SME suppliers pushed out of deals

9 February 2010

9 February 2010 | Helen Gilbert

Small and medium-sized construction firms are being “squeezed out” of UK public sector contracts.

This was the conclusion of a poll of more than 600 SME contractors, which discovered more than one-third (36 per cent) had been less successful at winning public sector tenders over the past two years than previously.

The National Federation of Builders (NFB) research also showed that publicly funded work, as a percentage of each firm’s turnover, had fallen 32 per cent over the past five years.

Demanding administration processes and procurement frameworks were cited as major barriers.

A total of 16 per cent of businesses claimed local authorities and other publicly funded bodies do not advertise tenders properly and more than 60 per cent of firms said they were unsuccessful at securing a place on a procurement framework.

More than a quarter of contractors failed at the pre-qualification questionnaire (PQQ) stage of the tender process, while more than one-fifth said they spent four weeks a year completing administration tasks for PQQs.

The figures come just weeks after the government launched a free online service to help small suppliers secure business.

NFB chief executive Julia Evans said: “Locally based, smaller contractors can often provide much better value for money than larger firms through lower operating costs.”

David Pollock, group CEO of the Electrical Contractors’ Association, added: “The public sector remains a treasure trove of opportunity for contractors, but there needs to be much better communication throughout the tendering process.”

* See the next issue of SM, out on 18 February, for advice on how you can make deals easier for SMEs to access.

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