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17 May 2023 | Comment | Article by Emily Powell

Spreading opportunities for SMEs part 1


The Procurement Bill (Bill) aims to create a simpler, more flexible and transparent set of rules to reduce barriers for businesses to enter public-sector supply-chains. In particular, this will benefit small and medium enterprises (SMEs) and Voluntary, Community and Social Enterprises, both of which face barriers under the current procurement regime to work with central government and the wider public sector. Under the new procurement rules, contracting authorities are obliged to have regard to the fact that SMEs may face particular barriers to participation and to consider whether those barriers can be reduced or removed.

We have produced a mini-series consisting of two blogs, of which this is the first, discussing the notable changes for SMEs which have been made to specific provisions. In this blog, we discuss contract pipelines, feedback requirements and a new procurement procedure.

Future contracts

The Bill provides for the creation of a central platform for the publication of prospective contracts in the following 18 months, mapped by region and category. This will provide greater accessibility and visibility to SMEs of any planned procurement in their area. The new rules aim to provide suppliers with a list of upcoming opportunities and give SMEs more time to gear up to deliver on those opportunities they decide to bid for.

Increased flexibility

The Bill introduces a new competitive flexible procedure under which a contracting authority can design its own procurement process. This should allow contracting authorities to design perhaps a more straightforward, simpler process for SMEs which is proportionate to the tendered requirement.

The Bill will also include a new “open framework” which will prevent small businesses being ‘locked out’ of the procurement process for long periods. This will be useful in less complex, transactional procurements and for SMEs with lower overheads that can compete on price.

Moreover, the Bill will prohibit contracting authorities from demanding pre-existing insurance policies relating to the performance of the contract before the supplier has secured the win. SMEs will no longer suffer unnecessary costs in obtaining insurance cover when there is no guarantee of securing the contract. The Bill will also allow SMEs to provide alternative evidence to prove their resilience where audited accounts are not available.

Feedback

The government identified in its white paper, The Procurement Bill – Benefits for Prospective Suppliers to the Public Sector, that a current complaint is that SMEs receive inconsistent or unconstructive feedback from unsuccessful bids via debrief letters. The Bill provides that under the new procurement rules, unsuccessful suppliers will receive an assessment summary which will explain how their bid compared to the winner. This maintenance of the requirement for contracting authorities to provide detailed feedback will ensure SMEs continue to have this knowledge for future bids and may assist SMEs in identifying areas for improvements.

Conclusion

The provisions discussed above should certainly make it easier for SMEs to bid for public contracts, providing more flexible and transparent provisions whilst reducing unnecessary costs for SMEs. Look out for our next blog which continues to explore other notable changes for SMEs under the Bill.

Our dedicated procurement reform page and webinar series has guidance for contracting authorities and relevant suppliers on:

  • understanding the changes in the law
  • what you need to know in order to be ready for the changes
  • how to procure effectively and lawfully once the changes are enacted and implemented.
find out more

Author bio

Emily is a partner in the Corporate and Commercial team. Emily specialises in commercial law, public procurement and subsidy control. Emily has advised housing associations on their procurement processes and can provide a complete legal service for all procurement and project requirements. Emily also hosts a forum for ‘heads of’ procurement working within the social housing sector.

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