Public procurement, public invitations to tender, public orders... These are terms that can sometimes be obscure and put off young SMEs. But in the business world, there's a fine line between challenge and opportunity! So why and how should you go about responding to public tenders? Alain Wolgensinger, a specialist in optimising commercial performance, gives us an overview.
Who would think of depriving themselves of 130,000 customers? That's the number of public sector customers in France, according to the Directorate General for Business at the Ministry of the Economy. So many opportunities for companies and their sales staff to expand their portfolios with solvent customers. Bankruptcies of towns, departments or regions are rare! And yet... through ignorance or fear, few companies dare apply for public tenders.
Public contracts, public invitations to tender, public procurement: what are we actually talking about?
This concerns purchases made by public bodies. More specifically, public tenders or public contracts are used when public bodies invite applications from companies to supply goods, services or works. The spectrum of public procurement is therefore broad: supplies, works and services. Even a €1 pen bought by a town hall is considered a public purchase!
Please note: public calls for tender are published in certain media. These are also known as contract notices. Depending on the value of the contract, advertising may be compulsory.
After examining the responses to calls for tenderThe public procurement contract will ultimately be concluded between the public purchaser and the selected economic operator(s).
Is public procurement right for me?
Here are the most common objections:
"Is public procurement really worthwhile?
In 2022, €160 billion worth of public contracts were awarded under 235,600 contracts. These are the latest key figures released by the Observatoire économique de la commande publique (OECP) (Economic census of public procurement - Figures for 2022). These figures are underestimated because the OECP only lists contracts worth more than €90,000 excluding VAT.
"Public procurement is mainly for big companies!
And, according to the OECP census, in 2022, SMEs won more than 60 % of public contracts (in numbers)! A logical result, given that a call for tenders is generally divided into lots so that as many companies as possible can apply, whatever their size.
"Public procurement is only for the building and public works sector.
A mistake! Works accounted for 27 % of public contracts (by value) in 2022, far less than services (44 %) or even supplies (29 %). Insurer SMACL, meanwhile, has been awarded more than €100 million in 2020. IT and telecoms, law and society, technical hygiene, insurance, energy, catering, food, sport and leisure, security and safety, electronic payment systems, furniture, office equipment, traffic, maintenance, personal services, green spaces... Public procurement calls on all these sectors!
"Public procurement favours the lowest price, regardless of quality.
True in the past, this aspect is changing. Thus, in 2022, 29 % of public contracts include environmental provisions and 22 % of social clauses in their selection criteria.
These figures are even close to 50 % for public companies. Lastly, nearly 65 % of contracts were for prices may be discounted or revised in 2022.
"Public procurement offers no transparency, which encourages cartels.
This deleterious suspicion from the last century absolutely must be swept away. Today, the transparency of procedures and theequal treatment of candidates are part of the fundamental principles of public tenders. What's more, any unsuccessful candidate can legally demand an explanation!
"Public purchasers always pay late.
Is the public sector a bad payer?
Payment terms for public contracts are regulated: from 30 to 60 days depending on the type of entity. And penalties are applicable without this having any impact on their future eligibility.
Since the implementation of the Chorus Pro platform, according to users, payments have been accelerated with certain players (CCIs, for example).
What is the best strategy for winning public tenders?
Here's an example - inspired by a real case - of the SME TOUCLEAN, which specialises in the distribution of hygiene and cleaning products and equipment for local authorities, the hotel and catering industry, cleaning companies and industry.
After intensive training and reflection, supported by a consultant, TOUCLEAN is finalising its a 3-pronged strategy :
1/ firstly, enhanced upstream preparation
2/ secondly, faster processing of applications through greater efficiency 3/ thirdly, close monitoring and follow-up of successful tenders.
1 - Enhanced upstream preparation
Intensify its geographical coverage to :
- optimise routes for local authorities that never order full lorries
- obtain a better fill rate for its vehicles
Extreme selectivity in calls for tender
Rather than targeting all the public contracts in its sector of activity, the company prefers to target certain invitations to tender.
- Ideally, those pre-announced on the official APProch portal. This makes it easier for them to gather information from the public purchaser upstream.
- Those located only on areas to be densifiedThis may involve combining an approach targeting public entities and private companies to achieve economies of scale. "What's the point of travelling unprofitable kilometres?
- Those for which public purchasers commit (even morally) to a lot minimum order (to reduce unit logistics costs). "Curiously, this minimum quantity or amount obligation does not always appear in a call for tenders, which can lead to surprises.
- Those whose award criteria weight price at a maximum of 50 %. This is to give sufficient weight to the social, technical and environmental criteria that the company is keen to emphasise.
- Those for which the ratio of free samples to turnover does not exceed a certain percentage. TOUCLEAN would like to maintain sufficient profitability.
2 - Faster processing of applications through greater efficiency
TOUCLEAN is first and foremost a collective project management tool for :
- optimise resource management (man-time)
- Ensuring that each department is involved in its part of the project: processing/responding to invitations to tender, collecting prices, calculating costs, overall compliance with deadlines. "Everyone needs to know what to do and when!
The company is also banking on centralised IT price management to :
- improve visibility and consistency between the various calls for tenders currently being submitted
- gain negotiating power through the volume effect, while avoiding urgent over-solicitation of suppliers
Other action: a executive summary in the introduction to the dossier submitted.
This reminder of the essentials uses the SONCASE method, below:
The aim is to identify what, in the company's products or policy, satisfies the various motivations of a buyer - public or private. The arguments most frequently highlighted depend on the public purchaser's evaluation criteria.
For example:
- on-shelf delivery = convenience
- product sheets outlining the risks associated with certain products = safety
- low dosage on concentrated products = silver
- product refills or ISO 14000 certification = environment
Increased and controlled use of digital technology
TOUCLEAN now systematically uses the DUME (Single European Market Document). Updated regularly, it serves as a declaration on honour, enabling companies to provide buyers with proof of their skills and financial situation, in accordance with the "Tell us once" principle.
3 - Monitoring and meticulous downstream follow-up of successful tenders
After-the-fact evaluation of successful tenders
TOUCLEAN has defined Extended KPIs (key performance indicators) :
- Overall turnover per purchaser, in particular in the case of order form contracts in which the public purchaser makes no commitment to quantity
- profitability of each delivery
- share of emergency orders in total orders
- share of ancillary costs, such as special orders outside the public procurement contract
- qualitative criteria (relationship quality, for example)
Systematic contact even in the event of lost tenders
TOUCLEAN takes up the idea that "today's contact will become tomorrow's contract". And this applies in particular to "over-the-counter" contracts. In other words, one-off contracts of up to €40,000 excluding VAT, exempt from the strictest public procurement obligations.
What are the results?
2 months: that's how long it took to implement these new procedures.
From the very first year, TOUCLEAN observed a 15 % improvement in the ratio of cases filed to cases won.
Above all, its price scale has become more coherent and stable, offering a more complete range of products. better visibility suppliers and, as a result better negotiations. Finally, the approach to public-sector buyers has regained lustre with field sales staff, who have also seen the benefits of targeting sales outside public-sector contracts.
So, are you now ready to seize all the opportunities offered by public tenders?
