How Consortium Co-operatives help SMEs Bid for Bigger Contracts
If you are looking to grow your business, but don’t feel ready to tender for larger value contracts on your own, joining a consortium co-operative could be the solution! Here Co-operative Development Scotland’s Inclusive Business Models Specialist, Suzanne Orchard explains more.
The Challenges Around Larger Value Tenders
Each year, billions of pounds of tendering opportunities are advertised across both the private and public sector in Scotland. Many SMEs are capable of providing the goods and services required in these tenders, but don’t feel ready to respond to the bid, so they miss out on opportunities to grow. SMEs cite their small size, lack of specific expertise and limited resources (to respond to these tenders) as barriers.
SMEs can overcome these hurdles by collaborating with other businesses. By working together as a consortium co-operative, businesses increase their capacity and their skills range, so they can bid for contracts previously out with their reach.
Consortium Co-operatives Explained
A consortium co-op is an organisation made up of businesses that come together for a shared purpose - for example - marketing, exporting, innovation and of course, tendering.
It’s run in a shared and equal way by all its members with the aim of achieving a common objective.
Being part of a consortium co-op reduces the costs and risks associated with expansion, while boosting economic growth, and allowing businesses to retain their brand identity, independence and control. It’s a model that works across all business sizes and sectors.
Benefits of a Consortium Co-operative
While there are other collaborative options when tendering, they are rarely as fair as a consortium co-op. One alternative approach is to have a main contractor with a number of sub-contractors, however, this isn’t normally a collaboration of equals. Subcontractors may have little say in important decisions and the main contractor may dictate terms, such as what work they get and when they are paid. In contrast to this, the consortium co-op offers a flat structure and a truly collaborative and democratic approach where all parties have an equal say.
Consortium Co-op Success Story
A great example of an organisation that successfully used a consortium co-op to tender is Granite Care Consortium (GCC). GCC was established with 10 members, to deliver a multi-million-pound public sector care contract in the northeast of Scotland.
The Care at Home Aberdeen City Contract covered virtually all publicly provided home care services in the city, and Aberdeen City Council was seeking one operator to deliver its services.
To answer this ask, the GCC partnership was formed. It brings together a mix of independent, third and private sector care providers, collectively with decades of experience in supplying health and social care services.
Now GCC provides users with quick and easy access to person-centred, integrated care. GCC creates market stability, improves outcomes for users and helps to build a consistently trained and skilled workforce.
How CDS Can Help
Co-operative Development Scotland (CDS) is part of Scottish Enterprise and operates on behalf of all Scotland’s enterprise agencies (Scottish Enterprise, Highlands and Islands Enterprise and South of Scotland Enterprise). CDS is here to help Scottish businesses explore co-operative and employee ownership models.
The specialists at CDS, will walk you through the process of setting up a consortium co-op, advise you on best practice, and give you free support with the legal aspects of the model.
Join the CDS and SDP Webinar
Working as Co-operative Development Scotland’s Inclusive Business Models Specialist has given me great insight into how the consortium co-operative model can help grow businesses.
I am really excited to share my experiences on 29 February, as I deliver a CDS webinar (with The Supplier Development Programme) on using the consortium co-op model to tender for larger contracts. This free webinar will cover the key characteristics of the model, benefits of joining a consortium co-operative, explanation of how the model is used for tendering, and the support CDS offers businesses to consider and adopt the model.
This is a great chance to learn how the consortium co-operative model can open up more business opportunities. If you are interested in joint tendering, then come along and find out more.
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