What's The Difference: Public & Private Tenders? | Clarity Stack

Posted on 2 Jun 2021

4 minutes

What's The Difference: Public & Private Tenders?

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If you’re the kind of person who finds the lead generation process not only difficult, but a bit confusing, too, then fear no more. Here, we clarify some of the information surrounding tenders for you by explaining the difference between public and private tenders and how Clarity Stack can help you find them.

Tenders represent incredibly valuable growth opportunities, but coming across them isn’t easy. In fact, it can be a minefield for some, especially when there are both publicly available and private tenders going around your industry.

The thing is, tenders are a sure-fire sign that a business is looking to appoint someone to provide their services and they quite often share some incredibly insightful information relating to the opportunity that can help you to decide whether or not to pursue it. At the same time, the fact that there are some businesses able to capitalize on opportunities that others, in the same sector, cannot is understandably confusing for many business owners and it all comes down to the fact that some tenders are made available in the public domain while others are offered privately.

So what’s the difference, and why do businesses do this?

What is a public tender?

Put in the simplest possible terms, a public tender is a contract that is awarded by a business that operates in the public sector and they are obligated to advertise these opportunities in the public domain to invite interested parties to declare an interest in the opportunity. 

Many of the businesses operating in the public sector are supported by funds supplied by their local government and that’s one of the main reasons why there is a need to share the contract opportunity publicly. There are also regulations in place surrounding factors such as competition and obtaining value for money, meaning businesses of all sizes must be given the chance to pitch to avoid larger, established businesses sweeping up major contracts and wiping out smaller agencies looking to gain a foothold in the market.

There are also strict criteria used to ‘score’ the successful bidders and to create a shortlist who are eventually invited to participate in the pitch process. 

What is a private tender?

In contrast, those operating in the private sector are under no obligation to publicly advertise the opportunity to potential bidders, and can therefore offer the contracts out to specifically chosen agencies who can make the decision over whether or not to proceed with the proposal.

The ‘scoring’ system is often less stringent than the method used in the public sector as the chosen bidders may have already been assessed based on various, less-regulated factors. It’s also important to add that when a contract is awarded there is no obligation to publicise the news, yet there are still strict regulations in place in relation to fairness in the bidding process.  

Why do businesses offer private tenders?

Quite often it’s the case that a business will already have a network of suppliers or contacts and they will offer the contract to one of these partners instead of putting the contract out to tender at all. 

In fact, some are of the belief that there is never actually a contract that is up for grabs at all and, instead, it is more likely that the business is seeking to get a better deal from their existing supplier in terms of increased support for the same or less money, or that they are pressuring them to improve their output.

If and when they do choose to put out a private tender they may simply decide on the invited parties based on the fact that they have an existing connection with the business, or perhaps they have done great work for competitors in the past. Alternatively, it may be as simple as the main point of contact has an excellent relationship with a key employee who can vouch for the quality and professionalism of their work and as a new hire they are looking to put their stamp on things by shaking up their list of current suppliers.

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