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Small firms must have fairer chance sooner to win public contracts

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The Chancellor should bring forward plans designed to help more small businesses win government contracts in the Budget, the Forum of Private Business (FPB) has said.

The FPB wants to see the government fast-track measures outlined in the Glover Review, which aren’t due to come into effect 2010.

The 2008 Glover Review recommended removing barriers to public procurement, although stopped short of proposing that a minimum number of contracts to be awarded to small firms.

It did, however, call for greater transparency and simplicity to become central to the tendering process.

Giving small firms a better opportunity, now rather than next year, to pick up public sector contracts would stimulate the flagging economy by increasing competition for tenders, the FPB argued.

Matt Goodman, the FPB’s policy representative, commented: “We are hopefully at the beginning of the process of opening up more government contracts to smaller businesses, and it will take time before the review’s initial recommendations bear fruit.

“However, with the Prime Minister committed to pushing forward public investment projects, we want the government to act as quickly as possible to make sure that small businesses get their fair share of those contracts. That would help to save more small firms from closure and to provide a catalyst for economic recovery.”

The call from the FPB coincided with a new report published by the All-party Parliamentary Small Business Group (APPSBG).

According to the APPSBG report, the Glover Review’s proposals are a “step in the right direction” but are not enough by themselves to open up competition for government contracts.

The APPSBG concluded that the Glover proposals must involve all levels of government, beyond ‘core departmental buyers’.

Small businesses, it said, should not be viewed as a single group, and specific strategies need to be developed for the smallest firms to take account of their lack of resources.

Public authorities should set individual targets for contracts to be awarded to small businesses, focussing on ‘micro’ enterprises. The report said these targets should be ‘ambitious’ but not binding.

There also needs to be an improvement in access to information about public contracts, and the successor to the website should be less bureaucratic and better publicised.

Other recommendation included: keeping access to the tendering process as easy and inexpensive as possible; providing a single, pre-qualification questionnaire for bidders; removing unnecessary bureaucracy to save on time; introducing more innovative measures to reduce the perception of risk associated with small businesses; offering clear and constructive and clear feedback on unsuccessful bids; more training for public sector procurement professionals so they better understand small businesses; giving businesses advance knowledge of procurement opportunities; and setting up delivery terms and conditions better adapted to the needs of smaller suppliers.

Commenting on the report, David Frost, the director general of the British Chambers of Commerce, said: “This is yet another report that concludes how difficult it is for small firms to access public sector contracts.

“It is essential that the tendering process is made simpler and more cost-effective to enable greater SME access to the £175 billion of public money available. This is even more important in a recession when firms are looking for crucial revenue streams.”