How to win council contracts
- Local authorities considering outsourcing services look for more than just the best price
- Businesses tendering for public sector contracts also need to show how they would react in a crisis and protect sensitive data, and demonstrate their social value
- We discuss some of the key considerations for private sector firms targeting public sector contracts
With one-third of all council services now being outsourced, there are clearly enormous opportunities for private sector companies to win public sector contracts.
Having a business continuity plan is a key consideration in developing your own organisational resilience.”
Gavin Chalmers, Strategic Risk Practice Team Leader, Zurich Municipal
However, there is more to successfully tendering for such contracts than simply demonstrating how you could deliver a quality service at a competitive price.
As local authorities remain ultimately responsible for ensuring the safe delivery of the services they are outsourcing, they will have many detailed questions to ask of private sector companies tendering for work.
We examine some of the most important considerations for private sector firms.
Risk and business continuity management
How you manage risk and govern your affairs will be a key consideration. Public sector organisations need to ensure that any organisation supplying services is resilient.
Gavin Chalmers, Strategic Risk Practice Team Leader, Zurich Municipal, says: “You should understand the key threats that could cause a business interruption to your organisation, such as a loss of a main office through fire or flood, IT failure or a flu pandemic affecting staffing levels. Having a business continuity plan is a key consideration in developing your own organisational resilience.”
There may also be threats specific to your industry sector. For example, the funding gap in social care has been well documented, and has led to a number of providers struggling to survive financially.
The upcoming introduction of the National Living Wage has also been tipped to cause further problems for social care providers.
Your business continuity plan should highlight how you would react and respond to the key threats you face, and should include some high level contingency measures.
You are likely to be asked to provide a plan as part of the process of any tendering of contracts, particularly those where failure of delivery will have an impact on the health and well-being of service users or have a financial impact.
When local authorities suffer a data breach – and more than half reportedly have in the past two years – they can suffer significant reputational damage and also face heavy fines from the Information Commissioner’s Office.
It is therefore understandable that authorities will demand rigorous standards from their suppliers when it comes to information governance.
Providers of social care and corporate services, in particular, are likely to be required to store or process significant amounts of personal or sensitive data. But, protecting this data isn’t just about firewalls and antivirus software.
Chalmers says: “There is a misconception that information risks are purely an IT issue, with organisations putting their trust in technology to mitigate these risks. In fact, in broad terms, more than 70% of an organisation’s information risk exposure comes from its own employees, be it negligent or malicious.”
Risks could include employees falling victim to phishing scams or simple acts of carelessness, for example losing a memory stick, or failing to ensure sensitive documents are shredded before being disposed of.
Chalmers adds: “You should consider what data you may be holding or processing, how sensitive is it, and what protocols you will need to protect it.”
Social Value impact
The Social Value Act 2012 requires public sector organisations to consider how any services they commission could improve the economic, social and environmental wellbeing of their area.
“Local authorities will therefore be looking not only at the value of a contract but also at the wider benefit to the community,” says Chalmers.
Examples of social value could include a pledge to employ a certain number of apprentices, or a commitment to using local firms when sub-contracting.
As part of your tender process you should think about how you can deliver social value.
Supply chain management
The resilience of your supply chain may be considered as part of the procurement process, and an ability to identify the vulnerabilities and manage the risks is vital.
Chalmers says: “How would you react if one of your key suppliers failed, and have you thought through the impact of this on your client? What options have you considered to minimise risk within your supply chain?”
Good supply chain management also overlaps with some of the other areas mentioned above. For example, while it is important to adopt a business continuity plan for your own organisation, you should also understand the business continuity plans your suppliers have in place.
Equally, you should consider what information governance measures these organisations have to protect data you may be sharing with them.