Targeting SMEs should be encouraged, says public sector CPO

14 September 2011

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14 September 2011 | Angeline Albert   

Buyers should increase the use of SMEs where they can, says one purchasing chief.

Martin Blake, the corporate head of procurement at London Probation Trust has increased his organisation’s SME supply base but believes success in this area for most buying teams is limited.

Blake, who has a procurement team of four and an annual purchasing spend of £46 million, has succeeded in beating his 2010/11 SME engagement target.

His aim of ensuring SMEs make up 40 per cent of those participating in tenders was surpassed when 65 per cent did so. Additionally, some 62 per cent of those who won contracts were SMEs.

His team achieved this by simplifying tender documentation and contract terms (including placing less onus on liabilities) and the direct targeting of local suppliers through the websites of member organisations.

With services (such as alcohol treatment and mental health) to purchase that favour third sector SMEs, Blake said his task was easier than central government trying to buy a commodity such as electricity. “This method works well for directs, but indirects, especially commodities and utilities, can often be more challenging,” he said.

The achievement comes as the government’s Efficiency & Reform Group has been calling for more SME engagement, more local suppliers and greater efficiencies from public sector bodies.

Blake believes the ERG’s drive for the bigger and cheaper deals creates tensions for buyers who are encouraged to buy from frameworks, a path that “too often means only dealing with the big players”.

“There is an SME market when it comes to recruitment agencies and finding temporary workers. There are framework agreements available but that may not fit for the diversity and localism required.”         

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