Prime Minister Declares Support for Public Sector Willing to Work With SMEs

In what has been described by some as a scathing attack on public sector procurement spending, David Cameron, PM, has declared that he wants to increase the amount of government work allocated to small-medium enterprises (SMEs) from 5% to 25% in order to make government buying more transparent and competitive.

The EU standardised definition of SME is described as ‘small’ being 11-50 employees and ‘medium’ being 51- 250 employees. Those companies employing less than 10 members of staff are termed ‘micro’.

In encouraging purchasers to look beyond the big suppliers, the Prime Minister said: “I understand your concerns. In the private sector there’s an old adage that no-one ever got fired for hiring IBM. When I was in the private sector I was responsible for contracting for a business I was working for and sometimes the big option seems like the safe option.
“But I want you to feel empowered and to know that as long as you follow the right channels I will stand by you if you take risks with young, new, dynamic companies. I want you to really feel you are playing your part in helping to turn the country around - in cutting the deficit, in boosting enterprise and growth, and in building the big society.”

Procurement for Housing is way ahead of the game when it comes to working with SMEs with well over 25% of its suppliers falling into this category. For example, Unimer, the largest non-profit making co-operative in the UK, facilitates the trading process between merchants and suppliers. Merchant Members of the Unimer Group act as nominated suppliers on five of the six Materials Agreements offered by PfH and to this end, account for 53% of the Materials Agreement’s total annual turnover. Unimer represents over 1000 Merchant Members trading from 3000 locations across the UK. Members include plumbers, electricians, roofers and decorators, all of whom sit firmly within the SME category.

All PfH’s Agreements are EU compliant: Each tender received is awarded points across a broad range of factors. The supplier(s) with the best value offer is awarded the contract.

RSLs must abide by EU public procurement laws and carry out EU compliant tenders where the value of the contract reaches a specified threshold. The EU compliant tendering process can be time consuming and expensive. However, PfH Members can avoid the process and the unnecessary cost, simply by using PfH agreements.

One major issue that SMEs face in this situation is their lack of procurement experience and knowledge. If you feel that more insight into Procurement might benefit any SMEs working with your organisation – perhaps they may gain from learning more effective tendering processes – please contact Foundations Training Manager, Chris Pratt on cpratt@procurementforhousing.co.uk