Time to cut through bar­ri­ers

Ex­ec­u­tive must act to en­sure lo­cal firms win more pub­lic con­tracts

The Herald Business - - Professional Brief -

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

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