigration and Defence leading, whilst one should never discount the importance and contribution of all the other departments across Whitehall and of course local government.
While the fog of change slowly lifts, one thing that is clear is that our new Government, which I personally believe is now in situ for the next 10 years, cannot deliver its promised vision without help. That help comes from the myriad of suppliers, small, medium and large, that exist in the various supply chains of the private sector. Exciting? Absolutely! As a Champion of SME’s, who contribute 80% of the British GDP and fuel our economy, the question however is “how do I access that opportunity?”
Navigating Public Sector procurements in such a way that you are successful can seem to be a ‘dark art’ whose secrets are known only by a few. However, the reality is that really isn’t the case but you do need to know the rules of the game (both written and unwritten) and how the game is played. Ultimately Suppliers are businesses and need to be profitable to grow, and that means you need to win; but like any game you are going to have to accept that losing is part of it.
This blog aims to provide some insight, based upon my own experience, into this so-called dark art and hopefully encourage the myriad of great British SME’s to become involved. But be warned; working in the Public Sector is a series of paradoxes simultaneously being the most rewarding and frustrating experience one can imagine.
Rules of the Game
Let’s start with the basics. Public Sector procurement is based upon the concept and the surrounding rules of open and fair competition. This means that Procurement and tendering should be conducted in a fair, open and transparent manner. The most important and broadly accepted principle underlying a modern procurement system is open competition – unrestricted, universal access to the market. Translated it means that there is a level playing field for all and anyone can play.
The other key watch word here is ‘transparency’. In a public procurement this means that information on the public procurement process must be available to everyone: contractors, suppliers, service providers and the public at large, unless there are valid and legal reasons to keep certain information confidential.
Behind these concepts is an entire system of procedures and protocols enshrined in European Law (hopefully in time we will dump some of this unnecessary bureaucracy), that Public Sector Procurement Officers, known as ‘The Authority’ (the “Buyer”) will follow. Unfortunately, at times, they also hide behind them.
Public Sector procurement can be viewed as anything but ‘open and fair’ but you cannot beat the system. What you do need to understand is how to roll with it. This also involves knowing when not to play.
So how do you play the game?
The ‘leg work’ needs to be done BEFORE any procurement ever arrives. Believe it or not the Public Sector isn’t going to come running to you, you need to go to it. You need to get known and you need to build relationships that allow you to influence and shape people’s thinking. Here’s my checklist…
1. Be Match Fit –– Is your company ‘match fit’ to play the game in the first place. What do I mean by this? Is all the company paperwork all up-to-date and filed with Companies House? Insurance all in place? Are you all up-to-date with HMRC? Do all employees and contractors have contracts? Will the company stand-up to basic financial scrutiny? If not, you will fall during basic due diligence
2. Understand the Industry (Macro View) – A lot of this can be achieved by just surfing the internet and the industries the Organisation touches. It’s important to know Central or Local Government policy, the Public Sector is the execution vehicle for policy. Educate yourself so when you do meet the department you can have a relevant intelligent conversation. A classic example of this is HM Government’s policy that £1 in every £3 should go to SME’s. Know this and use it to your advantage – nothing like reminding Procurement Officers of government policy
3. Understand the Organisation’s Challenges (Micro View) – Understand the organisation you are selling to in terms of what they actually do? Find out what is important to them and learn how to sell to them. In Central Government every department is different, and no one size fits all, this is due to ‘departmental sovereignty’ where every department effectively has autonomy over its own business operations
4. Understand the Players and Find your Champions – Meet the players and understand which roles they play – are they an influencer, the end user, the decision maker, the referee (Procurement Officer), the negotiator? It is vitally important you gain insight and understanding as to who’s who in a department and build support from within. You need to get to the ‘C’ suite, create advocates and find champions. You can’t do this during a live procurement, but you can do it before hand
5. Understand the Politics – This is the Public Sector there is always politics; if what you are proposing is in the wrong direction of travel you are not going to be successful. Getting access to people is never easy but it is possible. You have to build relationships inside the organisation to understand the political agenda. Remember Public Sector, especially Central Government is a very fast paced moving environment, so you need to stay on top of the political map
6. Build and Maintain Relationships – Building and maintaining relationships is hard work, and it is also a two-way street. However, working the Public Sector is always about playing the long game. People do appreciate you being around and offering opinion and advice, especially when there is no commercial contract in the immediate offering, but later, one day down the line there will be. Remember People buy from people
7. Procurement Channels – Understanding the procurement channel and the type of procurement that will be used to buy is absolutely critical. Get familiar with the different procurement frameworks and avenues. You have to get on the frameworks, which is time consuming and costly. But this is the investment you have to make in the sector. One piece of advice – if you see a procurement titled “OJEU Competitive Dialogue” – stay well clear; this is where the Authority will undertake market testing, make you jump through a number of hoops and have you run around all for no contract to be awarded. These types of procurements are only for those with very deep pockets and they carry the highest risk profile
8. Supply Chain Channels – Public Sector is an ecosystem of Suppliers of all shapes and sizes. Certain engagements are too big for an SME, and Public Sector buyers always look to larger suppliers not only for their skills and capabilities but also to take on the commercial risk. Such engagements quite often require such Suppliers to use their SME’s in their supply chain. This is looked upon favourably as they are seen as brining the very best the market can offer to the table, and also solves the headache of HM Government having to run multiple complex procurements. So, get into the larger Suppliers supply chain. Fully accept this is not easy or straight forward, but HM Government usually lends a hand by introducing SME’s to the larger Suppliers as part of the procurement cycle
9. Educate the Buyer – Influence the Procurement – Every contract that is issued is going to go through a procurement cycle, therefore the trick is to shape the procurement in advance of it formally commencing. This is achieved by investing your time in educating the buyer in your services and how you can solve their pain points before the procurement commences. Responding to an RFP or an ITT that is ‘cold’ reduces the chances of success; the reason being that someone else has already shaped the conversation
10. Read the Procurement– When the Procurement is issued make sure you READ IT CAREFULLY and respond exactly how you are being asked to. Failure to do so makes you non-compliant, and you strike out immediately!
11. Know Your Competition – The competition are important pieces on the chess board. Who is the incumbent supplier? how much does the department spend and with who? (this information is in the public domain) Who are you competing against? Why would you win over them?
12. Procurement Scoring and Gamification Theory – Find out who your competitors are and gamify the various scenarios and outcomes. From this intelligence you can position yourself accordingly. It is an important exercise to undertake and remember to do it as early as possible as this helps you qualify the opportunity
13. Understand the Risks Involved and Negotiate – Dealing with the Public Sector is not without risk, and every contract regardless of size, you will find the Authority offsetting their interpretation of the risk onto the Supplier. This can come in many forms, some of them appear utterly ridiculous from an SME perspective, but understand what you are signing. It’s not in the interests of the Public Sector to bankrupt you, but equally in signing a contract you are taking on the responsibility of delivery. There is always a negotiation to be had
14. Get Known, in-fact Get Famous! – You need ‘profile’. You need to get known (for the right reasons!). Remember, regardless of how long you have played the game, Public Sector officials “churn” in their roles as much as the Private Sector, so you constantly have to reintroduce yourself and also remember you are only as good as your last project!
Knowing when not to play – Qualify Hard!
Now this is going to be controversial as no one will acknowledge this happens. However, the reality is it does happen, and you are going to come across the following scenarios when you have played the game long enough.
From the start of any formal procurement cycle you have to work out quickly as possible if the Authority has already made its decision and is looking for formal legal endorsement through the procurement. If they are you don’t want to play, as all you are doing is making up the numbers and enforcing that the procurement was legitimate as you competed but lost. As soon as the procurement is issued the game begins as you have to flush out what is really happening.
You do this by qualifying hard through intelligence gathering from any source available. A word of advice always triangulate intelligence from three sources, so you know on what basis you are making your decision to participate or not.
Participating and competing is expensive, especially if you are an SME, so you have to know (1) that the playing field is truly level (2) if the procurement has been significantly shaped by someone already and who that someone is (3) do you still have an advantage over the competition that makes your proposition compelling that will get you the chequered flag.
Signs to look out for include, but not limited to:
To a degree this is where experience and gut feel come into play. The old saying “If it looks like a duck, swims like a duck, and quacks like a duck, then it probably is a duck” meaning if you feel for whatever reason the procurement doesn’t ‘look’ right, then gracefully qualify out explaining your reasons for doing so politely.
Dealing with Losing, Feedback & Challenge
Try not to get upset. As someone once said “it’s just business”. Personally, I do get upset especially when the outcome is non-comprehendible and seems to defy logic. We only ever get upset over things we care about, and no-one plays to lose, so if you don’t get upset your probably in the wrong game, but learn to let it go. What is important is to understand why you have lost and have the ability to look at how you approached every aspect of the procurement.
Public Sector is about transparency so you should always seek feedback on procurements you lose and also why you have won. However, a constant source of frustration, which I personally frown upon, is when no feedback is ever forthcoming. Public Sector officials don’t like criticism or challenge however it is very poor form when a Supplier has made significant investment in a procurement not to be given the courtesy of any feedback. If you do see poor procurement practice then do challenge it, but always do this constructively and if necessary, bring it to the attention of the Crown Commercial Service. It’s the only way the whole system ever gets better.
Dark Art demystified
There really is no magic formula, and sometimes it does feel like a complete lottery. However, you can increase the odds of winning and just like ‘Blackjack’ you only need a small percentage to be in your favour for the house not to win. You get nothing for coming second, so in summary…
1. Try and meet the Authority before any procurement begins, introduce yourselves to them and get them to remember you, and if possible, shape their thinking in advance – no one ever got shot for being the solution to someone’s problem
2. When the procurement arrives qualify the opportunity hard!
3. Remember, most procurement competitions have been influenced before they are released as they have been shaped by someone. If that someone isn’t you, then you are on the outside
4. Do your homework – Policy, department, stakeholders, politics, pain points, killer proposition, competition
5. You can’t control the competition or what others will do, but you can control yourself – so if you do decide to play focus on you and play your game not someone else’s
6. If you lose, understand why you have lost. Ask the question – Should you have played in the first place?
7. Finally always trust your gut! and apply the “Duck Test”
I hope this blog helps demystify the misnomer that Public Sector procurement is a dark art. SME’s have a fantastic amount to offer the Public Sector, but you still have to win contracts through formal procurements. Hopefully this blog will make you a better player, wishing everyone every success in their endeavours. Look forward to the comments as always…
Disclaimer: This is a personal blog. The opinions and views expressed here represent my own and not those of my employer. In addition, my thoughts and opinions change from time to time and I consider this a necessary consequence of having an open mind. This blog is intended to provide a semi-permanent point in time and as such any thoughts or opinions expressed within out of date posts may not be the same or similar to those that I hold today.