Going free online boosts chances of winning public contracts

The Forum of Private Business (FPB) is advising small businesses to register online to improve their chances of procuring public contracts. Business-owners have been granted free access to the government website www.supply2.gov.uk, but only until 31st July. The FPB believes that, if the incentive paves the way for more small businesses competing for tenders, it should be made available to them indefinitely.
The website provides information on thousands of available public sector contracts valued at under £100,000. Free access to contracts across the UK for new registrants is being offered on a trial basis as part of the Department for Business, Enterprise and Regulatory Reform’s new Enterprise Strategy.
The FPB has been campaigning for the process of bidding for public contracts to be made more accessible to small businesses in order to boost competition and save taxpayers’ money. In the 2008 Budget, the government announced plans to award 30 per cent of all public contracts to small firms.
“One way of achieving the Government’s 30 per cent target is to better match the information about the contracts that are out there – particularly those at the lower end of the price range – with the small businesses that are eager to bid for them,” said the FPB’s Policy Representative, Matt Goodman. “If the trial is a success, and more small firms submit tenders for public work, the government should consider extending the incentive indefinitely, to give owners of small businesses a better chance to compete.
“This is only a small step in making public procurement more accessible to small firms. More needs to be done to reduce the considerable barriers they face, including the costly and time-consuming tendering process that is involved.”
Excluded from public procurement
In November 2007, a House of Commons Trade and Industry Select Committee’s inquiry found that, in addition to the complex processes involved, small firms are being excluded from public procurement because of a culture of risk-aversion and the inadequate training and professionalism of buyers, who often consider lowest price over best value when awarding contracts. The committee also blamed the government’s tendency to centralise purchasing and its use of framework contracts.
Research carried out by the FPB, in conjunction with the Small business Research Trust (SBRT) showed that nearly half of all the business-owners who responded had been put off bidding for public contracts, with 28 per cent of those blaming the complexity involved as the main reason, and a quarter citing the steep cost of buying into the application process.
High cost
Specifically, one in five blamed the high cost of registering to tender and the bureaucratic process. In addition, 14 per cent lacked the knowledge of where to find relevant information about bidding, 13 per cent believed that too much information about their businesses was required, and 12 per cent said they did not have enough time.
However, a third of the firms surveyed said they would consider bidding for work related to the 2012 Olympic Games.
Small businesses need support
Announcing the new online incentive, the Parliamentary under Secretary of State at the Department of Business, Enterprise and Regulatory Reform (BERR), Shriti Vadera, said that small businesses need support in order to grow and be able to bid successfully for public contracts, but admitted they are best placed to deliver value for money.
“Many smaller businesses are more innovative, have lower costs and present better value for taxpayers than larger firms,” she said. “Introducing Britain’s small firms to government procurement contracts online will provide opportunities to grow that they would not have otherwise found. Encouraging more small businesses to register for opportunities will mean buyers benefit from increased competition and access to a wider range of suppliers.”
Once the free trial is over, the previous system of allowing free access to view contract opportunities only in specific regions will be restored.
The FPB believes that extending the registration period, making it easier for small firms to tender for public contracts in the long-term, would hinder the cartels of large firms which engage in price fixing.
For example, FPB member ABA Consulting, with offices in Derby and Newcastle-Under-Lyme, has been frustrated in the past when applying for public contracts.
Managing Director, Alan Brough explained: “We’ve recently applied for a contract relating to Stoke-on-Trent’s regeneration, which is being managed by a publicly-funded body appointed by the government. We were chosen to be on the panel of short listed firms, but haven’t had any work out of it at all, and then you hear that they’re working with companies from London and elsewhere.
“There are all of these processes to go through, and I despair at it. I’m sure that the clients do as well, but these are the procedures they have to go through.”
Formed in 1977, The Forum of Private Business (FPB) campaigns on behalf of private businesses, representing approximately 25,000 UK-based companies, together employing in excess of 600,000 people.