John Doherty, managing director at UK public sector buying organisation ESPO, looks at how outdated perceptions of public sector supply work are changing.
When public sector tenders were mentioned in the past, eyelids became heavy. And that was for the company representatives still left in the room. For many firms, tendering for a council or NHS trust’s contract was simply too difficult and too time consuming.
But the work of specialist public buying organisations (PBOs) nationwide is changing outdated perceptions of tendering. And it is giving private companies a simpler route into attractive public sector supply work. PBOs work with local authorities and other public bodies to harness those organisations’ collective buying power and deliver quality products and services often at reduced cost.
PBOs owned by the public sector provide quality products or services at very competitive prices for buyers and regular revenues for suppliers: they return revenues to members via rebates or similar arrangements. What’s not generally realised is that PBOs provide a number of profitable routes to market for private firms – big and small – through their product catalogues and supply frameworks.
Buying consortia catalogues give buyers a ‘one-stop shop’ for anything from post-it notes to an academy’s laptops. These catalogues have literally thousands of products and PBOs are always on the look-out for new additions. Our own catalogue has over 27,000 product lines from more than 2,000 different suppliers, translating into tens of millions of pounds in orders every year.
For areas such as IT and telephony, where the contract spend is over a certain threshold, and specific EU competition regulations apply, PBOs develop frameworks that give buyers and suppliers assured product quality and regulatory compliance. These frameworks take the ‘legwork’ out of tender compliance for small and large firms that are accepted onto them. PBOs also support these suppliers with feedback on improvements for future tendering.
While the Government is pushing for 25 per cent of its contracts to be met by SMEs by 2015, one buying organisation has reported that 55 per cent of its frameworks are supplied by small firms.
Being accepted on a framework can open doors to new business, because the public body is assured that the supplier is meeting essential standards. Innovative firms can avoid the knockbacks of the past when they were not approved by ‘procurement’ while targeting the government sector.
The opportunities now being opened up by the UK’s private companies through PBOs are raising eyebrows... rather than closing eyelids.
John Doherty is managing director at UK not-for-profit public sector buying organisation ESPO.