Jason Kay, CEO of LiveLead focuses our thoughts on public procurement and ponders if this is the forgotten lead generation tool
It’s often said that there are more SMEs these days than ever before. If stats are to be believed, then there are more than 5.9 million in the UK, which make up 99% of businesses. In this day and age, it could be argued that there is a real barrier to progress when it comes to those millions of businesses taking advantage of the opportunities that are available through public procurement.
SMEs
Do SMEs need guidance to be able to apply for such contracts? Sure, but do they really have to be dragged, kicking and screaming into what can be an incredibly lucrative world? With such opportunities often meaning a guaranteed income for fixed amounts of time, it is sometimes baffling as someone who occupies this particular niche that more is not done to welcome or encourage SMEs to at least investigate this arena more.
The tender process, by its very nature, is something that can drain so much talent, skills and valuable time that many SMEs must wince when they consider the risk versus reward factor involved. This reluctance is understadable. Few things can be more stressful. An average tender can run to hundreds of pages of form-filling, tedious administrative information and having to reference multiple documents to justify the cost and scope of work that is being carried out.
Public sector
Many of the public sector tenders out there are over complex without good reason. Those who work within the sector will remind you that compliance, responsibility and the multiple strands of the supply chain require the often arduous process to be as detailed as it is. But often this is far from the case.
From personal experience of running tenders for the public sector, it is sometimes astonishing how little interest there is. One tender that I was personally involved with which was seeking out sole trader electricians had no response whatsoever, despite a requisite amount of financial recompense on the table.
So where have we gone wrong?
Are tenders too much trouble for most businesses to engage with at all, or have we reached an apex where the reputation of a tender process is such that most businesses simply don’t think of them as a valid revenue stream or source of new business?
To compound this culture further, there is another barrier in the way. Buyers tend to group spend together into bigger pots these days to capitalise on economies of scale, these pots are then tendered as frameworks. This is completely understandable from both sides of the coin as we will always expect public money to be spent in the most cost-effective way. However, this doesn’t help SMEs get involved in the process or be encouraged to engage. When frameworks go wrong, the cost to re-procure can also be sizeable.
Dynamic Procurement Systems (DPSs)
One solution is to use Dynamic Procurement Systems (DPSs) as they are much more flexible than frameworks and are the more modern equivalent of the traditional “approved suppliers lists”. The way to encourage more involvement in the procurement process is to make it easier and these electronic, more open-market ways of entering the process should be applauded, however, they are still often very complex and the benefits to the SME are rarely promoted. More organisations are however using them, and it is to their credit.
There is also a massive difference in the capability of kind of disjointed approach is what led us to create our public sector buyers with no programme of continuous improvement in place. The benefits of continuous improvement is another article altogether, but its importance to the procurement profession should never be underestimated.
Regulation
Something else that could well be addressed by the industry, in general, is that although public sector procurement is heavily regulated by the Public Contract Regulations 2015, there is very little policing of those involved in the process. To illustrate this, in a recent study it has been revealed that only around 30% of tenders were published on the government’s own tender portal despite the fact that the use of this is mandated in the regulations.
The advertisement or lack of tenders is also an issue and is one that often prevents them from being found at all. Across various sectors such as healthcare, construction, education and social housing, there are hundreds of different independent websites which only advertise tenders for their own organisation. This vision of the future of procurement, where all types of opportunities for SME’s can be found in one place. The procurement process has been over complicated for a long time, and it doesn’t need to be difficult.
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