Why small companies have trouble securing public sector contracts

   

Lloyd Sewell from Tendering for Contracts Training has provided a response to our recent article - 'small businesses still having trouble securing public sector contracts' - here.

A recent Parliamentary report shows that small businesses are still finding difficult to bid for public sector contracts, despite Government policies and attempts to intervene.

The report, released by the House of Commons All Party Parliamentary Small Business Group (APPSBG), recommends that many barriers still need to be removed to help SMEs win public sector contracts.

A major problem is not the fact that public sector agencies are preparing the pathways so that SME's find the process of tendering a lot easier – a recent survey conducted in the London area by Business Junction concluded that most SME’s do not tender for public sector contracts, their perception is that they will be unsuccessful and their time and resources would be better spent on pursuing activities which are less demanding and whose outcome is more within their grasp. (ref: London SME Survey conducted by Business Junction – March-2009)

Other major factors are the level of audit that public sector agencies have to undergo and the frequency of these audits, which SME’s might not be aware of.

Public sector agencies inadvertently award contracts to suppliers who take the time to get into system and find out how it works and (in most cases) provide goods/services/supplies that are of the required standard at the right price and at the right time and by so doing provide added value.

At the same time that public sector agencies are preparing to make the system more attractive (for use of a better word) SME’s also should show a commitment to take part in the system – by finding out ‘how the system of public procurement operates’ it is of no use just to complain about lack of entry while at the same time giving excuses as to why they do not take part.

Among the reasons for the audit is that - it is public money (collected in taxes - from the same SME's that do not take part) - that is being spent, these SME's fail to realise that the UK is part of the EU and that SME's in any part of the EU has the same right to submit a tender in response to an invitation to tender, just the same way as UK SME's.

If public sector agencies spent a lot of their time sorting out unsuitable tenders there would be an outcry on how much time and money is wasted on such a process from these same SME's.

SME's have a duty to find out 'how the system works and what is required to satisfy the requirements of the system', it is not a sustainable position to imagine that the government will somehow wave away EU or their own policy directives just because some SME's say 'I am not interested, it is too difficult and anyway I might not win the contract'.

The other fact is that all SME's need to allocate some time for training and personal and business development, which not only improve their chances of success but also all areas of their business activities – unfortunately training has been traditionally a sore point with most SME’s.

There is a process in all things and success only comes if and when you are fully prepared and competent enough to take part in the process.

About the Author

This response was written by Lloyd Sewell from Tendering for Contracts Training.

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