Buyers under pressure to tender in the 'fastest, cheapest way'

17 September 2020

The Welsh Government should undertake a “fresh start to procurement policy” with a focus on tackling barriers for SMEs, according to the Federation of Small Businesses (FSB).

In a report FSB Wales highlighted barriers to SMEs in public sector procurement, including accessibility to bidding, lack of public procurement resources and collaboration.

FSB Wales said the next Welsh government’s procurement policy should focus on good value for the taxpayer, marketplace competition, growth of SMEs, full transparency, and accessibility to all firms. 

The report outlined barriers including an under-resourced procurement profession, a lack of statutory underpinning and political imperative, and poor data and spend analysis. 

Research by FSB Wales found 60% of SMEs said there were barriers to bidding for public contracts, and 28% said they didn’t feel able to compete with large suppliers.

FSB Wales said procurement was less likely to carry out costly processes that enable “SME-friendly tenders”, such as extra auditing, as financial constraints have “severely curtailed” delivery of best practices. Therefore procurement professionals are under pressure to tender in the “fastest, cheapest way”.

Ben Francis, policy chair at FSB Wales, said: “We want to see procurement contracts broken down into smaller chunks that are accessible to SMEs, but this can’t be done when the only objective is to get procurement contracts out of the door as quickly as possible.” 

While procurement “undoubtedly” remains a political priority, emphasis on its importance varies across institutions and large public sector employers such as the DVLA and NHS. 

Economic development needs to be assisted through foreign investment into the development of “Wales-based” supply chains, with the explicit aim of ‘market making’ opportunities, FSB Wales said.

“If we are to maximise the economic impact of spending we must understand better where spending currently goes and what size of firms are benefiting from that spend,” said the report.

“FSB Wales would like to see spend analysis being included in some form of statutory guidance and included on a publicly-available dashboard – an approach recently introduced in the Scottish Government procurement reform legislation.”

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