SMEs can provide formidable USPs to procurement. But procurement first needs to take steps to support them in the tender process.
99 per cent of all businesses within the UK are small and medium enterprises (SMEs) – those companies which are made up of 250 employees or less.
At the end of 2015, the total number of companies this size in the UK stood at 5.4 million.
Recently, within public sector procurement, there has been a noticeable increase in the number of contracts awarded to SMEs. Given that SMEs have long since made up the majority figure of all businesses within the UK, it is interesting to see that only now are they being brought to the forefront of the bid and tender process.
Wave of Change
A recent study has shown that nearly three quarters of public sector procurement contracts have been awarded to smaller organisations. This is in contrast to a few years ago, where just over half of contracts were awarded to SMEs.
Historically, larger businesses have been able to gain competitive advantage on SMEs in the contract bidding wars. They have been able to provide extensive financial data, as well as time and money, to work through the complex tender processes.
However, the wave of change has arrived. Public sector organisations are helping make that tender process a lot easier in a bid to support local businesses. With less red tape, SMEs are able to provide an enhanced USP to procurement. This includes access to local products/services, innovation, ethical trading and overall a more competitive offering.
Simplifying the Procurement Process
Leading the way, some organisations have already begun by standardising tender documentation. They require less financial information about the company, and are setting up electronic portals to help make the process as efficient as possible.
All of this is in aid of simplifying that bid process for SMEs to encourage them to apply and succeed in winning contracts.
For procurement professionals, this simplification of the tender process not only supports local SMEs, but also helps to cut out inefficiencies in day-to-day procurement jobs.
When it comes to reviewing bids now, procure have less financial data to wade through, and a more comprehensive tender document to look over. Plus, taking advantage of technology is also helping save time and money.
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