Legislation to ensure SME engagement in public sector procurement is a start but fundamental barriers remain
On Wednesday I attended a roundtable session with Francis Maude MP, Minister for the Cabinet Office concerning new legislation aimed at making public sector procurement easier and more accessible to SMEs.
Hosted by the Crown Commercial Service in Liverpool, the roundtable focussed on central government efforts to award 25% of procurement spend by value with SMEs, directly or via supply chain, in 2015. The new legislation will:
- Ensure all public bodies are publicly accountable for paying suppliers and their sub-contractors within 30 days
- Abolish Pre-Qualification Questionnaires for low value contracts, simplifying and quickening the bidding process
- Ensure all public sector contracts above £25,000 (£10,000 for central government) are posted on the government’s contracts finder website (www.gov.uk/contracts-finder)
Public sector procurement has long been a bug bear for many of our members with a lack of transparency, communication combined with excessive administrative burdens resulting in SMEs being unable to do business with government and the wider private sector.
The new legislation is undoubtedly a step in the right direction but must act only as a starting point for a wider overhaul of how contracts in the entire public sector are advertised, awarded and subsequently managed. Local authorities are under pressure to abide to the Social Value Act and it will be interesting to see the extent to which they adopt the “single set of principles” that central government have embraced and legislated for.
Culture is a key watchword within any organisation and it’s fair to say that organisational culture within public sector procurement is powerful and entrenched. Instigating changes in mindset within such teams is undoubtedly difficult to achieve, particularly in these times of austerity, and it must be acknowledged that improvements have already been made in the operations of some local authorities including our own.
Access to procurement opportunities cannot simply been solved by a software-based solution. Contracts Finder will undoubtedly provide a useful source of intelligence and contract information, yet it is the relationships between buyer and contractor that must be facilitated to help engender trust between both parties.
Many ‘Meet the Buyer’ type events now take place enabling buyers to “engage SME customers” but where such events are costing SMEs astronomical figures just for a meeting, we must question their accessibility. Such Meet the Buyers must not price out the very audience they are supposed to attract.
I would be delighted to see the wider adoption of the approach taken by Liverpool City Council in recent months whereby dialogue with SMEs is undertaken on a one to one basis through channels such as the International Festival for Business, Chamber of Commerce and other business networks, which can facilitate public sector access to SMEs in a far more affordable way.
As for the ease with which our SMEs can now gain access to government contracts, we look forward to hearing about our members’ experiences.