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FSB calls for level playing field on public procurement

Wed 25 Apr 2012

Small and medium-sized enterprises (SMEs) need more opportunities to enter into contracts with public sector bodies, an official has stated.

According to Clive Davenport, chair of the trade and industry policy committee at the Federation of Small Businesses (FSB), councils in particular can play a big part in getting SMEs more involved in public procurement.

Writing in the Guardian, he said that by handing more contracts to local firms, they can help to stimulate sustainable growth in their regional economy.

Mr Davenport insisted he is not calling on public sector bodies to only trade with local companies if a better service can be secured in another part of Britain, particularly as SMEs often operate in more than one region.

However, he said his idea would help to put firms on a "level playing field" with their competitors elsewhere and give them "a fair and fighting chance" to expand in the future.

Mr Davenport acknowledged that progress on involving SMEs in central government procurement opportunities has been made in the last few months.

Therefore, he believes the same principle needs to be applied in other parts of the public sector so this development can be built on further.

He added that making the procurement process less bureaucratic would be one positive step to take, as many SMEs currently find the existing red tape "impenetrable".

Mr Davenport said the tendering process with the public sector is also very lengthy and costly, which again makes it inaccessible to many smaller companies.

Richard Tinham, commercial partner and procurement specialist at law firm Winckworth Sherwood, commented: "The change in policy and move towards SMEs over the past year or so has been encouraging.

"However, it is clear from speaking to various public sector bodies that a true turning point will only be achieved when commercial and procurement teams properly understand the extent to which their procurement strategy can impact on SMEs.

"It is important that contracts are not unduly onerous given the deliverables they provide for, that requirements are split into appropriate sized lots where that allows for services to be supplied on a more efficient basis by smaller entities with expert knowledge, and that the selection criteria and qualification requirements for any procurement are appropriate and proportionate to the work in hand."

Cabinet Office minister Francis Maude recently confirmed the coalition is on course to increase its direct spend with SMEs to £6 billion - up from £3 billion two years ago.

Speaking at the Procurex Conference in Birmingham last month, he said the changes that are being put in place are making it "much easier to do business with us".

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