What’s the difference between private and public sector RFPs?

1. Regulatory structures

One of the key differences between private and public sector RFPs is the regulatory framework and transparency that governs the procurement process. As the public sector is funded by taxpayer money, it faces greater scrutiny and more stringent rules and is usually subject to statutory procedures and requirements to promote transparency, value for money, competition, non-discrimination and accountability. Public procurement laws and regulations differ on a national and international level, reflecting diverse national priorities and market conditions.

While still bound by general commercial laws, private companies have greater freedom to establish their own procurement policies and procedures. This flexibility allows for more tailored approaches, such as selective bidding processes, direct negotiations with suppliers, and the ability to prioritize factors like speed and existing supplier relationships over strict compliance measures

Advice for RFP teams

For public sector RFPs:

• Thoroughly research and understand the specific regulatory requirements for the public sector entity you’re bidding to. This knowledge will help you tailor your proposal to meet all necessary compliance standards.
• Consider how your proposal aligns with all relevant laws and regulations (and advances the policy drivers of the agency)
• Develop a checklist of regulatory requirements and use it to review your proposal before submission, ensuring you haven’t overlooked any critical compliance aspects.

For private sector RFPs:

• Familiarise yourself with the company’s specific procurement policies and priorities, as these may vary significantly between organisations.
• Be prepared for a potentially more informal process that may involve direct negotiations or selective invitations to bid.
• Focus on demonstrating value, efficiency, and alignment with the company’s business objectives rather than strict regulatory compliance.
• Be ready to sign non-disclosure agreements (NDAs) as private tenders often involve sensitive business information.

2. Understanding your audience: Who are you engaging with?

In the private sector, the essence of a private sector proposal lies in communicating with other businesses. Your audience typically comprises procurement managers, department heads, and Chief Executive Officers. The main focus is to demonstrate how your product or service aligns with your prospect’s corporate goals or resolves a pressing operational issue.

In contrast, public sector tenders are directed towards government entities. Here, you are usually addressing price and non-price selection criteria which will be evaluated against a scoring system. The stakes are higher because decision-makers (ie. such as the evaluation panel) must adhere to public accountability and justify their choices with meticulous scrutiny. Compliance requirements are often more stringent in regards to legal frameworks, documentation, selection criteria and ethical standards.

Advice for RFP Teams

For public sector RFPs:

• Tailor to compliance and accountability
• Structure around scoring criteria.
• Address all mandatory requirements (e.g., format, word count, and documentation).
• Clearly articulate how your solution meets public accountability standards and provides measurable value for money.
• Include evidence of past success in similar projects and detailed risk mitigation plans.
• Engage through formal channels.

For private sector RFPs:

• Highlight how your solution aligns with the company’s strategic goals (e.g., ROI, efficiency gains, or competitive advantage).
• Build rapport with key stakeholders through informal discussions or networking opportunities.
• Respect the higher degree of confidentiality in private tenders by safeguarding sensitive information and be ready to sign non-disclosure agreements (NDAs).
• Research the company’s specific procurement policies and priorities, as these may vary significantly between organisations.

3. The threshold factor: Contract value and risk commensurate with complexity

A key aspect of public sector RFPs is the concept of thresholds, where different rules are applied based on the contract value and level of risk. That is, for lower-value contracts, opportunities for limited or selective invitations may exist, which can be beneficial for small businesses or those on pre-approved panels. High-value contracts, on the other hand, typically mandate a formal, advertised, and arms-length tender process to ensure fairness and transparency in government spending.

Private sector RFPs, on the other hand, might be limited to a select group of pre-qualified suppliers based on existing relationships, or issued through industry networks.
It should be noted, however, that as contract values increase, whether in private or public sector scenarios, governance and compliance requirements grow more stringent. Board approvals and extensive evaluations often become necessary.

Advice for RFP teams

For public sector RFPs:

• Tailor your approach based on whether it’s a low or high value contract. Become familiar with multi-stage processes and phases (eg. Expression of Interest; Response to Tender).
• If you’re a small business, look for lower-value contraccts with limited competition.
• Consider applying for pre-approved supplier panels or frameworks to increase your chances of success.

For private sector RFPs:

• Develop a range of proposal templates to suit different levels of formality.
• Become familiar with internal processes and phases (eg. RFP, security questionnaire).
• Look at company websites to see if they accept new supplier registrations.