Amanda Gee, Chair of the Thames Valley Berkshire LEP SME Action Group talks about what the LEP is doing to equip SMEs across Berkshire with a better understanding of Local Authority procurement processes and shares the common barriers that discourage SMEs from responding to tenders.
In the May 2010 Spending Review, the Coalition set out a programme of savings to be made throughout Government, including the renegotiation of contracts with major suppliers. With greater scrutiny of procurement spending and with rising Government and citizen demand for more agile, risk-averse, responsive and customer-focused service provision, it is becoming increasingly important for the public sector to challenge the assumption that ‘big is best’ when it comes to procurement contracting. Instead, it’s time that the public sector considers new and better ways of purchasing goods and services from SMEs.
As the Chair of the SME Action Group for Thames Valley Berkshire Local Enterprise Partnership, I was keen to work with Berkshire Unitary Authorities to look at how we can create a target percentage improvement of spend with local businesses. As part of this process I worked with RafiqChohan, managing director of Slough-based SME recruitment business, Goldteam, and together talked to the Chief Executives of each of the six Unitary Authorities in Berkshire to understand how local government procures and where in the supply chain an SME might be able to access opportunities.
Whilst the Chief Executives were keen to broaden their engagement with SMEs, the caveat was that the Unitary Authorities still have to be seen to be operating a fair, open and transparent process that represents best value for citizens. As a result we realised that there are still many barriers that discourage SMEs from responding to tenders or even lead them to avoid opportunities altogether. These include:
- Difficulties in obtaining information
- Lack of knowledge about tender procedures leading to errors
- Often the size of the contracts can be daunting
- Too short of a time span to prepare the proposal and a lack of resources
- The high cost of preparing the proposal (since many costs are fixed, SMEs face disproportionately high costs in comparison with larger enterprises)
- The need for policies and procedures to be embedded before SMEs can become suppliers (i.e. Health & Safety, Environmental, Quality and Diversity)
- Excessive administrative burdens
- Unclear jargon
- High qualification levels and required certification
- The need for financial guarantees
This prompted us to put together a series of free workshops, in conjunction with Improvement and Efficiency Social Enterprise (iESE), to equip SMEs with the expertise needed to properly tender for business. Our workshops will give SMEs of all sizes – from one man bands, to catering companies and cleaning businesses, right up to the large end of the SME market – a better and more thorough understanding of what they need to do in order to improve their chances of being awarded a contract. At the same time they will be able to decide whether these types of contracts are worth the time, energy and commitment required. They will also gain insight into what some of the common errors are and, more importantly, what a relationship with a public sector organisation might be like. While many SMEs might decide in the end that supplying the public sector is not for them, our workshops will help them determine whether it is right for their business rather than be excluded from the outset.
I am passionate about creating a level playing field for all businesses and I believe that if SMEs are able to bid for some of these contracts, not only will this stimulate our local economy, but it will also introduce healthier competition in the marketplace. In addition, SMEs are often innovators. Working with a greater number of SMEs will introduce more innovative thinking within the public sector – a win:win for all concerned.
The aim of Thames Valley Berkshire LEP is to grow the economy of the sub region in order to stimulate growth in the rest of the UK, and this is just one of the ways that we are coordinating economic development activities in Berkshire.
The Thames Valley Berkshire LEP SME ‘Seize the Opportunity’ procurement workshops will run from 15th to 17th July and are being held at FE colleges across Berkshire. To register for any of the evening workshops and for further information, visit http://freesmeworkshop.eventbrite.co.uk/