Sunday, 26 June 2011

SMEs selling to Public sector- UK Government listens via Social media

According to an 'Urban' Dictionary on the web, ‘smeaze’ is a combination of sleaze and smut.

Fortunately the colloquial pronunciation of SMEs currently being used by Government officials that sounds so similar is not such a combination. (SME stands for Small ,Medium Sized Enterprises)

Six months ago, Prime Minister David Cameron and Francis Maude, the Minister for the Cabinet Office (MCO) announced reforms designed to further open-up the public sector marketplace to suppliers.

'Today, we are announcing big changes to the way government does business.

By that, I mean what I say: literally, the way it does business. The contracts it signs, the goods and services it purchases - and the way it purchases them. We need to make the system much more open, more competitive and transparent.It's about making our country less wasteful and more accountable.

It's about opening up opportunities to new, small organisations as well as the old, big ones.

It's about being more dynamic, in our economy, and in our public services.' 11th February 2011

The UK coalition government is putting considerable faith in growth derived by the private sector to pull the country out of its recession.

The Crown Commercial representative for Small Medium Enterprise( SMEs) Cabinet Office Stephen Allott addressed this year’s Public procurement Show 2011. (Pictured below speaking at the Guardian's Public Procurement Show 2011 in June)

SMEs now have a voice at the top table of Downing Street and Prime Minister Cameron’s ear.

( Indeed David Cameron wrote an inspiring letter to the Institute of Sales and Marketing Management for their BESMA awards ceremony. See link below)

The Government has set a target to public procurement of 25% of spending with SMEs.

A strategic dialogue is being developed between Government and SMEs. Through the No 10 Downing Street website they collected a vast number of responses to a request from small businesses on problems they encounter with Public Procurement.

Part of Mr Allott’s speech covered the “ Supplier Feedback Service” part of the Cabinet Office based in Norwich.

Also he reminded us that there are still the conduits of communication of our democracy through writing to our Member of parliament, the relevant Minister and Officials in Government.

As well as inbound feedback , Stephen Allott is engaging with Trade Associations as well as outbound conversations – talking to the market place.

'Buyer Days' have become part of No 10’s commitment with their Product Surgeries held by the seven main procurement divisions of central government e.g. “ Surgery Lite” and " Innovation Launch Pads such those held in Birmingham.

From April-July last year 351 submission have been heard from SMEs on ways Government could save the country money. More Launchpad Dragons’ Den styled surgeries are planned for the future.

SMEs can be more flexible than their bigger competitors, often quicker to react and can offer better pricing.

In Public Procurement they may still favour bigger suppliers for a number of reasons including;-
 Risk aversion
 Sales coverage of bigger sales team
 Inertia of incumbency
 Reduction in Procurement capacity- less time for ‘shopping’
 Loss of technical capacity

One fact raised by Stephen Allott at the Public Procurement Show 2011 did surprise me. He emphasised how Social media is being used at the core of Government. On the no 10 Twitter site they received 1 ½ million replies.SMEs suggested the following remedies to UK Government to attract more SME bids .

1. More dialogue with procurement 80%
2. Less paperwork 80%
3. Supply documents at a later stage 74%
4. More free tender information 66%
5. Use of shortlist 58%
6. More time for tender submissions 50%
7. Bidder training 47%
8. Smaller contracts 47%
9. Use of framework contracts 44%!/number10gov
( The official twitter channel for the Prime Minister's Office based at 10 Downing Street)

One of the ideas being seriously considered from these 'buyer open days' for SMEs included a proposal for a website for job seekers to find work increasing the likelihood of re-employment by 50%.

The EU have a definition for SMEs – companies with

Less than 10 employees with turnover less than € 2 million
10-49 employees with a turnover of between € 10 million
50-249 employees with a turnover of less than € 50 million

They must be autonomous and a subsidiary of a non EU parent company.

Much of Stephen Allott's presentation drew from the September 2010 report from the consultancy GAK ( 110 pages) “Evaluation of SMEs access. ( scroll down for link to get the pdf of this report) The UK did not always compare well to other members of the EU in terms of public sector contract value to SMEs.

The reasons of course are not totally straightforward since the type of buyer, the things purchased and tendering procedures including EMAT (Economically Most Advantageous Tender ) criteria could be seen to be biased towards the big players in UK public tenders. Stephen Allott suggested ways to improve the way public procurement could work with SMEs as well how Public Procurement could allow more SMEs to compete for such work.

SMEs have a contribution to Public Procurement in many ways.

To sum up Stephen Allott stressed that there is value to be had with SMEs. SMEs are an access into innovation and SMEs contribute to employment since 60% of the country's job creation comes from them.

Related Links:

Prime Minister, David Cameron's letter to the Institute of Sales & Marketing Management's BESMA awards dinner within the blog post on this link.

Other useful links on Selling to Public Sector ( Official Government and independent sites)
Contracts Finder Site – Find live opportunities to tender to Public Sector


Cabinet Office

Servicedesk to Cabinet office

Innovation Launch Pad

Example of one ministry site with guides for selling into it.
Suppliers guide for selling to HM Customs and Revenue

For SMEs and HM Revenue and Customs

IT business watchdog style site
Campaign4Change site ( IT and Public Sector)

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