Public Procurement Reforms Will Help SMEs

Government reforms which make it easier for small firms to access public sector contracts have been welcomed by business groups.

The key changes, unveiled by Cabinet minister Francis Maude, include putting £50 billion of public sector contracts online to make it easier and faster for small firms to bid for work. Government departments will also be instructed to break contracts down into bite-sized chunks to encourage more small and medium-sized enterprises to get involved.

Most of the initial contracts set to go online are expected to be IT-related, with building and infrastructure projects following in April 2012.

Maude also pledged to speed up the time it takes to do business with Whitehall by 40 per cent. All but the most complex procurement processes would now be completed within four months starting from January next year, he said, compared to a current average of more than seven months.

According to the Cabinet Office, the package of reforms will open up the gateway to lucrative state-funded contracts worth around £230 billion a year. 

“We need to make things better for business in the UK ― the current system isn’t working. UK suppliers are finding themselves excluded, opportunities for growth are missed due to the public sector’s timidity and carrying out a procurement in the UK costs over twice as much as in France.”

Forum of Private Business chief executive Phil Orford said the measures would help provide “a vital source of new income for smaller firms”.

“Competing for public procurement contracts has traditionally been a complicated, time-consuming process, making it an unattractive, remote prospect for small business. Any reform which simplifies the procurement process, demands fewer man hours and less financial outlay is clearly welcome.”

Further details of how the changes are to be fleshed out are due to be announced in the Growth Review on November 29, alongside the Autumn Statement, a Cabinet Office spokesman said.

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