Serving over 2 Million visitors each year

Search
Comprehensive Online Business Insurance
Tailored PI, Office, Public & Employers' Liability Insurance
Are you covered? Read our Essential PI Guide
Get a Quote and buy online in minutes

Unfair public sector procurement process stacks odds against leading entrepreneurs

print  e-mail 

More than three-quarters (76 per cent) of the UK’s entrepreneurs of small to medium businesses feel that the process of applying for public sector contracts is unfair, according to research conducted for the Tenon Forum. The research also shows that practice confirms this negative impression, with 85 per cent of those that have actually applied for a public sector contract finding the odds stacked against them.

Key elements of public sector procurement which contribute to the negative impression are the Byzantine application process - which is very time and labour intensive - the inexperience of the bureaucrats managing it, and the suspicion that decisions are already fixed before companies are invited to tender.

The bi-annual research, conducted by GfK NOP on Tenon’s behalf, questioned managing directors, financial directors and senior directors of 600 small and medium-sized entrepreneurial businesses for analysis by the Tenon Forum, an independent think-tank of entrepreneurs.

Adrian Rutter, Director of Government and Public Sector Services at Tenon, said:

"While these contracts can provide a crucial, staple income to a growing business, entrepreneurs need to think very carefully before incurring the expense and jumping through all the hoops required to secure them. There are entrepreneurs whose specialist focus is on public sector contracts and winning more of them. They are very successful at applying for the contracts and running them but these clients have recognised the long-term value of public work and made the resource required available. Half-hearted efforts are likely to flounder."
The research found that the UK’s youngest and smallest businesses have the biggest difficulty applying for public sector contracts. 81 per cent of businesses with between five and nine employees felt that the application process excludes smaller businesses because of the paperwork and man-hours involved, while marginally less (68 per cent) of the larger businesses, with workforces of 200 to 499 employees, felt the same.

Adrian continued,

"The processes involved in public sector procurement require a mass of resource, so it’s no wonder that particularly small companies, where time is such a valuable asset, often feel excluded."
European Business Solutions (EBS) provides practical business services to companies from the Nordic region entering and operating in the UK. EBS’ Managing Director, Martin Williams, has experienced the full range of emotions that the application processes provoke. EBS client companies have won and lost public sector contract applications and he now makes carefully considered, informed decisions on a case-by-case basis regarding whether or not they are worth expending a company’s energy on.

Martin Williams, Managing Director of EBS, said:

"We were overjoyed when our clients win public sector contracts but there is no doubting that companies can waste a huge amount of very valuable time on something that by the very nature of the process often leads to nothing."
"Experience has taught us a few of the tricks often employed by contracting organisations and we now know when it’s best to refuse to pitch. For example, public organisations have to prove that any contract awarded has been won competitively and this means that even if the contractor knows exactly who is best for the job, they still have to invite other organisations to pitch. When we receive invitations to pitch with just two weeks notice, we suspect we’re only being invited to make up the numbers. In this situation we often decline the invitation."
"The public sector is staffed mostly by honest people trying to do a good job. To force them to go through a tendering process when they have already identified the most suitable supplier is a waste of both their time and the contractors’. There has to be a better way, particularly for smaller projects."

Posted February 1, 2007
Latest articles in Latest News
 
One in three graduates plan to work for themselves
New research suggests that the lack of traditional opportunities available to university leavers has led to a significant proportion of graduates planning to go it alone. [July 29, 2010]
 
Business angels use gut instinct when choosing investments
New research has shown that Angels Investors (high net worth individuals who invest money and knowledge into companies who require funding) mainly follow their intuition ahead of financial calculations when deciding whether to invest in a company. [July 26, 2010]
 
Small business confidence "still fragile"
A recent survey suggests that business confidence has declined over the second quarter of 2010, suggesting that the recovery remains fragile and more efforts should be made to encourage private sector growth. [July 23, 2010]
 
Limited company formations rise following two year slump
The number of new companies has started to rise again following two years of steep falls caused by the banking crisis, according to a Top 25 accountancy firm. [July 13, 2010]
 
Number of business insolvencies down over 10%
The latest PwC analysis into corporate insolvency numbers shows that the effect of the downturn on UK business is showing more signs of easing. 3,467 companies became insolvent in the second quarter of 2010. [July 7, 2010]
 
Vince Cable heads up new committee to slash red tape for small businesses
Vince Cable has chaired the first meeting of a new tough Cabinet committee, tasked with the job of slashing the amount of red tape small businesses have to deal with. [July 5, 2010]
 
Small businesses warned to expect public sector contract cuts
Companies who have contracts with the public sector are being urged by the ICAEW to prepare for possible cuts. Includes a contract review checklist for small companies who may be affected. [June 7, 2010]
 
Most entrepreneurs expect to increase number of employees in 2010
New research has revealed the important role Britain’s leading entrepreneurs will play in helping to offset the inevitable job losses which will take place in the public sector over the next few years. [May 21, 2010]
 
Coalition unveils plans to cut red tape and encourage small businesses
The new coalition government has unveiled a more comprehensive summary of its "programme for government", which contains many plans which could benefit the UK's small businesses. [May 20, 2010]
 
Cutting the UK's budget deficit the key priority for small business owners
Two major surveys show that small businesses are overwhelmingly in favour of making tackling the UK's budget deficit the key priority for the new government. [May 19, 2010]
 
Entrepreneurs 'pessimistic' about the outlook for businesses in 2010
The UK’s entrepreneurs are pessimistic about the business outlook for 2010, and scathing of the Government’s efforts to drive small business growth, according to a new study. [May 7, 2010]
 
Most small companies think UK tax system is too complex
The vast majority of the UK's small companies feel that the current tax system it too complex, and would like to see it simplified, according to a major survey of over 2,000 business owners. [May 4, 2010]
 
Most people none the wiser about party tax policies ahead of election
Although 43% of UK citizens believe that tax will play the biggest role in the upcoming general election, over 80% feel they have little or no real understanding of the main parties' tax policies. [April 27, 2010]
 
Most small companies not planning for post-recession recovery
Research from The Open University Business School has revealed that only one in nine small firms are implementing post-recession recovery plans. These firms are also the most optimistic about their immediate prospects. [April 15, 2010]
 
Larger 'Time to Pay' agreements will cost on average £42,500 says accountant
The average cost for the Independent Business Review needed for larger “time to pay” agreements is estimated to be £42,500, according to a leading accountancy firm. [April 9, 2010]
 



Click Here


Our Partners
Key Services
Key Services
Useful Guides
Archived News

© Bytestart Limited 2005-2010 - All Rights Reserved | Terms of Use | Site List | Website Feeds | Rss Feed RSS Feed

Business Insurance, Business Bank Accounts, Public Liability Insurance, Professional Indemnity, Startups, Limited Company, Sole Trader