In this post we are going to look at UK government contracts. Specifically we will run through how much the sector is worth annually, and look at how businesses can pitch for UK government contracts using information publicly available, as well as apps such as IntelApp’s free tender finder.
The Scale of UK Government Spending
The British government is the single largest buyer of goods and services in the entire United Kingdom, with the Treasury allocating hundreds of billions of pounds annually to public spending. In 2022-23, the UK public sector spent more than £1.2 trillion, with a significant portion of this spend going on contracts awarded to private companies.
In fact, of the £379 billion annual UK government procurement spend, around 30-35% of this was awarded to private sector suppliers. Some of the sectors that majorly benefit from UK government contracts include Defence, healthcare, infrastructure, IT services, education, and general consultancy.
For any business, securing a UK government contract can be an absolute game-changer, offering a consistent (and oftentimes lucrative) revenue stream, credibility, and long-term growth opportunities.
Why Securing a UK Government Contract is Good for Business
As we hinted above, winning a prized UK government contract can lead to a considerable and steady income stream, enhanced credibility, and the potential for further opportunities. Companies that are awarded a first prize are more likely to get more in the future, and the key employees that manage these contracts within an organisation, may even see their own market value soaring.
Government contracts can range from small local council procurements (such as filling sinkholes in Calderdale) to multi-billion-pound national infrastructure projects such as the long-awaited HS2.
Some notable examples of government contracts and suppliers include:
- Serco and G4S: Regular contractors in the security, justice and defence sectors.
- Capita: Award multiple large-scale public sector contracts in digital services and outsourcing.
- COVID-19 Contracts: Companies such as PPE Medpro and Randox were awarded significant contracts during the pandemic, many of which were later criticised for lacking transparency and due diligence.
While some government contracts have sparked controversy and widespread public criticism over procurement ethics and low tax-payer value for money, the fact is that they still represent an enormous business opportunity for companies looking to expand their reach and grow.
How to Get UK Government Contracts
In this section we will look at the finer details of applying for a government contract in the UK.
How Are UK Government Contracts Awarded?
UK government contracts are awarded through a competitive and tightly regulated procurement process that is designed to ensure fairness, transparency, and value for tax payer money.
Public sector contracts, including those for goods, services, and works, are typically advertised on platforms such as the UK Government’s Contracts Finder and Find a Tender.
The process currently follows the Public Contracts Regulations 2015, which were retained post-Brexit but may be subject to reform in the near future. Individual Government departments and local authorities are responsible for awarding contracts within their own remit with ultimate oversight coming from the Treasury and the Paymaster General.
Who is Eligible to Bid?
Generally only UK-based businesses can apply for contracts with a few exceptions. However, any foreign business people looking to get involved will find that the UK’s business friendly climate means that they will be able to form a UK based company relatively easily.
While SMEs and mid-sized firms are welcome to apply for contracts, the reality is that large corporations are often in a strong position to win large, valuable, national contracts.
Depending on the particular contact in question, companies may need specific industry accreditations, ISO standards, or regulatory compliance. Key personnel such as CEO’s and FCO’ can also expect to be carefully vetted.
The Diligence & Onboarding Process
The due diligence process begins with Pre-qualification questionnaires (PQQs) which are intended to assess financial stability and experience. Following (successful) completion of this, an Invitation to Tender (ITT) may be forthcoming.
Other onboarding processes include financial and operational checks, background assessments on performance and history as well as ethical and legal compliance checks. The latter is especially important for high-value or sensitive government contracts.
How to Discover Your Competitors’ Government Contracts
The tendering process for UK government gigs is arduous and competitive. In order to gain some kind of edge, businesses must understand who their competitors are and what government contracts they are securing.
Fortunately all UK procurement processes are publicly accessible, making it pretty easy to analyse one’s competitors. Here’s how to do it:
Use UK Government Portals
The Contracts Finder site lists all government contracts for over £10,000 and is free to access.
Then the Find a Tender Service (FTS) was introduced as the post-Brexit replacement of the EU Tenders Electronic Daily (TED). At this time, FTS covers above-threshold contracts for central and local governments.
Check Company House & Financial Reports
Most government suppliers are required to publish financial statements (as are most UK companies for that). These can be obtained from Companies House (www.gov.uk/get-information-about-a-company) where members of the public can find the following information;
- Annual financial returns
- Ownership structures
- New contracts and revenue sources
Leverage Freedom of Information (FOI) Requests
Businesses can also request procurement details from the relevant government department under the Freedom of Information Act 2000. However note that turnaround times can be long, and some agencies provide heavily redacted versions of awarded contracts.
Still, effective use of FOI requests can reveal key details such as pricing structures, contract length, and service expectations.
Monitor Trade & Industry Publications
It is always wise for a company to subscribe to any and all available trade and industry publications that cater to its niche as they are an excellent way to stay abreast of developments in a given industry generally.
Additionally, publications such as Public Sector Executive, Government Business, and Civil Service World often report major contract awards and supplier performance. These periodicals may even offer some insight and advice into winning government contracts too.
Networking & Industry Events
It may also pay for senior business people to attend government procurement conferences and supplier days. Even if there are no current contracts up for grabs, it can be valuable to engage with public sector procurement officers in order to better understand the tendering process, and departmental expectations and get intel on any upcoming tenders.
Additionally it can also prove useful to build relationships with companies that already hold contracts for potential subcontracting opportunities. That said, some companies may have misgivings about fraternizing with the competition.
Final Thoughts
The UK government awards billions of pounds in contracts annually, making it a highly attractive market for suppliers. Whether you’re a fresh startup or a properly established business, securing a government contract can provide long-term stability, growth and kudos.
To stay ahead of the competition, tracking awarded contracts, researching competitors, and analyzing spending trends are all essential. By using government portals, FOI requests, and financial reports, businesses can develop stronger bidding strategies and ultimately secure more contracts.