Should size matter?

17 February 2011
Francis Maude’s statement that he is scrapping onerous pre-qualification questionnaires (PQQs) to help SMEs access more public sector contracts is welcome news. He announced a number of measures including no central government PQQs for contracts under £100,000 as well as the creation of SME product surgeries. Bias should not be part of any tendering process, especially where public funds are involved. The problem is not so much that many tenders are biased to big companies; more that they are biased against small ones. The issue is not so much the OJEU process or the European Union’s fault, but the interpretation and application of the regulations by the buyers. What is the point of a PQQ? It should be about filtering out suppliers who are not going to meet your needs and including those that can. The trouble is this invariably gets translated into ‘show us your policies for training, CSR, diversity, health and safety, accounts for the past five years’ and so on. Big companies have loads of material on this. However, many small, innovative companies – which might make an excellent supplier but may be a new business – don’t. It might seem incongruous, but the government’s desire to improve access to SMEs is fully supported by DHL, one of the world’s largest private sector companies, with over half a million employees. Why? Our experience in operating NHS Supply Chain for the past four years has been telling. We’ve integrated the PASA and NHS Logistics to create a commercial, customer-focused organisation. We’ve found that in order to create access for small, innovative businesses we’ve had to make life simple for them and for us. We’ve used ‘pilots’ as a way of getting their inventions into the NHS without needing to implement OJEU until we’ve seen if customers use them. We’ve also been ruthless in considering the questions we ask in our PQQs and tenders. We ask ourselves: what are we going to do with the answer to this question? Can we evaluate a supplier’s response? If we don’t know, we don’t ask. Additional government measures such as the ‘mystery shopper’ concept which invites challenges to poorly constructed tenders and the SME panel which aims to hold the government to account are steps in the right direction but they focus on what is being issued rather than how they can be better constructed in the first place. There is also to be an interchange programme to bring secondees from business into public sector procurement teams to transfer skills and provide civil servants with broader commercial experience. This is a positive step but we need more detail and it needs to start as soon as possible. Tendering processes can be very drawn out as a result of the level of scrutiny and compliance and anything which can be done to streamline this and produce quicker, more effective results must be implemented immediately. Roger West is head of procurement outsourcing, DHL Public Sector
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