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SMEs and the ‘contracts’ debate

Thursday November 10th, 2011

By Morven MacNeil, GO Content Editor

An interesting issue was raised recently in a House of Commons debate regarding small and medium-sized enterprises (SMEs) and whether there are ways to encourage local authorities to procure from them.

Oxford West and Abingdon MP Nicola Blackwood asked Cabinet Office Minister Francis Maude what steps he is taking to encourage local authorities to procure goods and services from SMEs.

Ms Blackwood said: “Local business tell me about how important it is that they have access to local government procurement contracts, but also about the difficulties they have navigating the very complicated local government procurement processes. The Government is taking some steps to help support local businesses to access central government procurement processes but could he say how his department has helped or can help open up local government procurement processes in the same way?”

Mr Maude responded: “My honourable friend raises a very important point. Indeed we’ve been working with the Local Government Association to try and free up procurement. Part of that is to ensure that transparency is there so we can see how the council is spending its money. And also I’m particularly grateful for the way we have been trying, along with the Local Government association, to demystify the European procurement regulations, which I certainly believe do allow local businesses to be able to bid.”

Mr Maude also said that, at an SME Strategic Supplier Summit held on 11 February, the Government announced a series of measures to make it easier for SMEs to compete for central government contracts.

Local authorities are responsible for their own procurement decisions, but many choose to follow central government policies and practices. Baroness Eaton, Chair of the Local Government Group, has signalled local government support for the measures the Government announced on 11 February, particularly the introduction of a shortened, simplified and standard set of core questions to be used in pre-qualification.

When asked for his thoughts on the matter, Senior PASS Consultant at BiP Solutions Eddie Regan highlighted that central government procurement is far more complex than local government procurement processes.

Speaking exclusively to GO, he said: “Nicola Blackwood raises a valid point. However, it is interesting to note that she appears to believe that somehow central government procurement is easier for small businesses. Nothing could be less true.

“The majority of central government contracts continue to be so large as to exclude not only small business, but even medium-sized businesses.

“Until the public sector starts to divide contracts into lots, regionalises certain contracts and also makes use of the small lots provision in the procurement regulations, the problems of entry to this market will remain.”

For further information on the EU Directives small lots value threshold, click here.

Related link

Council contracts are ‘complex’

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