There is no contradiction between savings associated with the aggregation of public sector spend and SME engagement, a conference was told.
Stephen Allott, crown representative for SMEs in the Crown Commercial Service, told delegates he had "worried" about the issue when he was appointed.
Speaking at the Government Procurement Summit in London, he said: "I was wondering how on earth was I going to make sense of this policy when the bosses were saying economies of scale were the way to go."
He added: "I spent three or four years worrying about it."
However, Allott said savings of 75 per cent and even 90 per cent "are not uncommon" when SMEs are used instead of bigger firms. "There is no contradiction between SMEs and aggregation savings: it's going to be the route to deliver them," he said. "What SMEs can deliver are transformational savings."
Allott said research by the European Commission revealed the single biggest barrier to SME engagement was contract size. "Britain has pretty much the largest contract sizes in Europe and we have one of the smallest SME percentages," he said.
He welcomed the new EU directives which stipulate that contracts should be broken up into lots, but said the challenge was to know when to do this. "How do you know when to sub lot?" he said. "We are going to have to figure out the answer to this."
Allot also said the G-Cloud was the future. "If you want to know the future of procurement in government, it's the G-Cloud. On average, buyers through the G-Cloud are making savings of 50 per cent. It's compliant by default," he said.