10th April 2018 was a big day for small businesses with a string of announcements from the Government aimed at helping SME’s win more business from the Public Sector.
Ministers for Small Business
The Prime Minister has mandated that each Central Government department shall have a Minister responsible for promoting the SME agenda. This significantly raises the profile of small businesses and confirms the Government’s commitment to hitting the target of 33% of public sector spend to be with SME’s by the end of 2022.
New procurement rules for large prime contracts
From 1st May 2018, any new Central Government procurement valued at over £5 million will include a new requirement. The winning prime contractor will be mandated to advertise all subcontracts on Contracts Finder thus making it much easier for SME’s to find out what subcontract opportunities are available.
Ian Fishwick, Innopsis Commercial Director is a member of the Cabinet Office SME Panel and is Chairman of the Contracts Finder working group. He commented,
“Roughly half of the ‘Public Sector’ contracts won by SME’s are as subcontractors to a large prime contractor rather than directly with a Government customer. The difficulty has been finding these contract opportunities.
Contracts Finder saw a record month in March 2018 with over 1.4 million page-views on the website https://www.gov.uk/contracts-finder. This is an 80% increase in the last 4 months (November 2017 saw 873,000 page-views).
A record number of tenders were advertised in March; 56,890. Unfortunately, none of the 56,890 tenders, were advertised by prime contractors. We have tried for over 2 years to persuade prime contractors to advertise their tenders on a voluntary basis, but, it clearly has not worked. We are delighted that the Government is now forcing prime contractors to advertise these subcontract opportunities.
We have already agreed with the Contracts Finder team at Crown Commercial Service that in 2018 we will prioritise the creation of new management information that will show clearly how many subcontract opportunities are being advertised on Contracts Finder. We need to ensure that this a policy initiative that does not get ignored. If the numbers do not show a rapid improvement, then, we will be knocking on the door of the minister.
New consultation on excluding large suppliers with poor payment records
10th April also saw the launch of a new consultation on potentially excluding suppliers from major government procurements if they cannot demonstrate fair and effective payment practices with their subcontractors.
The new Prompt Payment Policy has been effective in ensuring Government departments pay promptly because they produce statistics to show how quickly they pay suppliers. No Government department wants to produce statistics to show they are bad payers. Once again, we have a situation where, ‘what you measure is what you get’. We haven’t had the same success yet with prime contractors.
The consultation will also consider allowing subcontractors to have greater access to buying authorities to report poor payment performance. It is currently difficult for a subcontractor that is being treated unfairly to complain to the end customer.