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Small businesses offer great value to our local communities but they continue to face significant barriers in winning Government contracts. And it is mainly the smallest firms – those employing 10 members of staff or less – that rarely get a look-in when it comes to public sector contracts.

A survey in 2008 showed that more than three quarters (76%) of small firms feel that there are many barriers preventing them being fully aware of the public procurement opportunities that are available to them – both at a local and national level.  

The Federation of Small Businesses (FSB) Annual Survey released in 2010, showed only five per cent of members supplied to central government and a mere seven per cent to government agencies and quangos, while 27 per cent supplied local government.

It has been estimated that central government procurement spend is at £166 billion. The Government has said that it wants to ensure that 25 per cent of all new contracts will go to small firms, which will provide billions in value to the small business sector.

The Government has begun to take steps to achieve this target and has announced that it is to overhaul the way that small firms will be able to compete for public sector contracts, through cutting red tape and being more open and transparent. Its plans include putting all Government contracts worth more than £10,000 on a single portal website which means that firms will be able to see what’s available and bid for the work.

Furthermore, the Government is also looking at making bidding easier, through the simplification and in some cases removal of the pre-qualification questionnaire (PQQ). These are two of the main issues that small businesses face when bidding for work, but we would not want to see a more time-consuming system put in its place.  Competitive procurement plays an important role in community sustainability and offering public sector contracts locally makes good economic, business and environmental sense, which is why it is imperative that across the UK, local government also adopts these measures.

However, there are still issues which need to be addressed.  For example, the current trend towards larger consolidated contracts makes it difficult for small businesses to compete, even when they could provide some of those services just as efficiently if they were broken down into smaller lots.  Similarly the need to demonstrate compliance with numerous burdensome conditions, such as accreditations and excessive financial guarantees before a contract has a chance of been won is a far greater problem to small businesses than it is for larger firms with dedicated procurement handling teams.

The FSB is pleased that the Government has recognised that these barriers exist and has committed to making the process simpler. The initiatives, such as the reform of the PQQ process and more transparency through the new contracts website, as well as providing a dedicated voice for small businesses’ views to be heard, will mean more small firms having the potential to access work. However, for the majority of small businesses, contracts will still come through local government and other parts of the public sector and it is imperative that the initiatives announced are also adopted more widely.



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Written by John Walker   
Thursday, 03 March 2011 00:00
Last Updated on Thursday, 24 March 2011 15:29
 

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