New procurement rules set to be game changer for SMEs

New rules governing how the public sector can buy goods and services could be a potential game changer for SMEs, according to bid and tender writing specialist Ask the Chameleon.

On 24 February, the new Procurement Act is set to go live, with the aim of speeding up and simplifying public procurement processes.

It also places value for money at its heart, creating greater opportunities for small businesses and social enterprises to innovate public service delivery.

Rachel Hayward, who runs Ask the Chameleon, welcomes the introduction of the act and highlights the importance for many SMEs who had previously found the system overly cumbersome to navigate.

She specialises in producing exceptional funding and commercial procurement applications and business award submissions for micro, small businesses, and third sector organisations.

Since 2015, Ask the Chameleon has secured access to a total of £156.5 million in contracts, including £4.6 million in charitable funding.

Rachel said: “This is welcome legislation, which has been hotly anticipated for some time and is set to level the playing field for SMEs, as well as social enterprises and the voluntary sector.

“The Government and public bodies are the biggest purchasers of goods and services in the UK, but many small businesses have struggled to win contracts in the face of competition from much larger businesses.

“This legislation gives businesses a greater opportunity to expand their customer base, boost revenue and foster sustainable growth, which will lead to much-needed job creation.

“The act requires government agencies to set aside 33% of spend specifically for SMEs, which provides a fair chance to secure contracts that were previously dominated by larger corporations.

“As well as simplifying the procurement process, a key feature is that it will enable contracts to be split into smaller ‘lots’ – making it easier for small businesses and social enterprises to complete for and win more local authority contracts.

“The provision of the new Central Digital Platform offers greater simplicity for bidders to find published tender notices, as well as one location for commonly used information, reducing repetition and increasing efficiency during the procurement process.

“There is also increased emphasis on prompt payment. Under the new act, government entities are required to make payments within 30 days – ensuring that SMEs receive their dues in a timely manner.”

According to the act, small and medium-sized enterprises are those with fewer than 250 staff, and a turnover of an amount less than or equal to £44 million, or a balance sheet total of an amount less than or equal to £38 million.

Rachel said: “Although SMEs are the lifeblood of the economy, most do not have the capacity to bid for tenders to secure their own growth or do not feel they would be judged able to deliver public sector tenders.

“This will hopefully make the procurement system – particularly for local authority contracts – far more accessible and efficient for both councils and suppliers.”