Government is delivering on SME-friendly rhetoric

Public sector is finally matching rhetoric when it comes to SME access to contracts, according to Innopsis' Ian Fishwick

As the director of a trade association for public sector suppliers, I am often asked if I think the public sector is more open to a wider range of suppliers than ever.

On the face of it, the answer is a very straightforward yes. The public sector has come a long way from the days of the well-documented IT oligarchs and has delivered a more level playing field for companies of all sizes to capitalise on its estimated £16bn spend on IT. However, a simple 'yes' does not do justice to the extraordinary steps the government and industry have taken on their journey to open up and does not address those that still need to be taken to widen the portfolio of suppliers with which it works.

I have been a CEO for 25 years and the key thing I have learned is: what you measure is what you get and conversely, if you don't measure anything you won't get anything. That is a lesson the Tory government learned when it came to power in 2010. So when Francis Maude set a target of 25 per cent government spend to be with SMEs, it had no idea what the starting point was.

Maude's team talked to every major department in government and asked them to put formal plans together to discover how they thought they could reach that target. Before the May election, government proudly announced it had not only achieved, but exceeded its target – 26.1 per cent spend. And there is no doubt the government firmly believes in the value of using SME suppliers as its manifesto committed to a more ambitious target of 33 per cent within the next five years.

In February this year the Cabinet Office announced it was scrapping pre-qualification questionnaires (PQQ) on contracts under €200,000 (£143,000) across the public sector.

Tendering for public sector business as an SME can be an onerous affair that can take your most senior staff away from their normal responsibilities for several days, weeks and, at times, months. So the abolition of PQQs was welcomed.

The disaggregation of major contracts into technology "towers" and the wide-scale use of frameworks to separate buyer requirements into specific "Lots" has helped. Most recently Crown Commercial Services (CCS) showed real innovation in the Network Services Framework, RM1045. Consisting of 60 suppliers and 10 Lots, with more than 30 per cent SMEs, the new framework replaced the previous PSN Services and PSN Connectivity frameworks and now provides the public sector with an approved route for procuring connectivity solutions.

One of the key breakthroughs, resulting from close dialogue with industry through Innopsis, was the innovative agreement to structure the procurement Lots into core and supplementary products. The objective was to try to define the core products as the ones where the vast bulk of the revenue would be spent. So long as you could supply the core products, you would be allowed to bid. All supplementary products became optional.

Previously, the most common reason for SMEs not bidding was the requirement that they should be able to supply all products needed, no matter how little revenue would be spent on them. The longer the list of products, the more likely an SME could not supply at least one of them.

There is every indication from Sarah Hurrell (commercial director for technology at CCS) that forthcoming frameworks will build on the progress of RM1045 and look to introduce greater innovation into future frameworks, easing further still an SME's ability to participate. This is a good thing and we look forward to working with CCS on this.

In a bid to save costs further – on both the buy and supply side – we have undoubtedly witnessed a greater willingness of government to take advantage of commercially available technologies. However, there remains a tendency to buy commercial products with non-commercial terms and conditions, and these approaches are clearly incompatible. Take the telecoms industry, for example – invariably you are buying from a regulated entity and you have little ability to change those regulated SLAs. The government cannot choose to regulate an industry, set the SLAs and then try to amend those SLAs when buying from that entity.

This approach is also at odds with the government's own 33 per cent SME target. If specifications of a contract fall outside commercial enterprise services and SLAs, time is clearly needed to understand if modifications to terms and conditions can be made or alternative solutions created. This usually involves using a highly technical resource and also a legal resource. Legal consultation can be a prohibitively expensive luxury for most SMEs. Government and industry need to find a way that expedites procurement further and this will encourage greater SME participation.

A cautionary note for SMEs: be mindful of your responsibility to self-police. Commentators and media alike in the past have been quick to decry the award of large government contracts to yet another large organisation. There needs to be a degree of selectiveness from SMEs when responding to government tenders.

In the commercial world, I know I won't win a contract to deliver the wide area network for Lloyds Bank, for example; therefore, I don't bid. Similarly, I don't expect to win similar contracts at HMRC. No matter what parameters are put in place and what progress is made on procurement, there will always be a link between size and value of contract and winning bidder.

I am aware that in this article I have not addressed other key progress areas around the lessening of the security parameters and also the role of G-Cloud in opening up the market – heresy, I hear you say. But the arguments around increases in supplier numbers, record G-Cloud spend and limited spend with only a handful of suppliers are all well-trodden arguments. I also have not paid homage to the role of Stephen Allott, the Crown Commercial representative for SMEs and the Cabinet Office SME Advisory Panel which in short has at last given SMEs a voice at the top table.

Government is clearly committed to opening up the sector even further. The 33 per cent SME spend aim and the continued appetite from CCS to engage industry with a view to making procurement far more innovative is welcomed.

We wait with bated breath to see what impact George Osborne's Spending Review, due in September 2015, will have on the public sector and the role technology will no doubt have in helping the sector continue to transform.

Ian Fishwick is commercial director at Innopsis, the industry association for companies driving innovative information sharing for better public services