Figures from the Cabinet Office revealed at the end of last year showed that they had exceeded their target to spend at least 25 per cent of the government's procurement budget through SMEs by the end of 2015. The Conservative manifesto for the May General Election campaign committed them to increasing this spend to 33 per cent by 2020.
That would mean that at least £1 of every £3 spent by central government would be with SMEs, and as Cabinet Office Matt Hancock stated, it is indeed an ambitious target. But is it realistic?
Frameworks that work for SMEs
Innopsis worked very successfully with the Crown Commercial Service (CCS) on RM1045 Network Services Framework that resulted in more SMEs getting involved than the frameworks it replaced. Of the total 61 suppliers across the 10 lots of the framework, 31 per cent are SMEs and that is something to shout about.
But when you look beyond RM1045 and at other frameworks, there are still considerable hurdles for SMEs to overcome. The problem is not that SMEs bid for work and don't win. The problem is that they often don't bid at all.
So, what is it that stops SME' from bidding for public sector contracts and frameworks in particular?
Frameworks are often broken down into ‘lots'. These lots are effectively product areas e.g. mobile, wide area networks, IP telephony etc.
Traditionally there has then been a long list of products that need to be procured under that lot. Some of the items on the list are bought regularly; others rarely.
However there can be a simple killer statement that says something like, "You must be able to provide every item on this lot to be able to bid".
The longer the list of products, the more likely it is that there is at least one product that an SME supplier cannot provide and therefore they cannot bid. This is clearly wrong when a supplier can provide products for say 95 per cent of the projected spend.
Let's use an example to illustrate this - ‘top secret telephony'. This is a definite requirement for some voice contracts but it should not stop a supplier selling basic calls and lines that is the vast bulk of the requirement.
The concept of core and supplementary products
We listed a set of core products or requirements that would cover say 85 per cent of the projected spend on each ‘lot'. If a supplier could provide these core services then they could bid.
The other, say 15 per cent of projected spend, became known as supplementary products and it was optional as to whether a supplier provided them.
This simple concept reduces the chance of SMEs being eliminated from the bidding process right at the very start.
We're pleased to see that CCS has adopted this concept for the Network Services Framework and hope that a similar approach will be adopted in other categories of technology supply. If it does, then there is every reason the ambitious 33 per cent target will be met.
Ian Fishwick is SME director at public sector technology association Innopsis
Struggling security titan makes three board appointments after investor took 5.8 per cent stake last month
Commvault ousted its CEO in May and has since undergone a radical refocus
As employees demand more flexible working environments, CRN asks how the channel is adapting to the changing working landscape
Wall Street less than impressed with Oracle's growth as cloud numbers remain hidden