SUMMER 2019 PROCUREMENT HITTING THE TARGET Smaller businesses are still not getting their fair share of public sector contracts, so what can be done to redress the balance? The UK public sector spends more than £200bn a year on procurement of goods and services from third parties, but far too little of this is spent with small firms. Only 23 per cent of small and medium-sized enterprises (SMEs) worked for the public sector, according to a report from the Federation of Small Businesses (FSB). Its research also shows that the number of SMEs expressing an interest in competing for public sector contracts has fallen by 10 per cent. This suggests the government has work to do to reach its target of increasing procurement spend with SMEs to 33% by 2020. Studies have shown that for every £1 spent with an SME, 63p is re-spent in the local area, compared with 40p in every £1 spent with a larger business. The FSB is working with local authorities across the West Midlands to make it easier for small firms to bid for, and win, the smaller contracts. It has helped councils to create pre-qualification questionnaires (PQQs) more suitable to small businesses and to break down large main contracts into smaller ones. It also wants to encourage the formation of cluster groups, where local authorities bring together small firms to strengthen their chances of bidding for and winning large contracts. The FSB also wants local authorities to lower their public liability levels and staff academic qualifications for smaller contracts, rather than taking a blanket approach of, say, £10m of indemnity and NVQ Level III or above. In addition, it wants councils and government bodies to: n Ensure contracts worth more than £10,000 are published on the Contracts Finder portal n Offer prompt payment within 30 days or less, and ensure prime contractors pass on the payment terms by building this into their contracts n Give unsuccessful suppliers useful and timely feedback on their tender applications n Take account of third-party accreditations a firm has, rather than insisting that all bidders are registered with a specific body n Host tender support activities, including training and workshops, to help potential suppliers understand the process and bid effectively. Three huge opportunities for businesses across the Midlands are the high-speed rail link HS2, the Commonwealth Games 2022, and Heathrow airport’s expansion. ‘The government has work to do to reach its target of increasing procurement spend with SMEs to 33% by 2020’ BIDDING ADVICE FOR SMES: n Do your research and maintain active networks n Know your supply chain and where you fit in n Register on relevant portals n Assess the PQQ requirements well in advance of the bid stage n Be ‘bid ready’, so you can respond as soon as opportunities appear n Attend ‘meet the buyer’ events and ‘bid ready’ workshops n Formulate a strong ‘About My Company’ statement Credit: Karen Woolley, development manager for FSB Image: iStock / manopjk HS2: Tier 1 contractors must use CompeteFor to advertise opportunities for suppliers and cascade this down through their supply chains. HS2 also has various direct corporate opportunities, which tend to be lower in value, but more numerous, and include: recruitment consultants; courier services; training support; and asset management. Commonwealth Games 2022 (Birmingham): The FSB has a seat on the Games’ procurement board and is working to ensure smaller firms can take advantage of the opportunities presented by this international event. It is also working with Birmingham City, Sandwell and Coventry City councils to ensure any ancillary contracts are pushed out to small firms. Heathrow: The airport’s expansion will involve a £16bn procurement exercise to build the runway and associated works. Heathrow is again taking its ‘SME meet-the-buyer’ summits on the road, and will be in Nottingham on Friday 14 June and Stoke-on-Trent on Thursday 7 November. These summits offer businesses a chance to meet and trade with Heathrow’s top suppliers. Before attempting to bid for larger-scale projects such as these, it is essential to familiarise yourself with the type of information that will be required, such as: n Company registration(s), track record, key employees, staff, finances and references n Professional standing n Insurances n Health & safety, environmental and quality management n Approach to responsible procurement n Policies including equality, diversity & inclusion, and modern slavery n Education, employment and skills n Sustainability, innovation and collaboration This is not an exhaustive list and more information can be found on the FSB website. For further information, please contact your local Trading Standards Service