When it comes to comparing proposals in the public sector and private sector, the differences appear to be obvious for many Professionals. However, if confronted with questions and requests to describe these differences in detail, and an expectation to explain why these exist, some might struggle to provide a suitable answer. There is an advantage to knowing these differences, as it facilitates a more specific approach in responding to RFIs and RFPs, hence producing more winning proposals.
To provide an objective comparison and achieve tangible results, a 3-step approach can be deployed. This will aim to offer a comprehensive definition for both sectors in the first step which, subsequently, will provide us with the tools needed to properly identify and differentiate both sectors. To round up, some experienced-based clarifications will be shared to address and challenge an inaccurate claim in the industry which is to present proposals in the public sector as “easy wins”.
Public vs. Private – It Is Quite Clear, Isn’t It?
It is simple to sense the difference, one would say. But is that so? Well, not always! What is often meant under the term public sector are official entities i.e., federal and state governments, public institutions, and public agencies. For example, the State Department for transportation of a country could issue an RFP for maintenance services of its roads and bridges, or to provide human resource services. This RFP would be considered a public sector tender because the issuer or the client is a government institution. Another key aspect in differentiating between the two is that tenders in the public sector are mostly financed by taxpayer’s money, whereas in the private sector companies are financed by private shareholders.
It should be noted that many companies have their finances shared both by public and private stakeholders, including some government institutions and companies. This model mostly works within a Public-private Partnership (PPP). However, if most of the shares are being held and guaranteed by a State, these companies are considered as public companies, i.e., Deutsche Bahn in Germany. In this context, the proposal preparation may often not be one that fully integrates some typical public sector proposal characteristics, including the use of too many templates, non-negotiable rules, price benchmarking, just to name a few. Due to the presence of private shareholders, a clear intention of focusing not just on the price but also on the added value would be more requested and visible. Proposals with the highest chances of winning often provide a great combination of both.
Understanding the Differences
I would hopefully not be disclosing any secret by asserting that the public sector is very price sensitive which, sometimes, makes it tough for proposal professionals to deliver best-in-class solutions. However, it can be helpful to know and understand why. As mentioned above, in the public sector taxpayer’s money is often involved. As a result, generating savings and ensuring that only the minimum is being spent becomes the priority for the officials involved. Very often, the price is – sadly – the only main criteria to identify the winner of a tender.
To be clear, templates are also used in proposals for the private sector. However, the amount used in the public sector is far more important than in the private sector. These templates are mostly in Microsoft Word or Excel and include other official documents that often must be filled out and submitted in the same format. In the public sector, it is not rare to complete a proposal only by filling out templates that were provided by the Client and returning them per post or uploading them in an online system via a specific platform.
Proposal instructions in the private sector however are more liberal. Some would say “very straight forward”, in the sense that most of the restrictions visible in the public sector do not apply. Unlike in the public sector, clients in the private sector are not as price sensitive – at least they do not make it that visible. They tend to focus more on the added value that the proposed solution would provide to them. An illustration can be the structure of the RFPs which – from my experience – are shorter and more open for alternative solutions.
Public Sector Proposals = Easy win? Not really!
A comparative assessment of proposals in these two sectors was the main purpose of this article. However, this assessment, even though based on many years of experience in the industry, would not be complete without addressing an old concern which I considered to be a false claim.
I wish to address and strongly denounce the misconception that public sector proposals would be easy to deal with and that somehow, those involved there would just be looking for “easy wins” – nothing could be further from the truth! Yes, proposals in the public sector are generally price sensitive but this does not mean that the competition there is not tough.
What I’ve noticed however, is that especially with public sector proposals where the exclusive use of templates is required, it is sometimes very difficult to apply best practices that could help secure a win. The best practices may be in contradiction with the requirements, hence leading to being non-compliant which is of course something to avoid at all costs. Thankfully, deals won in the public sector often tend to be for a relatively long period of time with high chances of renewals when the supplier performs well.
While the argumentation in this article is based on many years of experience in the industry, it should be noted and acknowledged that exceptions can be observed. If viewed as a rule, it is fair to say that these exceptions indeed confirm the rule. Would you agree?
Vatis Tsague is a Proposal Professional with over 10 years of experience in sales including in proposal management. He holds a Master’s degree in political sciences, major: International Relations from the Technical University of Darmstadt (Germany) and a Diploma in International Business Law from the London School of International Business. He is also the author of many articles on proposal management topics and has been a valuable contributor to many national and international APMP events. Vatis Tsague is CP APMP certified.