Guest blog: What are the barriers for SMEs when bidding for government contracts?
Guest blog from Andrew Hawkins, Public Sector Lead at Zaizi, on our recent annual GovTech SME Survey.
Recently, TechUK published its seventh annual GovTech SME Survey, analysing the opinions of 100 SME members on a range of topics.
The key takeout from the survey was that SMEs operating in the public sector continue to face challenges.
- 50.9% believe there is a lack of early industry engagement,
- 52.6% said there were too many procurement frameworks
- 68.4% felt there is a risk-averse culture within the civil service.
- 76% of respondents said addressing social value in contracts is an administrative burden.
Overall, only 27% feel government is helping small companies break into the public sector, while 92% don't think it understands how small businesses can meet its needs.
Amongst its five recommendations for government to improve its relationship with SMEs, Tech UK said it wants more pre-procurement engagement and support on the social value question.
To level the playing field against larger competitors, it also suggested fewer frameworks and advocated the appointment of a ministerial SME champion to better understand the needs of SMEs.
Here are my thoughts on some of the themes from the survey.
A lack of early industry engagement
Based on my experience, early industry engagement happens in three ways. The first is no engagement, which leaves potential suppliers in the dark. The second is when engagement occurs but the information provided is too general and doesn't allow suppliers to determine if the opportunity is worth pursuing.
The third, and most effective form of engagement, is when clear and practical information is provided about what is needed as well as broader cultural and environmental elements of the client's requirements.
Pre-market engagement is very helpful when it’s done well and the buying organisation is committed to it. It saves us time because we can quickly determine if the opportunity is worth bidding on.
And for the ones we bid on, it gives us a better understanding of how to approach the project. The benefit to the buyer is the opportunity to get more innovative and better value proposals from a broader range of suppliers.
I have seen some great examples of pre-market engagement, for instance, from the Home Office. And more should be encouraged to do the same.
Too many procurement frameworks
The Digital Marketplace was a great tool that helped SMEs access more opportunities. The TechUK survey found that 59% of respondents believe it helped improve SME access to the marketplace.
But the portal was retired recently, much to the annoyance of many. The Crown Commercial Service (CCS) says it was closed because it is no longer fit for purpose but the move feels like a step backwards.
Generally, there are too many procurement frameworks, which can be difficult for small businesses to navigate.
You still get government organisations with their frameworks, meaning SMEs must submit separate applications for each. These applications are never as simple as you think and are onerous for SMEs with limited resources.
While some organisations may need their own frameworks due to their special requirements, I feel most opportunities can be put through existing CCS frameworks.
The risk-averse culture within the civil service
According to the survey, SMEs think the government is too afraid of taking risks, which makes it hard for smaller companies to get involved in the public sector market.
It’s true that during tough times, the government tends to go with larger suppliers because they feel it’s more secure. But we've found that showing evidence of our capabilities and following industry standards helps build confidence.
We're good at adopting basic capabilities and proving our skills. For example, we have certifications like ISO 27001 and cyber essentials, and we follow GDS/CDDO practices and other security and cloud standards. We’ve also won and delivered government projects that evidence our understanding of the complexities around security, delivery, and aligning with the public sector's culture. A recent example of that is the work we did with the Home Office.
As part of our growth trajectory, we’ll take on larger contracts between £10-20m. Although we've been successful in working with public sector clients — as we haven’t really seen too much of this risk-averse nature — it will be interesting to see if being an SME puts us at a disadvantage when it comes to these bigger projects.
Is the social value requirement too onerous?
New procurement measures were implemented in 2021 that require social value contributions to account for at least 10% of the overall assessment score.
While SMEs support social value objectives, some have found implementing the policy challenging. Larger companies have the capacity and financial resources to show more output regarding their social value work.
Small businesses can still perform well but it depends on how the government measures social value. Is it based on the quantity or the quality of the work?
Our responses to social value questions are strong and we score at the top end. Our focus isn't just on showing outcomes but also demonstrating our commitment to doing more in this area — something that’s baked into our values and mission.
But government organisations need to give guidance and practical examples to SMEs of what good social value looks like.
Andrew Hawkins is the Public Sector Lead at Zaizi, which works with public sector organisations to design, build and sustain user-centred and secure digital services. Find out more: https://www.zaizi.com/
Latest News from
The techUK Podcast - Look ahead to the next year in tech policy29/09/2023 12:25:00
It’s been a big year for tech already, with the growing prominence of AI to the creation of DSIT. techUK though is always interested in what comes next, so to accompany our relaunch of Policy Pulse, and with a general election on the horizon, we’ve asked influential voices across the UK tech sector what they think will be the big trends and stories in the UK tech sector in the next year.
Ofcom decides to enable licences in the mmWave spectrum29/09/2023 10:20:00
Ofcom has set out further detail for new licences of millimetre wave (mmWave) spectrum across the 26 GHz and 40 GHz bands, which will be available for new mobile technology, including 5G services. This policy update could deliver significant benefits to people and businesses in the UK. Ofcom's statement outlined significant improvements to wireless applications.
Adopt digital technology to drive forward net zero27/09/2023 15:15:00
Digital technology is embedded in our daily lives and in every sector. Playing their part, the construction and property sector are unlocking their net zero potential through the adoption of digital technology. Vital, given the built environment is responsible for around 40% of UK carbon emissions.
techUK response to parliamentary committee report into Media Bill27/09/2023 09:25:00
Greater balance needed to support PSBs while protecting innovation.
What the tech sector can expect from COP2826/09/2023 16:25:00
COP28 comes at a decisive moment for international climate action. This summer saw temperature records broken, and several floods and wildfires across the world.
Connected Britain 2023 showcases industry innovation and action towards the future of UK connectivity26/09/2023 11:25:00
This year’s Connected Britain at the ExCel was the place to be to network with leaders and industry stakeholders in the telecoms space.
Making AI work for Britain25/09/2023 11:25:00
techUK's latest report unveils the future of work in an AI-powered era.
Event insight: Using data to drive digital transformation – what can the public and private sector teach each other?25/09/2023 09:15:00
On 20 September, we were delighted to partner with techUK member dxw, to host a roundtable part of Leeds Digital Festival 2023, to discuss how can we use data to drive digital transformation in the public and private sectors.