Small firms set out asks for Procurement Bill

FSB national chair Martin McTague said that while the new Procurement Bill could be a game changer for small businesses looking to tap into public procurement, it needs a key amendment that would benefit small businesses.

“A key amendment to this Bill could bring tremendous benefits to SMEs vying for public contracts: reversing the decision to scrap de-brief letters for unsuccessful bidders,” he said.

“This is a short-sighted decision that could have far-reaching consequences. Feedback is one of the only ways businesses can grow and improve — so without it, how can companies be expected to up their game? 

“That risks creating an imbalanced playing field, where the same companies win contracts repeatedly, while others continue to fall behind, resulting in an unfair system. 

“SMEs face a costly and confusing procurement process. Figures show that only one in five have tried to bid for a public sector contract in the last three years due to roadblocks — which is why the Government needs to go further to knock these down, to stimulate growth for both SMEs and the wider economy.”

Mr McTague said it was reassuring to see the government prioritise late payments by toughening up requirements for 30-day payment terms to small suppliers. 

“This ought to prevent a Carillion-style situation of hoarding taxpayer payments as fast as five days, and only to pay out at 130 days to the small suppliers who’ve completed the work,” he said.

“However, with over half of small businesses experiencing late payments in 2022, much of which is indirectly from central and local public expenditure, the Government must now go further and create a zero-tolerance approach. 

“We’re also pleased to see the requirement for suppliers to have pre-existing insurance before bidding on contracts has also been lifted. This means businesses will no longer have to make the costly commitment of taking out insurance policies before securing a win, creating a more accessible, streamlined process.  

“Small businesses would previously have had to show demanding evidence including cashflow and turnover — but the Bill relaxes this requirement, offering alternative methods for them to prove their resilience. 

“It’s pleasing to see the Government embrace our suggestions, striving to establish a system that’s both fair and adaptable.”