Will small businesses ever get a slice of government spending?

Wednesday, February 16, 2011 12:00

Government helping small businessA few days ago the office of the Prime Minister sent a letter to many small businesses and SME organisations explaining that a new online tool called Contracts Finder has been launched that will show all government tender opportunities.

At the same time he said they would eliminate the prequalification questionnaire (PQQ) for low value orders and standardise it so it was filled in just once for all other procurements.

Additionally there would be “Dragons Den” type surgeries where people with innovative products and services will be able to come and pitch to government – rather than waiting for the right tender to be issued.

All good news generally. For years the conditions set by procurements have excluded, or been unfairly weighed against smaller businesses applying for tenders. The cost of doing so is also proportionally higher for a small company than a large one.

Some people have commented that they are worried that eliminating the PQQ will create a “free for all” and that companies that stood no chance would waste their time bidding.

Well in an open market that can happen, but if in fact getting rid of the PQQ doesn’t change at all the size of company winning a tender, what was the point? There probably is still a culture in government procurement that only larger companies should win and just getting rid of prequalifying is not enough, attitudes must also change. I’ll wait and see on this one.

However, the Contracts Finder could be very good news indeed. There are some government tender sites out there (a couple charge for their use), but having one simple and easy to use central site for all tenders is a godsend. Much saving of time and hopefully it will make sure we don’t miss any relevant opportunities ever again.

Now on to the “Dragons Den” surgeries. They are not quite as the description implies, because you are not pitching for investment or funds, but for the chance to sell your innovative product or service.

The surgeries are going to be managed by Stephen Allott as a new Crown Commercial Representative (CCR) for SMEs. You will pitch to “a panel of senior procurement and operational professionals from central government and the wider public sector”.

I like this idea a lot, but the proof will be how many get taken up and what hoops they will have to jump through.

In the early days of Company Partners I approached a government figure to offer our business partner matching service to assist people who wanted to start a business. You would think that encouraging new start-ups by finding them a like minded partner to start up with was an obvious benefit to the economy.

The feedback was positive, but I would have to talk to the regional development agency, they in turn insisted I talk to a local Business Link and so it died. They also wanted me to trial it locally for 2 years and if it was successful they would put it out to tender.

Herein lays a problem. If at one of these surgeries, a young company puts forward an innovative idea for a service, will the government support them and place an order, or will there be endless jumping through hoops, or worse (in order of course to be fair and impartial) they put the service suggested up to open tender, effectively stealing the small company’s idea and giving it to someone else?

There is optimism for the general direction that the government is going on this, but let’s see if it actually produces a change.


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12 Responses to “Will small businesses ever get a slice of government spending?”

  1. lawrence says:

    February 18th, 2011 at 9:16 am

    As a follow-up to this blog, I’ve been getting the new Contracts Finder information coming through by email (easy to set up), but most are already fulfilled and the contract is just there “for transparency”. A bit like when you are searching on an estate agents site and it only bringing up houses that are already under offer.


    It would be good to have a tick box to exclude these.

  2. Stephen says:

    February 20th, 2011 at 8:53 pm

    If what is said above is true… Whats the point of having another quango that cost the Tax payer money?!
    Secondly If this Quango is going to be run properly, will there be representatives for each county available in each area of the country.
     I.e. as a person that has had to struggle with unemployment issues for a year after sending out tens of thousands of pounds to get a degree without LEA funding & self funding my degree,  I cant afford to send money on Hotel fees and travel to London From Cornwall, and the hope of getting a shoe string funding agreement. My idea of a business is a sustainable ideology that would help to employ graduates like myself and has support from potential clients for the business that would make it a sustainable business, but without the funding for IT and software, I am unable to take the Idea to the next level of the business, to be compatible with other established firms. My question is, ” were is the Government to support ideologies that would be sustainable if given a bit of help?! In question, investing in Equipment that is equally matched by the entrepreneur, lessing the Stacks of fraud and which would help along small business growth, reducing the number of unemployed, and unemployed graduates needing to develop their C.P.D.’s in becoming professionals, and gain the experience for market factors both for further employment opportunities and supporting small opportunities. Which if given the opportunities would become the backbone of certain area’s of private sector Markets. After all, isn’t that what the Government after all says they want to have happen; i.e.  were the Private sector is in growth and picks up the public sector slack?     

  3. Geof Jones says:

    February 22nd, 2011 at 6:35 pm

    A great idea – would be nice to see something like this work

    but if competefor – 2012 and all the other attempts is anything to go by – the government look after their own and NEVER care about SME’s

    this is just another form of government quango spin to stroke the SME’s but never feed them.,…

    One day, we will have an equal playground

  4. Nigel Weller says:

    February 23rd, 2011 at 12:30 am

    Providing the site for tenders is set up to assist those businesses looking for contracts in a practical way, this should, or could help SMEs. As to the pitching new ideas direct to government, this would be good if we could pitch for funding. Some boundaries would need to be set, such as Bank funding agreed to a certain level, but the business not able to move or start because of lack of funding. If it was pitching to a previous Banker and a governent official this could work, but the government would not produce such a simple concept.
    I am sorry to say that this government will make the right noises but nothing will change to help us the small business people to find investment. The EFG scheme is not suitable for lots of ideas and unless they change it to favour lots more startups, this country will have a very long slog to get out of the mess we are in.

  5. Michael says:

    February 23rd, 2011 at 9:02 am

    Surely it already exists in the form of OJEU. Also, does it replace the myriad local authority tender sites, which seem to exist only for the benefit of web developers and admin staff.

  6. Peter Woodward says:

    February 23rd, 2011 at 9:19 am

    The Local Authority tendering process doesn’t lend itself to small business that haven’t got 3 years audited accounts. This rules out many who have taken the brave step to start a business and would benefit greatly from a relationship with local government.
    Another point, visibility of works required up for tender is hard to acquire, the normal channels such as supply2.gov.uk exist but don’t really help start ups and fledgling businesses.
    Make it easier and free to see what is available on a National basis and actively promote tender applications for non-essential works from companies with less than 20 – 50 employees.

  7. David Yates says:

    February 23rd, 2011 at 9:54 am

    This offering is a reincarnation of the previous Supply2 offering run by BIP for the Government. On this one you don’t have to pay for leads outside your local Region. So who’s paying for the service at a time of Government stringency & will it be free in 12 months time?
    The limitation for users is that your personal profiling is next to useless in delivering leads to you in which you may have an interest & chance of winning. You have to do the sorting, then decipher the jargon before putting in a PQQ – and all the time you are running a business. You also can’t be certain that all the public funded leads are on the site (universities, arts, local government etc) Also the site offers no support community or network if you need people with other skills & experience for the bid.
    But it’s another resource to go with all the others.

    By the way, Supply2 & Contract Finder is funded by the Treasury who also fund the BusinessLink web site which means they will own the IP for the registration data. 

  8. Richard Masters says:

    February 23rd, 2011 at 9:59 am

    There is a basic problem but there is also a basic solution.

    The problem is that all those currently concerned within the various government agencies are walking along deeply rutted tracks created by “precedent” and those precedents have not ever taken small and start-up potentials into consideration.

    The basic solution is that all such tender possibilities should be graded so as to identify all of those business opportunities that will suit the small new potential provider.

    There will also need to be a re-think on the governments basic requirements for due diligence for the choosing of potential providers. (This task best given to those personnel outside the current set-up). Then these new requirements should be published and made public with the invitation to apply to be on an “approved list”. What remains is a simple matching exercise and an invitation to those matched for any specific requirement to tender. The tenders should be scrutinised and graded by a new group who have real experience in small business and they should then choose the top three for final approvel by the powers that be.

  9. Richard Gaunt says:

    February 23rd, 2011 at 12:09 pm

    We spent days, weeks, getting onto the DWP’s roster. It was a real struggle, but we celebrated our win. Five year’s work! Disillusionment quickly set in when time after time we failed to win tenders. Five years went, with not a single contract, and we declined to re-tender again. I know many other companies suffered a similar fate

    Trying to get local authority work is even worse. Our perception is that there is a well-connected local government mafia, and unless you are member you won’t get in. There are also a number of hurdles which small companies cannot really climb -accounts, ludicrous insurance requirements, previous work with a local authority, gender, environment and equal opportunities policies etc. The tendering websites are just for price checking, and to give the impression that this is an open market.
    I welcome the latest initiative, but the cynic in me says nothing will change.

  10. Philip Roberts says:

    February 23rd, 2011 at 12:14 pm

    The biggest danger I see in this is that owners/Managers will be distracted by the lure of ‘Government Contracts’.


    At the most recent Vistage open event just over a week ago, Speaker Tom Searcy spoke about ‘Whale Hunting – Landing big sales’ to 120 Business Owners/MDs and their colleagues. The messages were simple and blindingly obvious in retrospect:


    - Big companies (Government) buys from small companies because innovation happens in small organisations. They buy from big companies because it is ‘safe’ for the decision maker – especially so in Government where avoidance of risk is (generally) more important than ‘best solution’.
    - Big companies use small companies as free consultants, sucking ideas out of them and then using those ideas and the lower price to beat-up and then sign up again with the incumbent.
    - Small companies trying to land deals with big companies is like Texas 5 Card Holdem. – There are two winners in that form of poker, the Winner and the person that folds first. Incidentally the biggest loser is the (typically small company) that comes second having invested time, energy and emotion in the process.

    There was way too much content in the 3 hours or so of Tom’s workshop to repeat here, but a key takeaway for me and for the Members of the Vistage Group that I run in South Wales was the need to qualify the opportunities and quit the second the cards turn against you.

    For example, if you ask the question ‘how many times has this been tendered in the last x years and how many times have you changed suppliers?’ And the answer is 6 and none – you don’t have to be a rocket scientist to work out whether to fold and concentrate on other opportunities.

    However, if the response to number of tenders and number of changes is 1 and none then asking other questions like ‘Have you calculated the cost of changing suppliers and are you willing to share the information’ might be the right next question.

    If the answer is ‘No’ and ‘No’ – how likely is it that they are going to change suppliers?

    If the answer is ‘Yes’ and ‘£10,000′ then you have information to enable you to take an informed decision on whether to stay in the game a bit longer. If the contract is worth 20K and change cost 10K they aren’t going to change. If the contract is 1m and the change cost 10K then there is potential.

    What are your 3rd, 4th and 5th questions…


  11. Peter Dalton says:

    March 7th, 2011 at 11:28 am

    My experience is that unless local government puts out a tender for your product, there is no way of quoting, anyway.
    So if you have a new innovative product (by definition) it cannot be on a tender list, therefore you have no chance of quoting. I have been told (by Worcester Council) that it is a waste of time simply sending in a sample, product spec. and price, as no-one will look at it, as there will be no pre-existing demand, and no budget to cover it, anyway.

  12. zosia king says:

    May 8th, 2012 at 6:02 pm

    Regarding Contract Finder – are there any ‘low value tenders’ available? I don’t think so.It seems to me that the government contracts are in fact getting bigger – i.e. more products or services processed under one roof – not much hope for the small business. If any one knows a ‘way in’ into public sector sales without the red tape please advise.

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