Selling to the Public Sector – An In-House Counsel's Survival Guide

With a total annual spend on external contracts of around £300 billion, the UK public sector represents a huge market opportunity for suppliers of all kinds of goods and services.

However, bidding for public contracts can be daunting.  Public procurement rules, which are intended to benefit suppliers by opening up public contracts to competition, can lead to heavily process-driven procurement procedures in which the back-and-forth negotiations common in customer relationships may be largely eliminated. And, whilst winning is great, loss of an important public contract can have a significant negative impact on a business. Suppliers have rights to challenge contract award decisions but exercising those rights in an effective and timely fashion is the key to a successful challenge.

To add to the complexity, long-standing public procurement rules based on EU directives have recently been replaced by a new UK-specific Procurement Act. Whilst the new Procurement Act 2023, will not radically change how public contracts are procured, it will introduce new challenges and opportunities that suppliers need to be aware of. 

This bitesize "survival guide" aims to help in-counsel quickly spot the risks and avoid the traps that bidders for public contracts sometimes fall into, with a view to securing the best chance of a successful outcome.

The checklist below sets out some of the key activities to undertake when bidding for public contracts:

1. Read the tender instructions and evaluation criteria carefully.
2. If bidding in a further competition under a framework, carefully review the  call-off contract terms and identify a strategy for legal risk mitigation.
3. Understand the scope for negotiation (if any) on the terms of the contract.
4. Comply with any word limits – and use the full word count!
5. Make sure every element of each question is fully covered and do not cross-refer unless specifically permitted to do so.
6. If anything is unclear or appears to be missing, ask a clarification question.
7. Beware the risk of supplier exclusion (which has been enhanced under the new Procurement Act 2023)
8. If you are bidding as the incumbent:
   1. Do not assume any prior knowledge of your business or performance of the existing contract on the part of evaluators (even if they have it, they can't use it). Evaluators can only score what is in your written submission.
   2. Cooperate with the contracting authority to provide information necessary for other bidders (e.g. TUPE information).  The rules have become tougher under the new Procurement Act.
   3. Be prepared to put in place separation protocols between operational and bid teams (but don't hesitate to negotiate requirements that appear unreasonable).

Procurement challenges

If your organisation loses out on a public contract and you believe the procurement rules were not complied with, you should consider a procurement challenge.

1. If the contract is particularly important to your business, consider getting specialist external legal support in place and briefed as early as possible during the tender process. 
2. Bringing a procurement challenge = litigation, in very short order.  There is no "internal appeal" process and writing letters to the public body is not enough.
3. The limitation period for a procurement challenge runs for 30-days from actual or deemed knowledge of the breach and can start to run, in the case for example of errors that are apparent on the face of the tender documents, before the award decision is made.
4. The previous 10-day standstill period has been reduced to  8-working days under the new Procurement Act.  This provides a short window in which a bidder may stop the public body entering into the contract post-award decision by way issuing a claim, which automatically suspends the contract award process.  But the suspension is often lifted by the Courts, leaving only a damages claim.  Careful (and urgent) consideration of the pros and cons of automatic suspension may be needed and any internal expectations of winning the contract/securing a re-tender managed appropriately.
5. Educate your bid teams not to sit on an award decision letter if they are unhappy with the decision and to seek legal advice as soon as received.  Given the short timeframes involved, if any action is taken it needs to be taken immediately.
6. Make sure all procurement documents (including clarification Q&As) are downloaded from any online portal being used by the public body.  They may prove extremely helpful in the event you make a procurement challenge.
7. Monitor notices on Find a Tender and Contracts Finder.  Not only is this important for spotting contract opportunities but it will become increasingly important for spotting opportunities to challenge direct awards to competitors or contract modifications/extensions made to public contracts that you have been monitoring (there are new notice requirements on public bodies under the new Procurement Act) which have the effect of avoiding further competition.

Leverage Fieldfisher's public procurement expertise to gain a competitive advantage

Whether you are a supplier entering the public sector for the first time, are looking to scale your public sector footprint or are frustrated by not achieving the foothold you expect, we have a number of solutions that can help overcome these challenges.

For the last 20 years, our commercial, technology and procurement specialists have been advising both the UK public sector and suppliers to UK public sector on government frameworks, procurements and contracts. This experience puts us in a unique position: we understand how the UK Public Sector operates, what the real risks are for suppliers and what works and what doesn't when doing business with UK government. These insights can help suppliers gain a competitive advantage and accelerate their public sector growth.

Contact us for more information on selling to the public sector

If this bitesize guide is useful and you would like to discuss any of the points in more detail with our experts, please do contact Paul Barton (paul.barton@fieldfisher.com) or James Buckingham (james.buckingham@fieldfisher.com) to arrange an introductory call.