In this article, we’ll discuss:
- What the public sector market looks like for telecoms partners.
- Why SMEs are gaining easier access to public sector opportunities.
- What the Low Value Purchasing System (LVPS) is and how it works.
- How Gamma and Maxim Growth can help partners enter the market quickly.
- Which common public sector procurement myths are no longer true.
Many resellers assume that public sector procurement is only accessible to the largest suppliers. It’s a sector with a reputation of being filled with complex frameworks and lengthy tender processes. A long list of lengthy compliance requirements tends to be the norm.
Together, they all make the market seem difficult to navigate. Yet the state of play in public sector procurement is vastly different to its initial reputation.
As Tony Round (Director of Maxim Growth) describes, it’s a ‘much more pro-SME market.’ There’s a ‘positive environment’ in which SMEs can enter the market and find new ways to secure business.
This is where the Low Value Purchase System (LVPS) comes into play. For partners looking to expand into new verticals, public sector procurement is becoming more accessible than ever before.
Matt Barnett (Channel Director, Gamma Communications) and Tony sat down to look through LVPS and why partners should explore public sector opportunities. From common myths to direct awards, these two experts provide a complete view on the potential behind LVPS.
Why does the public sector represent a huge growth opportunity?
Public sector bodies approximately spend £407 billion a year on goods and services. From that total, £3 billion is dedicated towards telecoms.
Few appreciate, or are even aware of, the size of the opportunity at hand.
It’s crucial to remember that the public sector extends beyond central government. NHS trusts, educational institutes and housing associations are all part of the public sector.
With almost 1500 housing associations, and over 24,000 primary schools, there’s ‘no end of small organisations within the government umbrella.’ Tony highlights how 21% of procurement spend is dedicated towards SMEs, translating to £45.2 billion.
Remember, the public sector isn’t just one sole buyer. It’s a culmination of thousands of organisations looking to procure services. Telecommunications is a prominent spending point for all these organisations.
Why are the opportunities for SMEs growing?
There are several factors influencing the SME opportunities within the public sector.
First, there’s the Procurement Act 2023. Several reforms were introduced to make it easier for SMEs to compete for contracts. Common barriers to entry, such as opportunity visibilities and having insurance before the award of a contract, were either changed or removed.
Tony mentions how every central government department now has ‘someone responsible for driving procurement from SMEs.’ That explains the steady increase in procurement spending and the change in tactics from local authorities.
Matt observes how there’s a ‘leaning towards local provisioning in some of those bids.’ Before the Procurement Act, local buyers were stopped from favouring local businesses. Now, for any below-threshold contracts ‘deemed by the government to be of low value’, they can ‘ringfence them’ for organisations ‘within a parameter.’
What matters, for Tony, is that ‘it’s about giving something back to the local community.’ Spending money with local suppliers puts money back into the local economy, which Tony calls a ‘virtuous circle.’
The real question though is how can partners get involved in the market?
What is LVPS?
While Tony makes the valuable point that there are ‘too many acronyms in government circumstances’, this is the one we need to remember.
LVPS, as defined by the Government Commercial Agency, is for ‘low-cost, low-value and uncomplicated common goods and services.’ Contracts can be valued up to £214,000 and can either be distributed through direct award or via mini competitions.
The frameworks strength lies in its suitability for SMEs. Smaller businesses and Voluntary, Community, and Social Enterprises (VCSEs) can join LVPS whenever they choose. Larger frameworks tend to lock in suppliers from day one, but prospective SMEs can gain recognition within 2-3 weeks.
A focus on local value is conducted through a dynamic filtering system. Public sector buyers can filter suppliers through their location, allowing the aforementioned ‘virtuous cycle’ to continue.
And why does LVPS matter for partners? Matt highlights how these opportunities stretch across the likes of UCaaS, connectivity and mobile. There’s no shortage in the routes partners can explore to secure these contracts.
Additionally, the contract size ‘sits squarely within the target market and the sweet spot of the type of business that resellers are going after.’ Again, LVPS supports the public sector ambitions of these SMEs and the suppliers that support them.
What are the biggest public sector procurement ‘myths’?
Public sector procurement has a reputation of being complicated. Yet the ‘myths’ surrounding procurement are more than capable of being debunked.
From the myths Matt proposed, Tony had a response for each of them:
- We’re too small: There aren’t any barriers for small businesses competing for contracts ‘within their wheelhouse.’ Tony advises SMEs to ‘be realistic’ with what they’re targeting, especially within the ‘risk averse’ public sector.
- We need public sector experience: Before, if a business hadn’t worked within a particular area of the public sector, it would be harder for them to win those contracts. The Procurement Act has helped with this, as relevant experience matters more than direct public sector experience. Whether it’s private sector or community sector, what matters is the work itself.
- We need to win huge frameworks first: SMEs don’t have to be on these ‘big, chunky frameworks to get started.’ 66% of business goes through technology frameworks, leaving 34% still to be accessed. Not every business needs to opt for G-Cloud or the other larger frameworks.
- Public sector procurement is too complicated: It takes time to win any business, regardless of sector. The red tape and acronyms might seem intimidating, but with patience, a pipeline can be built. It’s ‘not an unachievable market’, and with ‘a little effort’, those opportunities start coming through the door.
The good news is that there are providers there to help uncover those public sector opportunities.
How can Gamma and Maxim Growth help partners get started?
There’s no better time for partners to move from public sector curiosity to active selling.
Tony encourages partners to reach out and ‘make an informed decision.’ It’s better to have these conversations rather than ‘going on instinct’ and seeing whether it’s the right channel for them.
Gamma and Maxim Growth have come together to create a package designed to get partners onboarded on the LVPS framework. It’s a ‘good first step’ towards becoming a government approved supplier, especially as businesses can position themselves as a ‘public sector-friendly organisation.’
This package includes:
- Onboarding support and access to the government’s e-sourcing tool.
- Registration on the Central Digital Platform and Find a Tender site, providing full transparency on contracts.
- Continuous advice and guidance on how to navigate the public sector pipeline.
They key thing is to be proactive and ‘treat it like every other sales interaction.’ Considering everyone else is ‘out there shaking the tress’, it isn’t wise to be reactive and ‘wait for something to fall into your lap.’
More than compliance
Success in the public sector relies on understanding the market itself. From the numerous acronyms to transparency and social value, the public sector is dictated by more than the regulations that guide it.
The market is large, and the introduction of LVPS means that it’s more pro-SME that initially thought. Low barriers to entry and greater accessibility means those opportunities are there and waiting.
Working with Gamma and Maxim Growth is a ‘quick and efficient’ way of becoming part of the public sector supply chain. Partners can find a new revenue engine via these low-threshold contracts that still generate social value.
For Tony, those values need to resonate. If these companies are communicating social value in the right way, that social value becomes clear.
Understanding those public sector challenges builds trust and reputation. Being part of the LVPS is the best place to start.
Quick Answers: Why Could LVPS Be the Fastest Route to Public Sector Opportunities?
What is LVPS?
The Low Value Purchasing System (LVPS) is a government-recognised framework that helps public sector organisations purchase lower-value services through a compliant procurement route.
What is the maximum contract value through LVPS?
The threshold is £214,000 total contract value, including VAT for most public sector organisations.
Can SMEs win public sector telecoms contracts?
Public sector buyers are increasingly encouraged to procure from SMEs, with local authorities already directing significant spend to smaller suppliers. There’s now a greater focus on building local value and opting to tender with local businesses.
Do I need public sector experience?
No, relevant experience from private sector projects can be used where it demonstrates similar capabilities and outcomes.
