Help small firms pitch for public contracts, says FSB

28 November 2008

The Federation of Small Businesses (FSB) has called on the government to implement the recommendations of a report on giving small firms a fairer opportunity to win public contracts.

The Glover review, which was set up by the Chancellor in this year’s Budget, has put forward proposals that would improve the access small firms have to government contracts, increase the channels of communication between government and small businesses, and simplify the process of winning public contracts.

However, the FSB went on to say that the measures needed to be more far-reaching if small businesses were to have a chance of winning a larger share of the £175 billion that is spent on public contracts each year.

Specifically, the FSB wants to see a limit set on the turnover of companies that can apply for Low Value tenders, excluding those with turnovers of more than £500,000.

There should be a lower burden of proof for SMEs bidding for Low Value tenders. And procurement managers should be encouraged to feel more confident in dealing with consortia of small and micro businesses, the FSB said.

The FSB pointed out that on average only 16 per cent of government contracts are awarded to small businesses.

Clive Davenport, the FSB’s trade and industry chairman, said: “The FSB welcomes the Glover review’s recommendations to reduce the barriers small firms experience when bidding for government contracts. Small businesses offer great value to our communities, especially in these difficult economic times, and by using small businesses, money is kept within the local economy.”

Mr Davenport added: “However, the recommendations could have gone further and will not be effective if they are not taken up by all levels within government. After a promising pre-Budget Report for small businesses, SMEs should not be ignored when bidding for public contracts. We want to see real solutions and the FSB will be holding the government to account on this one.”