With the recent publication of new procurement regulations, we take a look at how this will affect SMEs bidding for public sector contracts.
Part 1 will look at the background behind the changes, whilst Part 2 provides advice for taking advantage of the new regulations.
In a recently published paper current procurement regulations were said to have created a “golden age for SMEs”. With a record increase of over 700,000 new companies since 2010, it seems the market for small to medium businesses is definitely on the rise.
One of the key factors for business growth has been the gradual recovery of the UK economy. Chancellor George Osborne has stated that the deficit has halved since the 2010 election. With further falls forecast the UK economy is expected to continue along its path of growth.
More contracts for SMEs
A challenge was set in 2011 to award 25% of Government contracts to SMEs by 2015. To aide this, regulations were put into effect to encourage smaller firms to bid or contracts. These included:
- Launching start-up loans
- Providing access to more loan opportunities
- Cutting National Insurance contributions for SMEs
- Launch of the British Business Bank
With all this in place the Government was proud to announce at the start of 2015, that the 25% had been beaten.
From 2013-14 26.1% of Government spending went to SMEs, which accounts for total contract values of £11.4bn.
2015 Improvements for SMEs
Lord Young, the Prime Minister’s Enterprise Advisor, has put together a report documenting the changes small businesses have faced over the past five years. The report aims to further improve the procurement landscape for SMEs.
The work entailed discussing the hurdles faced by small businesses when contracting, including too much red tape, complicated PQQs and tenders, lack of financing and lack of support.
The culmination of Lord Young’s report is the publication of The Public Contracts Regulations 2015, which came into force in February 2015.
In general the new legislation aims to create a more flexible and simple procurement process for small businesses – One that is transparent and allows companies to compete more effectively for public sector contracts. There is a reduction in red tape and an emphasis on Green Procurement and Innovation.
SMEs now have an even better chance of success when competing for government contracts.
For more detailed information on the changes and how to take advantage of the new regulations, see Part 2.