On 9 December 2013, the UK government published the outcome of its consultation on making public sector procurement more accessible to small and medium-sized enterprises (“SMEs”). It also published a guidance note “Small businesses: GREAT ambition”.
The consultation is an element of the government’s policy programme to implement its commitment to ensure that 25% of central government expenditure goes to SMEs by 2015.
In May 2013, Lord Young of Graffham, the Prime Minister's advisor on enterprise and small business, published a report on how the government might encourage more SMEs to bid in procurements. This report contained certain recommendations around simplifying the procurement process and providing a simple and consistent approach to procurement across all public sector agencies.
The government consulted on these recommendations in September 2013. The results of this consultation and the government’s proposals have now been published.
The government’s proposals
The government will introduce legislation on the following in 2014, with a view to making the procurement system simpler and more accessible to SMEs. The proposed legislative measures will include:
- abolishing Pre-Qualification Questionnaires (“PQQs”) for low value contracts;
- requiring the use of a standard core PQQ for high-value contracts and ensuring SME’s needs are taken into account in the design of procurement processes;
- making contract opportunities easier to find by making them all accessible on a single online portal; and
- mandating prompt payment terms all the way down a public procurement supply chain.
Further, it will require all public bodies to report their procurement spend on SMEs and their payment performance record in relation to SMEs.
Other than legislative measures, the government has said that, from early 2014, it will provide a new rating service called ‘Spotlight’ so that bidders can judge public bodies on their procurement credentials. Public bodies will also be able to rate their suppliers.
The government is also proposing to extend the reach of the Mystery Shopper, so that it not only investigates reports of unfair treatment, but also spot-checks public bodies to make sure that their procurement processes are SME friendly.
The government has said it will publish further details of these measures in due course.
These changes will no doubt be welcomed by SMEs, for whom the benefits of winning in procurement processes can often be outweighed by the onerous procedural requirements. Larger businesses too may benefit from the streamlining of procurement processes run by UK public bodies. The impact these changes will have on the proportion of SMEs winning government tenders, though, remains to be seen.