In Our Opinion

Public Sector contracts - "SMEs should not give up" say Wilson Henry

Winning a share of public procurement contracts might still be proving difficult for SMEs, according to the House of Commons All Party Parliamentary Small Business Group, but good preparation and planning can make a successful difference and SMEs should not turn their back on these opportunities.

Louise Baldock, Public Sector contract specialist at Wilson Henry Chartered Accountants and Business Advisors in Liverpool says "It is true that SMEs can be put off from bidding for public work because of all the paperwork and preparation where there is no guarantee of success. However, in the current financial climate, the public sector is an important avenue to explore for new work. There are things that small businesses can be doing to help themselves, and to improve their odds".

Essentially, if a firm wants to bid for public work, then it needs to be well organized and be prepared to invest some upfront time. It also need to positively answer the following questions:

1. Does it have the basic competencies to deliver the contract and the resource capacity to guarantee delivery?

2. Can it satisfy on the financial well being test? Is the balance sheet sufficiently robust to provide confidence that it can finance requirements?

3. Does it have all the policies and procedures in place that are likely to be required by the public sector? This might include things like an Equality and Diversity Policy which might be time-consuming to put together, but once produced should be a lasting document, requiring a periodic review - and the business is likely to benefit from having such a policy anyway.

4. Has it assessed the quality issues – can they deliver to the standards required?

5. Can they offer best value – which does not necessarily mean being the cheapest but viewed as the optimal choice for the purchasing body when taking account of service level guarantees, capacity, delivery, insurance etc. as well as price?

SMEs can prepare for pre-qualification by ensuring they can provide the information commonly requested. Again, this can be an initial lengthy investment process, getting together information about health and safety, insurances, social and environmental compliance, the firm's track record, references and so on. But once done, the same information can be provided for future tenders so it is worth putting the time into this.

Once prepared, SMEs need to put a system in place to ensure that they are aware of what contracts are currently being offered. The Government's Supply2Gov service is designed with the SME in mind, firms can sign up to receive automatic notification of any contracts that have been advertised in their line of work or in their geographical area. Wilson Henry is considered unique in offering a proactive contract search service to their clients, drawing their attention to potential work and helping them to prepare for prequalification. Wilson Henry trawls public contract notices every week to ensure its clients are not missing out.

SMEs could also benefit from working collaboratively in bidding for contracts. Perhaps a security firm might bid together with a firm of cleaners, and a firm of builders for a building maintenance contract for instance. If we can move to the position where small businesses do not feel limited by the extent of their own field but seek natural partnerships with complementary firms to bid for work, then SMEs consortia could lead the way in making the most of these opportunities.