Public procurement is open to all businesses. As long as your business can offer value for money, you stand a chance of making a successful bid. But for businesses new to the world of procurement, the language of the field can be off-putting.
To be truly fair, public procurement needs to be accessible to businesses at all levels. Whether or not they have made successful bids to provide public sector services in the past shouldn’t matter. When all businesses can compete for public sector contracts, regardless of their experience or size, the public stands a better chance of achieving real value for money.
That’s why it’s so important to simplify public procurement. Read on, and we’ll tell you more about why and how the public sector should make the process more accessible.
What Is Public Procurement?
Public procurement is the purchase of goods or services by the public sector. It’s a way of outsourcing the production of items, or the provision of certain services so that public sector departments or agencies can focus on doing what they do best.
Procurement is common all over the world. Member nations of the OECD (Organisation for Economic Co-operation and Development) spend roughly 12% of their GDP on procurement.
Procurement uses public money, so governments have to manage it transparently. Taxpayers must know where their money is going, and they usually expect governments to obtain good value for money when spending their taxes. The UK is no exception, and the government makes all information about the public sector bidding process available online.
Is Public Procurement Too Complicated?
Because public procurement runs according to highly involved processes, it has developed a lot of jargon over the years. This is because jargon exists to simplify the discussion of a topic within a group. It’s shorthand, and all kinds of institutions use their own jargon as an easy way to talk about ideas that can be complex.
In procurement, though, jargon presents more of a problem. The whole point of public procurement is that any business can try to get involved. Jargon risks excluding people who don’t already know how the process works, leaving them alienated and put off from getting involved.
This risks undermining the whole process because procurement is expected to deliver value for money to the public. If businesses that might make competitive bids feel unable to get involved, due to jargon in the field, then the process is already failing. How can governments be sure of getting the best deals, when businesses are self-selecting out of the procurement process?
That’s why it’s important to simplify public procurement. It isn’t just about levelling the playing field! It’s also about making sure the public gets the most out of their contribution.
Explaining Jargon in Public Procurement
If you’re not sure about delving into the world of public procurement, you’re not alone. We’ve put together a guide to some common terms used in procurement, so you can feel a little more at home with the process.
Tender
A tender is a formal response to an invitation to bid on an advertised contract. The process of submitting information in response to a contract advertisement is known as tendering.
A tender will usually contain a quote for the cost of fulfilling the contract. Once submitted, tenders are evaluated against the criteria of the contract by a panel. The panel will ultimately make recommendations for which business should receive the contract.
OJEU
This is an acronym for the Official Journal of the European Union, the gazette of record for the EU. It contains a public procurement supplement, which publishes all public sector tenders valued above a certain financial threshold.
Before Brexit, the OJEU was a more significant part of the UK’s procurement process. If your business is bidding on contracts in the UK, the OJEU is less likely to be a factor.
GPA
This is an acronym for the Government Procurement Agreement, an agreement established by the World Trade Organisation, and it regulates public procurement in all participating nations. The UK is a party to the GPA.
The agreement focuses on principles of openness, non-discrimination, and transparency. It is intended to keep the procurement process as open as possible, to minimise the risk of corruption.
ITPD, ISOS, ISDS, and ISFB
This set of acronyms is used in competitive dialogue procedures. These processes are reserved for more complex situations when public sector buyers need help from contractors to develop the solutions they need. The meanings of the acronyms are as follows:
- Invitation to Participate in Dialogue (ITPD)
- Invitation to Submit Outline Solutions (ISOS)
- Invitation to Submit Detailed Solutions (ISDS)
- Invitation to Submit Final Bids (ISFB)
Each acronym represents a step in the competitive dialogue process. They usually take place in the order listed above, and each step requires the bidder to provide more detailed information.
PQQ
This acronym stands for ‘pre-qualification questionnaire.’ It’s a questionnaire that buyers may invite potential contractors to complete in the early stages of the procurement process.
The questionnaire asks for information such as experience level, technical expertise, and business capacity. It’s designed to help buyers assess whether a business is a suitable candidate for a contract. Suitable prospects may be extended an invitation to tender, based on their responses.
Your Guide to Procurement
From the outside, the world of public procurement can be intimidating. As a business without past procurement experience, a helping hand can be a real benefit.
At Delta eSourcing, we believe that procurement should be an option for every business. We work with over 300 organisations representing over 6000 buyers, so we understand the landscape of public procurement. We’re committed to sharing our extensive knowledge with you, so your business can approach the public sector with confidence.
Contact us today, and let’s talk about your business’s future in public procurement.
