Home Business NewsOlympics London SMEs! It’s still worth bidding for Olympic Games contracts

London SMEs! It’s still worth bidding for Olympic Games contracts

19th Jun 12 8:35 am

There’s still work to be done for London 2012, and beyond the Games too. Our ultimate guide to applying for contracts through the CompeteFor website explains all

The Olympic Games are mind-bogglingly complex to run. It’s not just about whacking a few steel bars together to knock up a snazzy looking Velodrome, you know. The Olympic Delivery Authority (ODA) has made around £6 billion worth of contracts available to UK businesses, covering activities such as the task of clearing pondweed from the surface of the rowing lake and supplying the bed linen for the Olympic and Paralympic Village, to running the veterinary clinic in Greenwich Park.

Further down the supply chain, of the contracts that have been secured through the CompeteFor procurement portal, around 70 per cent have gone to SMEs, with around 20 per cent of the total being won by companies with 10 employees or fewer. About half the awarded contracts have gone to companies from London and the South East.

So why should you waste your time trying to win one of the remaining contracts? After all, public sector contracts are notorious for their bureaucracy, and you’ll probably face fierce competition.

Why bother applying for a London 2012 contract?

The prestige of working on an Olympic Games and Paralympic Games contract isn’t just a feel-good driver to motivate your employees with. It carries great weight with potential clients, both private and public. “It makes a statement about your business,” says Paul Evans, area director for Essex and East London, Lloyds TSB Commercial.

“It proves your business is fit, that it has green credentials [one of the requirements of winning work on the Games], that you are a serious business player.” Evans points out a London 2012 contract will impress the biggest private sector businesses, which would need you to tick many of the same boxes before employing you.

Colin Stanbridge, chief executive of the London Chamber of Commerce and Industry (LCCI), agrees. “You gain expertise not just on the Games but in major sporting events, of which there are more and more. If you’re going to pitch for something and you have a world renowned contract of some description, that’s a hell of an advantage you have.”

Evans says that some of his clients that have won London 2012 contracts (one in three contract winners bank with Lloyds TSB Commercial) are planning to go for contracts at the Rio 2016 Games.

Essex-based Avalon Abseiling won a contract to install lights in the Velodrome, a task that required its abseilers to hang from the roof structure. Business development director Jon O’Neill says the experience of working on the contract was “overall, fantastic”. “It springs onto other jobs and gives you kudos.” The company is now installing LED lights on Tower Bridge in time for the Jubilee.

There is another highly appealing benefit familiar to any company that has completed public sector work before: that payment terms are much more secure. O’Neill agrees: “We felt very safe because the ODA aren’t going to stiff somebody, and the council aren’t going to either.”

It’s worth pointing out that a good chunk (roughly four in five) of the London 2012 contracts are sub-contracts from large companies that have won major contracts, so you will actually be dealing with their payment terms. However, as they have jumped through the hoops to become a major London 2012 contractor, their payment terms will usually be more secure than your average company.

So you’ve read this far, but perhaps you’re still wondering why you should go through all the faff of applying for a contract you might not even win.

Firstly, this isn’t just about contracts in the run-up to the Games. The CompeteFor website, through which you apply for contracts, will continue to feature a great number of legacy contracts – particularly in the construction sector as the Park is transformed after the Games. It also features – and will continue to feature – a vast number of other London-based public sector contracts not connected with the London 2012 Games, from the likes of Network Rail, the London boroughs, the Met and others. The Glasgow Commonwealth Games is advertising contracts through CompeteFor too.

Secondly, the application process for contracts can in itself potentially help your business. Stanbridge believes this: “Perhaps you got to interview stage to tender but you then weren’t successful. You haven’t got the contract, but you have learnt about bidding for a public contract.” And, as many managers who have been mystified by the usual public sector tendering process can tell you, those lessons can prove invaluable.

How do you apply for London 2012 contracts?

As CEO of the LCCI, Stanbridge was directly involved in mapping out how the process of tendering for a London 2012 contract should work. “We wanted to create a procurement portal that dealt with all the problems SMEs told us they have usually with public procurement process,” he says. The result was the CompeteFor procurement portal website. “The idea of CompeteFor was that you only have to register once [to be able to apply for all contracts]. You select what type of work you’re interested in, then you get an email telling you when there is a tender suitable for you.

“And if you don’t have things you need like a Health & Safety policy, we direct you to Business Link that helps you do that, with templates for those sorts of things, to help small companies get on the supply chain.”

You do need to prove that you have certain policies in place, such as diversity and sustainability, as well as H&S. Lloyds TSB’s Evans cautions that this might be a barrier to some businesses, but that implementing those policies can help you win business from larger private sector companies further down the line. He also says Lloyds TSB has helped lots of its clients with putting these policies in place.

CompeteFor boasts another very useful feature for SMEs. Evans explains: “CompeteFor is like a business dating agency. If you’re not big enough to satisfy the contract alone, it will match you with other companies to help you do business together.”

Once you have registered and identified a contract, you need to apply for that specific contract. Brett Taylor is the CEO of the London Business Network, the organisation created to help businesses capitalise on London 2012 opportunities. He explains that when you have identified a specific contract you want, you fill out a questionnaire with questions from the contract buyer. This shouldn’t take nearly as long as the PQQ of public sector contracts, as much of the information about your business has already been provided to the company through your registration with CompeteFor.

The answers on the questionnaire are scored, then “the buyer is presented anonymously with scores, not with business names, so they don’t pick the companies they already know,” Taylor explains. The highest scoring companies then make a shortlist, which is when your company’s identity is revealed.

Taylor says response times are usually a week from the initial questionnaire deadline until you hear back. He explains: “You know if you’re on the shortlist almost immediately after the deadline date for the opportunity, and certainly within a week. Then you have longer period for a formal response to tender – the procurement process after the questionnaire response takes about two or three months.”

Tips on putting your bid together, from Paul Evans of Lloyds:

– Talk about cashflow forecast and profit – turnover must be four times the size of the contract. The buyer needs financial security.

– Think of your bid as like writing a CV – what makes you stand out?

– If you’re struggling with putting policies in place such as health and safety, Lloyds TSB can help.

How can your bank help you win London 2012 contracts?

Evans is emphatic that a business’ bank should be there to support it with the bidding process and completion of O
lympic contracts. He says that in its unique position as Olympic sponsor, Lloyds TSB can also help with the application process, as well as more obviously supporting the business with finance.

Evans says that the part of his involvement in the London 2012 Games that he is most proud of is “when customers raise their own bar of what they think they can do”.

And that’s really what much of the contracts side of London 2012 is all about: opening up opportunities for small and medium-sized businesses, for now and for beyond 2012. As Taylor says: “The London 2012 Games will deliver a huge legacy opportunity for us to apply the same principles of opening up supply chains and breaking them into smaller pieces of work readily delivered by small businesses, so they can work on major infrastructure projects across the country.”

With the right support, it seems everyone is confident that London’s SME businesses can achieve the honour and prestige of working on the world’s greatest sporting event. Now it’s up to you to prove them right.

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