SME Guide to Bidding for Government Contracts

The UK Government has made several changes over the past few years to make it easier for SMEs to apply for and win contracts for government work. Most notably, the Procurement Act 2023, fully implemented from February 2025, has simplified and updated the public procurement process, creating new opportunities for small businesses.

Why apply?

The public sector remains a valuable market for SMEs. As of 1st April 2025, all central government departments, executive agencies, and non-departmental public bodies must now set their own ambitious three-year targets for direct spend with SMEs, to be achieved by the financial year ending March 2028. These targets must be approved by the relevant departmental minister and reported annually, with results published by 30th September each year for the previous financial year. This, and other changes made by central government in recent years, is part of a wider plan to encourage SMEs to bid for public sector contracts.

This means now is a great time to make a name for your SME within the public sector.

In terms of benefits for SMEs, the public sector has a longstanding reputation for fulfilling payments on time, so you can be sure that you are dealing with a reliable and reputable customer. The government also tends to have more favourable payment terms than the private sector, outlining that every organisation in their supply chain must be paid within 30 days.

Moreover, being able to say that you’ve won a tender and provided goods and services to the public sector can drive more business to your SME, as it will establish you above competitors in the eyes of potential clients.

The process

When a public sector company needs to outsource a service or buy something, they must legally go through a legally regulated procurement process. This ensures that all businesses have a fair and equal chance at securing the work.

Most contracts are now listed on a Central Digital Platform (CDP). This is where you can find and apply for government contracts. To get started, you’ll need to register your business on the CDP, find contracts that suit your services, and submit your application (or ‘tender’) before the deadline.

Main types of contract processes under the new Procurement Act 2023:

Single-stage (Open) procedure

Anyone can apply and submit a bid by the deadline.

Competitive Flexible procedure

The buyer designs a multi-stage process, which might include things like interviews, product demos, or back-and-forth questions. This is commonly used for more complicated projects.

Direct award

Used in urgent or special situations where there’s no time or need for competition.

These changes aim to reduce administrative burdens and make the process more accessible to SMEs.

If you’re serious about winning government contracts, it’s important to sign up for alerts so that you stay up to date with any new opportunities as soon as they arise.

Tips for your application

1. Study the procurement policy and guidelines carefully

Public sector procurement policies will outline the body’s unique tender process and provide guidance on how to bid for a contract. Don’t overlook this – study it carefully as it will give you an insider’s view of how the process works.

Be sure to scour the body’s website and search for any application guidance offered by the public body itself. For example, the UK Government's guidelines advise first-time bidders to apply for contracts below £100k which don’t require completion of the pre-qualification questionnaires.

It’s therefore well worth reading up on any advice given by each public sector body before you apply for their contracts, as guidance such as the above could prove highly valuable to any small business applying for the first time.

2. Make sure you fit the requirements

Before you do anything else, sit down with the teams who will be delivering the work and go through the requirements document. It’s vital to be honest and realistic about if you’ll actually be able to deliver the work to a high standard. If it seems like a stretch, either figure out how you can bridge the gap, or wait for another opportunity which better aligns with your business offer.

3. Pay close attention to weightings

The requirement document will have evaluation criteria and, much like a job application role requirement, may also have essential criteria which your business must be able to demonstrate. There may also be weightings outlined in the requirement document, which you should bear in mind when completing your application.

The first step of writing up your tender application should involve identifying a couple of past examples for each of the evaluation criteria or weightings, and ensuring you find an appropriate way of including these within your application.

4. Highlight your strengths

Public sector organisations are already aware that small firms are likely to be more flexible and cheaper to work with than large corporations. Upsell this aspect of working with your SME - prove how you’ll be providing them excellent value for money and that you can offer something unique.

If you have staff who will be delivering the project that have worked in the public sector, highlight this to demonstrate that your business already has an insider’s understanding of how public services work. Don’t shy away from highlighting similar projects you’ve completed in the past and back up every statement up with clear examples or case studies of previous work to make yourself stand out against competing government suppliers.

5. Dot your 'i’s

It’s important to recognize that you need to approach each application with precision. This also applies to sections which require information about your company's policies and practices, such as your approach to corporate social responsibility or your equal-opportunities procedures. These aspects of the application may not seem as important to you, but this sort of detail will have an impact on how the body views your SME overall.

Be scrupulous with your written application, giving yourself plenty of time to draft and redraft it. Before you send it, make sure it’s been quality-checked by any managers who will responsible for delivering the work.

Finally, it’s always good practice to conduct a thorough spelling and grammar check, so make use of your company copywriter or editor if you have one.