Procurement job cuts have unintended consequences for SMEs

23 March 2012
Richard Tottman is a principal consultant at QinetiQ Commerce DecisionsI was with a government procurement representative recently. She happened to mention the reduction in procurement staff meant they were being encouraged to place contracts that encompassed more and more capability. This policy is to get them ready for yet more job losses. Simply put, if the number of contracts isn’t reduced the remaining staff will not be able to cope with the workload in the future.

But more capability means higher value contracts with more varied skills. So, where does this leave SMEs? The obvious answer is not as the tier one contractor. This is a shame, given the Governments aspiration to include more SMEs in the supply chain.

So what can the public sector do to compensate for this catch-22 situation? They can’t increase posts. They can’t place many small contracts. They cannot use frameworks because even they require the very resource that is being cut. Could they ensure sub-contacts are let for a certain percentage of the contract value (as appears to be the case here)? Can they encourage the SMEs to band together and pool resources, to offset risk etc? I would like to be able to say “time will tell”, but time is running out. An already stretched resource is trying extremely hard to ensure that vital services have some coverage, and they do not have the headroom to mentor the industry on collaboration. Small businesses will need to rely on the usual prime contactors to share the work. Let’s hope the slim pickings do not lead to famine. ☛ Richard Tottman is a principal consultant at QinetiQ Commerce Decisions 
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