Small firms to have greater access to public sector IT contracts

Fordway response budget statement

Response to Alistair Darling budget announcement re: additional support to SMEs in public sector IT supply

As the MD of an SME that supplies ICT infrastructure to the public sector I heartily welcome this move from the government, but as I'm sure others agree, I would like to see the details. Previous experience of announcements such as this suggests the reality is never as impressive as the hype.

Firstly, there is the question of defining an SME, particularly for IT suppliers. The majority of resellers and integrators are smaller organisations with less than 100 staff. In a recent framework we were accredited under some of the organisations included in the SME classification are still what I consider major players.

I also believe that the public sector tendering process needs to be reassessed. Creating a credible tender, even for sub-£1 million projects, can be incredibly daunting and costly for true SMEs. For example, we spent over 200 hours, the majority senior management time, at a cost of more than £30,000 to the business on our last public sector tender. While this was a worthwhile exercise for us, thankfully we won the tender, other less financially robust companies can be put off at this first hurdle, despite them potentially being the worthwhile choices for the work.

I do understand that risk mitigation and supplier continuity are very important factors for the public sector but the government cannot expect to benefit from the savings, commitment and flexibility of smaller, specialist suppliers without creating a more realistic set of selection criteria.

Can a company with a turnover of less than £10 million, whose primary waste is paper and packaging, really be expected to have ISO14001 accreditation and pay for £10 million of professional indemnity insurance to be considered for a tender worth £100,000?

Unless the budget announcement also includes revised guidelines on assessing supplier suitability, which I have not seen any evidence of, I believe the current criteria are not about assessing the suitability of a business but are arbitrary demands to protect the status quo, some of which rule out most true SMEs and potential new suppliers to the public sector.

Richard Blanford
Managing Director
Fordway
Ends

Posted by: Richard Blanford  19 Mar 2008