Innovation and Efficiency

Public sector procurement changes to help SMEs win business

The Government has published its consultation on making public sector procurement more accessible to SMEs – which could mean every public sector organisation having to use the same pre-qualification questionnaire as central Government.

The consultation document says: “SMEs have historically been shut out of government business and have found bidding for public sector contracts excessively, and sometimes prohibitively, bureaucratic, time-consuming and expensive.”

But in future, there will be a “simple and consistent approach to procurement across all public sector authorities so that SMEs can gain better and more direct access”.

The report praises action already being taken, and notes that the Federation of Small Businesses has found that 90% of councils are already helping SMEs. There are case studies about the good work done by Halton and Norfolk councils.

But it says the new reforms are aimed at bringing about a set of ‘single market’ principles, with the main changes being:

• Pre-Qualification: eliminating the use of PQQs for low value contracts, mandating a core PQQ with standard questions for high value contracts, and allowing suppliers to provide PQQ data only once.
• Transparency: ensuring all new contract opportunities and contract awards are advertised online and the public sector reports its performance on spend with SMEs and centrally negotiated deals.
• Payment and finance: ensuring contractors pay their suppliers on time; consideration of whether performance bonds can be an unnecessary barrier for SMEs, and encouraging the use of e-invoicing in the public sector.

The proposed reforms follow on from recommendations made in reports by Lord Young and Lord Heseltine earlier this year.

The central Government ‘core PQQ’, which it is proposing to use as the standard document for the whole public sector, can be seen at Annex B here, from page 20.

The new procurement guidelines do not apply to the commissioning of clinical services by healthcare commissioners.

The questions asked in the consultation document are:

Q1) What mechanisms and incentives would prevent contracting authorities from asking unnecessary and burdensome questions during the procurement process?

Q2) Should the core PQQ currently used in central government be adopted as standard across the public sector?

Q3) Which, if any, questions could be removed from the core PQQ? Are there any additional questions or relevant standards that should be included because they are essential to a specific sector (and please explain why they are essential)?

Q4) How would a single online platform for managing, submitting and verifying PQQ responses provide advantages to bidders and contracting authorities over and above the PQQ reforms already described? Would suppliers be prepared to pay a small fee for using this system (assuming the option of manually submitting a PQQ without any charge is also still available)?

Q5) Do you agree that all public procurement opportunities over £10,000 should be accessible from Contracts Finder? How can this be achieved simply and effectively? If you do not agree, why not?

Q6) Do you agree that all award notices for public contracts over £10,000 should be accessible from Contracts Finder? How can this be achieved simply and effectively? If you do not agree, why not?

Q7) Do you agree that all public bodies should publish data on their procurement spend with SMES in one place? How can this be achieved simply and effectively?

Q8) For Local Authorities, how can this work integrate with existing open data practices, such as the Code of Transparency, whilst minimising data reporting burdens? Are there similar issues in other sectors?

Q9) Do you agree that public bodies should publish data on their use of centrally negotiated deals, together with pricing data, to demonstrate value for money? How can this be achieved simply and effectively?

Q10) How can we ensure that standard payment terms are passed down through the supply chain for all public contracts?

Q11) Should public authorities and their supply chains publish performance data on their prompt payment to suppliers? How can this be achieved simply and effectively?

Q12) Do you consider that requirements for performance bonds are disproportionate and creating barriers for SMES aiming to win public contracts? How is this happening and what reforms could help alleviate this?

Q13) How can government increase the take-up of electronic invoicing in public procurement to maximise the opportunities it affords and create a more enabling environment for SMEs?

The deadline for responses to [email protected] is October 17, 2013.

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