Winning government contracts
How the government aims to boost SME procurement by helping them find tenders, and win a bigger slice of government contracts.
Helping SMEs win more government procurement tenders
The government is committed to supporting small businesses and maximising value for money through procurement.
With £300 billion spent on government contracts each year, procurement accounts for 13% of UK GDP. Local Government and the Department of Health and Social Care are the biggest spending departments. In 2018-19, they were £77.6bn and £62.9bn, respectively.
Government tenders are a lucrative market for businesses, but many SMEs think they're only open to big companies. The government is working to change that, with every department having an SME action plan and a champion advocating for small business interests.
Despite the goal to increase spending with SMEs by 25%, only 10% of the procurement budget is directly spent with SMEs, as set out in a recent report, Access all Areas: Government. The government has simplified the tendering process, but bureaucracy and complexity still pose a challenge for SMEs.
To further improve procurement, the government must continue to streamline the process while still adhering to strict transparency and fairness guidelines. Plus, government organisations have to pay invoices within 30 days, making them a desirable partner for SMEs.
With £300 billion spent on government contracts each year, procurement accounts for 13% of UK GDP. Local Government and the Department of Health and Social Care are the biggest spending departments. In 2018-19, they were £77.6bn and £62.9bn, respectively.
Government tenders are a lucrative market for businesses, but many SMEs think they're only open to big companies. The government is working to change that, with every department having an SME action plan and a champion advocating for small business interests.
Despite the goal to increase spending with SMEs by 25%, only 10% of the procurement budget is directly spent with SMEs, as set out in a recent report, Access all Areas: Government. The government has simplified the tendering process, but bureaucracy and complexity still pose a challenge for SMEs.
To further improve procurement, the government must continue to streamline the process while still adhering to strict transparency and fairness guidelines. Plus, government organisations have to pay invoices within 30 days, making them a desirable partner for SMEs.
SMEs can struggle to find and access public procurement opportunities, and experience significant friction when engaging with e-procurement portals and tools
Transforming Public Procurement - how public procurement will change
SMEs can struggle to find and access public procurement opportunities, and experience significant friction when engaging with e-procurement portals and tools
Transforming Public Procurement - how public procurement will change
Four barriers to greater SME participation in government tenders
Awareness
Lack of access and awareness of government procurement opportunities
Capital
Lack of upfront capital and sufficient cashflow to overcome payment delays
Staff
Lack of staff capacity to manage the time-consuming tendering process
Technology
Lack of technology to meet cybersecurity and data privacy requirements
I think digital technologies have a huge role to play in reducing the processing time and the effort required, particularly for small value payments.
The Procurement Bill - transforming existing EU Procurement Rules
The Procurement Bill is designed to replace the current, rather bureaucratic, EU regime.
The Bill will:
Proper control and accountability for expenditure - rather than mirroring the four regimes that the EU has, the Bill will replace them with one single regime that will cover every type of procurement, from paperclips to tanks.
Cutting bureaucracy and driving innovation - there are currently over 350 complicated rules which govern public spending under the current system. Replacing these with fewer, simpler rules will reduce costs for businesses competing for the contracts (especially SMEs), but will also drive innovation, allowing buyers to match their procurement process to their specific needs.
Easier ability to transact with the government - The Bill will create one single digital platform where potential suppliers will need to register their details. These can then be used for all their bids. It will provide one central platform where suppliers can see all opportunities in one place. Along with prompt payment terms, this should help accelerate spending with SMEs, a key government aim.
Greater transparency and efficiency - The Bill will make it easier to identify and exclude suppliers who have previously underperformed, and will create a 'debarment register' listing companies who should be excluded from new contracts. It will allow buyers to take account of national priorities such as job creation, supplier resilience and access for SMEs. In times of national crisis, it will introduce new competitive processes for buying, whilst ensuring the ability to act at speed, and will allow a greater focus on security, by excluding suppliers on national security grounds.
The Bill will apply to the contracting authorities across England, Wales and Northern Ireland. The Scottish government will retain its own regulations, having transposed the EU Directives into their own statute book.
Having been already introduced to Parliament, the Bill will take several months to complete its passage there. There will then be a minimum of 6 months' notice before the legislation goes live, which will not be before 2023 at the earliest.
For a summary guide, and to keep up with the progress of the bill, you can follow the link to the government website here.
The Bill will:
- Create a simpler, more flexible commercial system suited to our needs and meeting our international obligations
- Open up procurement to new entrants, especially small businesses
- Embed transparency throughout the commercial lifecycle, ensuring proper scrutiny
Proper control and accountability for expenditure - rather than mirroring the four regimes that the EU has, the Bill will replace them with one single regime that will cover every type of procurement, from paperclips to tanks.
Cutting bureaucracy and driving innovation - there are currently over 350 complicated rules which govern public spending under the current system. Replacing these with fewer, simpler rules will reduce costs for businesses competing for the contracts (especially SMEs), but will also drive innovation, allowing buyers to match their procurement process to their specific needs.
Easier ability to transact with the government - The Bill will create one single digital platform where potential suppliers will need to register their details. These can then be used for all their bids. It will provide one central platform where suppliers can see all opportunities in one place. Along with prompt payment terms, this should help accelerate spending with SMEs, a key government aim.
Greater transparency and efficiency - The Bill will make it easier to identify and exclude suppliers who have previously underperformed, and will create a 'debarment register' listing companies who should be excluded from new contracts. It will allow buyers to take account of national priorities such as job creation, supplier resilience and access for SMEs. In times of national crisis, it will introduce new competitive processes for buying, whilst ensuring the ability to act at speed, and will allow a greater focus on security, by excluding suppliers on national security grounds.
The Bill will apply to the contracting authorities across England, Wales and Northern Ireland. The Scottish government will retain its own regulations, having transposed the EU Directives into their own statute book.
Having been already introduced to Parliament, the Bill will take several months to complete its passage there. There will then be a minimum of 6 months' notice before the legislation goes live, which will not be before 2023 at the earliest.
For a summary guide, and to keep up with the progress of the bill, you can follow the link to the government website here.
Key government procurement sites
Contracts Finder
The government's online Contracts Finder helps companies find a tender they can potentially bid for. It provides searchable information about all contracts with a value greater than £10,000.
You can use the Contracts Finder to:
You can use the Contracts Finder to:
- search for contracts across different sectors
- find out what is coming up in the future
- look up the details of previous tenders and contracts
Small and Medium Business Hub
The Small and Medium Business Hub sits within the Cabinet Office. It is designed to showcase how the different departments within government are committed to improving access for SMEs to government procurement contracts.
The Hub provides links to the individual Departmental SME Action Plans across government and to the wide range of other resources designed to help SMEs.
Crown Commercial Service
The Crown Commercial Service (CCS) is the government's centralised organisation charged with:
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managing the procurement of goods and services across government
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ensuring maximum value for the taxpayer
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improving the quality of service delivery for common goods and services
They work with over 17,000 customer organisations and work with more than 5,000 suppliers.
Crown Commercial Service SME Action Plan
In order to meet their commitment to obtain value for money and support SMEs through procurement, the CCS has set out an action plan designed to identify and overcome the barriers SMEs face.
Find a Tender service for high value contracts
It is estimated that over 30% of all contract tenders are high value (usually above £118,000). Use this service to apply for high value contracts.
Other dedicated public sector procurement sites
SME Selling to Government Guide
This guide, written by the Cabinet Office, is designed to open up more procurement opportunities for SMEs by providing them with all the information, tools, and tips to become more successful when bidding for government contracts.
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