KPIs and SLAs are the measures that define success in a public sector contract. A KPI (key performance indicator) tracks whether you are hitting the outcomes that matter, while an SLA (service level agreement) sets the minimum standards you must meet. Getting them right in your tender is essential, because the promises you make in a bid become the commitments you are measured against after award. This guide explains how KPIs and SLAs work in tenders and how to handle them well.
If you are still getting to grips with the basics, our guide to tendering in business is a good place to start.
What are KPIs and SLAs in a tender?
Firstly, a key performance indicator is a measurable target that shows how well a contract is being delivered. Examples include response times, completion rates, customer satisfaction scores, and social value outcomes. A service level agreement, by contrast, defines the guaranteed standard of service — for instance, resolving a fault within four hours, or achieving 99% availability.
Put simply: KPIs measure performance over time, while SLAs set the baseline you must never drop below. Together, they turn the commitments in your tender into something the buyer can monitor and enforce.
Why KPIs matter more under the Procurement Act 2023
In fact, performance measurement has become far more visible. Under Section 52 of the Procurement Act 2023, any public contract worth more than £5 million must have at least three KPIs published, with performance reported at least once a year. Those results are published on the Central Digital Platform for anyone to see.
This matters for two reasons. First, your delivery record is now public, which affects your reputation and your future bids. Second, buyers are paying closer attention to whether your proposed KPIs are realistic. As a result, credible, well-evidenced performance commitments carry real weight at evaluation.
How KPIs and SLAs are used in the bidding process
In practice, KPIs and SLAs appear at several points in a procurement. Understanding where helps you respond well.
- In the specification. The buyer often sets out required KPIs and service levels. Read these carefully — they define what “good” looks like.
- In your quality responses. You may be asked how you will meet or exceed the standards, and how you will monitor and report on them.
- In the pricing. Service levels have cost implications, so your commercial response must reflect the standards you are promising.
- In contract management. After award, your KPIs and SLAs become the basis for performance reviews, and sometimes for penalties or incentives.
Because these commitments are binding, honesty is essential. Never promise a service level you cannot sustain simply to score points — it will cost you later.
How to write strong KPI and SLA responses
Ultimately, evaluators reward responses that are specific, measurable and realistic. To stand out, you should:
- Propose meaningful metrics. Choose KPIs that reflect the outcomes the buyer actually cares about, not vanity measures.
- Show how you will monitor them. Explain your reporting tools, review cadence and escalation process.
- Evidence past performance. Use real data from previous contracts to prove you can hit the targets.
- Link to continuous improvement. Describe how you will use KPI data to improve delivery over time.
- Be realistic. Stretch targets are good, but only if you can deliver them consistently.
A professional bid writer can help you frame these commitments so they score well without over-promising. If you also want to strengthen the wider quality of your submission, our guidance on how to win a tender pulls the whole picture together.
Frequently asked questions
What is the difference between a KPI and an SLA?
A KPI measures how well a contract is performing against target outcomes over time. An SLA sets the minimum guaranteed standard of service. KPIs track performance; SLAs define the floor you must not fall below.
How many KPIs are required under the Procurement Act 2023?
For public contracts worth more than £5 million, buyers must publish at least three KPIs and report performance against them at least once a year. Lower-value contracts have no fixed requirement, but KPIs are still commonly used.
Are KPIs in a tender legally binding?
Once agreed in the contract, KPIs and SLAs form part of your contractual obligations. Missing them can lead to performance reviews, remediation plans, financial penalties, or in serious cases, termination.
Should I propose my own KPIs in a bid?
Often yes. Where the buyer invites you to suggest metrics, proposing meaningful, well-evidenced KPIs shows maturity and can improve your score — provided the targets are realistic.
Win contracts with credible performance commitments
KPIs and SLAs are where strong delivery meets strong bid writing. If you would like help crafting commitments that score highly and hold up in delivery, our bid writing team can help. Get in touch with Together: The Hudson Collective to start winning more, faster.
Source: Procurement Act 2023, Section 52. This article is for general guidance and does not constitute legal advice.