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Why don't more construction SMEs tender for public sector contracts?

4 Jan 2019

The size and scale of the construction and infrastructure opportunity on the island of Ireland should encourage companies of all sizes, to actively consider the public sector construction market.

Public construction contracts can also be part of a strategy that provide a buffer against economic cycles. If the contract is delivered by the suppliers, there is low risk of non-payment.

What is putting people off?

SMEs often comment that they don’t know where to go to identify contract opportunities in the public sector or are cautious about tendering. SMEs should not let the tender process stop them from pursing a sector of the construction market in which substantial sums of money are allocated to major projects across the next decade.

Unfortunately, many good construction businesses do not compete for public contracts, or they compete halfheartedly, perhaps not ‘committing’ fully to the preparation of the best possible bid document, that sells the company’s capability fully.

Public buyers do want to work with SMEs. Owners of SMEs tend to be invested in securing a good outcome and they are often agile, innovative and very accessible.

In fact, the Office of Government Procurement has taken steps to improve SME access to public procurement. This includes breaking down tenders into lots; so that firms can compete for smaller work packages, or in specific geographical areas. OGP has also reduced turnover and insurance requirements to reflect the reduced scale of the contracted lots.

This enables more SMEs to compete. There is also an increased emphasis on encouraging businesses to form consortia, so that SMEs can join together and combine their strengths.

InterTradeIreland in conjunction with CIF and CITB in Northern Ireland, offer workshops across the island to de-mystify the tender process and help build the confidence of SMEs to take part in the tender process.

How do workshops help SMEs win contracts?

The evidence suggests that tender awards can often come down to small scoring differences. The InterTradeIreland Go-2-Tender workshops help SMEs to maximise their tendering capability. Broadly speaking the workshops assist SMEs to analyse the public sector construction market, enable them to consider strategically the most appropriate bids to peruse and crucially show SMEs how to develop stronger bid content to improve “win rate.”

We do this by supporting SMEs to:

  • Develop the right bid strategy- targeting the projects that offer the greatest prospect of success- in terms of sub-sector, size, geography, technical requirements etc. The workshops also help SMEs to determine when it is better not to pursue a bid; the bid/no bid decision making process.

  • Develop better awareness of the market and sources of pipeline intelligence. This enables firms to identify contract opportunities (and prepare for them) before they appear as live bids. This vastly improves tender submissions.

  • Develop a bid library and write in communicative and clear way. The workshops are complemented with mentoring support which includes for example, case studies, capability statements and method statements etc.

What companies can benefit?

InterTradeIreland runs different types of workshops, both for those that are new to the public sector construction market and those that are more experienced.

For those that are relatively new to public sector tendering, they can benefit from the one day Go-to-Tender workshops on the public sector construction market. These are run in conjunction with the Construction Industry Federation in Ireland and in Northern Ireland with the Construction Industry Training Board NI. These workshops are heavily subsidised and as a result the fee is very modest.

SMEs that already have some track record of bidding for (and winning) public contracts and perhaps want to target new sectors of construction or larger bids through consortium development can benefit from advanced workshops. These are being run with CITBNI in February and in May 2019, and are being planned with CIF Ireland at the moment.

For those that are keen to get involved in consortium development and collaborative bidding- a specialist workshop on Consortium development is scheduled for January 22nd 2019, in Dublin – and others will be scheduled for later in 2019.

Are there any requirements to access the workshops?

There are no significant requirements. The workshops are open to construction, construction services and building products businesses on the island of Ireland that are keen to target the public sector market.

Companies must however register and provide all the information required- as this is a heavily subsidised programme.

How have businesses benefited from these workshops?

Construction and Building Products SMEs have won major contracts in the construction, infrastructure and building sectors with the support of the Go-2-Tender Programme. Below are two examples.

  • An electrical contractor successfully secured a position on a framework for the provision of electrical contracting services in a major University. It was valued at £2m per lot over 3 years.
  • A £391k contract for traffic management systems as part of a major road infrastructure project.

Other successes have been in maintenance (public housing), minor works, facilitates management and maintenance of leisure centres – amongst others.

A further series of dates & workshops are being planned with the Construction Industry Federation (ROI) – for delivery in Dublin, Galway, Athlone, etc.

All of the workshops/seminars will be posted on the InterTradeIreland website. You can get further information, and register here.
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