Public sector advised to support small suppliers

The move follows publication this month of a report from the DTI, which concluded that smaller vendors often offer better service than larger ones. The study was carried out by research firm Nera Economic Consulting, which analysed 20 public sector projects, just under half of which were IT-related. The 122-page report entitled A Study of the Benefits of Public Sector Procurement from Small Businesses concludes that smaller suppliers are often more willing to “go the extra mile” and build strong relationships with customers.

John Dodgson of Nera said that smaller IT providers in particular also tend to offer highly innovative solutions. But Dodgson added that smaller suppliers commonly find procurement processes too complex and said more effort was needed to encourage their tenders. He said e-procurement portals could simplify bidding processes and are particularly suited to technology procurement because IT providers are usually happy to use such systems.

Such portals also provide a level playing field for smaller providers, according to Mike Davis of analyst company Butler Group. “They help ensure decisions are made on price and value, and are more accessible to smaller companies who often can’t afford to spend as much on marketing [as larger rivals],” he added.

Small business minister Alun Michael said in a statement that the public sector could get better value by considering smaller providers. “I urge local authorities to adopt improved procurement practices and encourage them to reap the benefits of a diverse supplier base,” he added.

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