'Simplify tender process to increase SME engagement'

12 September 2016

The percentage of contracts awarded to SMEs by a public sector consortium has risen to 76%, up from 55% three years ago.

ESPO is a buying organisation joint owned by six county councils across the East of England. It said it achieved the rise by increasing supplier engagement, simplifying tendering processes and encouraging SMEs to bid for tenders.

“We have recognised the advantages that SMEs can bring to the supply chain, including diversity, local knowledge, an innovative approach and a contribution to CSR,” said David Kwiatek, head of commercial at ESPO.

The Federation of Small Businesses (FSB), whose procurement charter ESPO adopted, estimates 63p out of every £1 spent with an SME is re-spent in the local area, compared to just 40p for larger businesses.

In order to encourage smaller companies to bid for public contracts ESPO said it introduced a series of new processes, including the standardisation and simplification of all tender documents.

Where possible, ESPO said it break down tender requirements into smaller geographical lots to appeal to local suppliers, and has introduced electronic tendering through a portal shared with local authorities.

ESPO has also changed the way it assesses financial risk and the amount of financial data it requires, so as not to disadvantage SMEs and start-ups.

“We’ve worked hard to address many of the misunderstandings or perceptions that discourage SMEs from bidding for tenders. These include dispelling the myth that only big firms win tenders and simplifying the tendering process itself,” said Kwiatek.

“The steps that we have taken have obviously paid off and in the past two years we’ve seen such a significant increase in SMEs being awarded places on our frameworks.”

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