Small suppliers don't compete for government contracts

14 October 2008
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15 October 2008 | Jake Kanter

More than three-quarters of small businesses "rarely" or "never" bid on public sector contracts, a study has revealed.

The survey of 500 SMEs by the Federation of Small Businesses (FSB) found 70 per cent do not regularly compete for government business. Some 55 per cent said this is because they are not able to complete tendering processes without investing too many resources.

The respondents also argued there is a lack of responsiveness from public sector buyers and too much formality in the procurement process. In addition, 51 per cent of the businesses said they could not compete because they were not made aware of contract opportunities.

John Wright, national chairman of the FSB, said: "Small businesses should be made aware of the practical steps they need to take to improve their bids. But without government support, small businesses are put at a disadvantage. We need to see actions implemented so we can ensure SMEs are represented fairly when tendering for government contracts."

The organisation added small suppliers could make an important contribution to the economy during a financial crisis. "The current economic climate requires businesses that can adapt to change rapidly, an area in which SMEs are adept."



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