Time to cut through barriers
Executive must act to ensure local firms win more public contracts
AFTER years of being hidden away in our public sector organisations, the issue of procurement is suddenly big news. And so it should be. With £8bn being spent on goods and services, it is essential that proper systems are put in place to ensure best value for the users and funders of public services.
It is also essential that more is done to enable small businesses based in Scotland to bid for this work: 99% of all Scottish businesses have fewer than 250 employees; 93% have fewer than ten, so any artificial barriers that prevent small firms bidding for work will mean less competition, higher prices and poorer service. Excluding SMEs holds back economic growth, as large foreign companies currently capture much of the value of Scotland’s procurement spending.
But changes to procurement are on the way. Published earlier this year, the McClelland report will have huge implications for the way public sector bodies purchase commodities and services.
The new requirement to advertise all public sector contracts is opening up opportunities to small firms, when previously they couldn’t find out about many tenders.
We now want speedy delivery of a national website where all Scottish contracts are advertised, and adoption of McClelland’s Suppliers’ Charter, which guarantees a proper feedback session for any firm bidding for work but coming up short during the tender process.
The report should also reduce the amount of time taken to tender, with public sector buyers now committed to using a shortened and standardised pre-qualifying questionnaire. This should stop the practice of repeatedly requesting the same huge quantities of information from the same businesses every time they tender for work. That’s a waste of time.
We also want more protection for firms that are badly treated by buying organisations. I hear regularly from businesses that weren’t given time to tender, or were given inaccurate tender specs, and even from businesses that are given verbal instructions to start work which is then disputed when it comes to payment. How those processes get the best price or service for the buying authority I have no idea, and if these things were happening in my organisation, I’d want to know.
McClelland’s recommendation of a complaints process where small firms can report unfair treatment without prejudicing their chances of future work, is vital to improving professional practice across the public sector.
However, there are threats as well as opportunities from the report. It is inevitable that McClelland’s recommendations will result in local authorities and other organisations buying together to drive down prices and will result in aggregation of contracts in certain sectors and commodities, which will take work beyond the scale of most local businesses.
We want a commitment that this will only happen when the projected savings clearly outweigh the losses to local economies, and we want a commitment to helping small businesses work together to win larger contracts and secure a greater slice of this £8bn market. Only by doing this will we square the circle of ministers’ repeated pledges to open up the market to SMEs, while encouraging the bundling up of contracts in a way that makes it difficult for small firms to bid for them.
We might be approaching Christmas, but small firms don’t expect to be handed work on a plate; they know they can compete on price, quality and customer service if given a chance. And by allowing them to do so, we can make a huge contribution to the Executive’s goal of growing the economy, as well as guaranteeing a better deal for those who use and pay for public services.
Content supplied by Niall Stuart, head of press and parliamentary Affairs, FSB Scotland