The public-procurement sector across the island of Ireland is worth an estimated €12.2 billion and presents huge opportunities to small and medium enterprises (SMEs) on both sides of the Border.
However, according to InterTradeIreland's latest quarterly Business Monitor survey, which gathers business owners' views, in both Northern Ireland and the Republic, in interviews conducted with more than 750 SMEs, only 14 per cent of respondents stated that they had bid for any public tender in the previous year. Furthermore, less than a quarter of those had bid on a tender across the Border.
InterTradeIreland offers supports to help SMEs win a bigger share of this important market and cope with changes in the rules, especially in the Republic, as a result of the establishment of the Office of Government Procurement (OGP) and the introduction of new procurement practices.
"These new practices are a move to streamline the public sector tendering process and achieve greater value for money in the delivery of public services," says InterTradeIreland acting chief executive Margaret Hearty. "There will be new opportunities for SMEs with the realignment of public procurement guidelines. As a consequence of these changes, the number of individual tenders is expected to drop, while the value of tenders will almost certainly rise over time. We are urging SMEs to prepare for these changes and adapt their approach to public-sector tenders if they are not to lose out. SMEs should also prepare for changes to e-sourcing, which are happening north of the Border."
Another who is encouraging SMEs to take advantage of the opportunities in this area is the Minister of State with responsibility for public procurement Simon Harris. "The OGP has a clear remit, to save money for the taxpayer through centralising procurement across the public sector, and it also has a role to play in ensuring that the Irish business sector is supported to win business, both nationally and internationally," he says. "I certainly don't see these two goals as being mutually exclusive. If you have competent and professional procurement structures in place in the country, it needn't be an either/or."
Earlier this year the OGP published new public-procurement guidelines that make it easier for small businesses to bid for work across the entire public sector.
“The new guidelines make public procurement more accessible by SMEs”, says Harris. “They promote the setting of relevant and proportionate financial capacity, turnover and insurance levels for tendering firms and the subdividing of larger contracts into lots, where possible, to enable SMEs to bid for these opportunities. The guidelines also encourage SMEs to form consortiums where they are not of sufficient scale to tender in their own right, and to register on etenders.gov.ie to ensure maximum exposure to tendering opportunities.”
Tendering supports
The InterTradeIreland range of initiatives and supports is aimed at giving SMEs the skills to tender more successfully, whether for the first time or for more ambitious contracts. “The name of the game in the public tender market is that you must go in with the attitude that you can win the contract”, says Hearty. “A lot of companies have had a bad experience of the public procurement process and may be reluctant even to tender, or go on with a negative attitude. But if they prepare for it properly, they stand a good chance of success.”
Among the InterTradeIreland initiatives are meet-the-buyer events, held each year to highlight procurement opportunities for SMEs. These events give SMEs the chance to meet with key public-sector buyers from across the island. The next one will take place on November 12th in the Citywest Hotel, Dublin.
“These are very useful events,” Hearty says. “Companies can be very clever and get information and advice from buyers that they couldn’t get during a live tender process. Also, the buyers find them useful to find out what’s new and innovative out there in the market.”
The Go2Tender programme offers two-day workshops to give SMEs the confidence, knowledge and practical skills to tender successfully for public-sector contracts, particularly on a cross-Border basis. These workshops have been updated, based on new public-procurement practices North and South. Advanced Go2Tender workshops take the learning a step further, helping SMEs bid for more complex contracts.
One company that has benefited from the Go2Tender programme is the Co Cavan-based Gem Oils. "Our chairman sent me an email from InterTradeIreland regarding their Go2Tender advanced programme, and we discussed how it might be timely and appropriate for me to complete the course to enhance our internal tendering skills," says commercial manager Helen Milligan. "Things were changing in the public-procurement market, and they still are, with new processes and systems being put in place. We believed this was the ideal time to revise how we put together our submissions and tailor information to compete in this market."
The Go2Tender consultant assisted Milligan with a live tender. “When I compared the final tender, which we submitted after the Go2Tender mentoring, against other submissions, it was like comparing night and day,” she says. “The assistance and support that we received really helped Gem Oils over the line to win this contract. I would thoroughly recommend the Go2Tender workshops and mentoring to other SMEs across Ireland.”
App and voucher
The Tender Alert phone app provides SMEs with phone alerts when new public-sector opportunities are advised in Northern Ireland, the Republic or the EU, while the trade accelerator voucher offers SMEs up to €1,200 worth of tendering advice from expert providers.
New this year is InterTradeIreland's consortia advisory service, which helps companies bid together for contracts. "Collaborative bidding opens new and larger opportunities to SMEs in the Irish and Northern Irish markets," says InterTradeIreland facilitator Joanne Gillen. "With increased aggregation of demand in public procurement, some contracts are now tendered as national frameworks. These new, bigger contracts have greater turnover, insurance, systems and experience requirements than ever before, and smaller companies are being encouraged by public buyers to join forces in order to compete."
Gillen points out that changes to procurement practices are making it more difficult for some SMEs to bid for contracts.
“The contracts have become larger, and this can make it more difficult for small firms to participate,” she says. “The minimum turnover required of a firm to participate is usually set at around twice the contract value. By collaborating, companies can meet this threshold. Also, you might get a situation where one company can do 80 per cent of the contract by itself but may not have the capacity to do a small part of it. For example, one company might be able to manufacture and supply the goods, and they might need a partner to distribute them. Together they could win the contract, but separately they might not even be able to bid for it.”
There is more good news from Simon Harris. “One of my priorities is to put in place a single point of contact for companies with queries in relation to public tenders,” he says. “This will make it easier for SMEs to succeed when it comes to tendering, whilst still achieving the objective of realising better value for money for the taxpayer.”
For further details of InterTradeIreland’s supports for SMEs wishing to compete for public procurement contracts, see interTradeIreland.com/public-procurement
