ESPO, the UK's leading public sector procurement organisation has announced that over three-quarters (76%) of the contracts it now awards are made to small and medium-sized enterprises (SMEs).
This is a rise of 21% in just three years and comes as a result of ESPO stepping up supplier engagement to encourage more SMEs to bid for tenders. By bidding, private companies can become regular suppliers to ESPO's frameworks, through which public bodies across the country procure items ranging from classroom stationery supplies to highway de-icing salt.
Having recognised the many benefits that SMEs can bring to its supplier base, ESPO has worked directly with the business community to help break down some of the perceptions that prevent them from getting involved in the tender process.
ESPO's research found that it's common for SMEs to feel overwhelmed by the tender process, and often consider it to be steeped in red tape or that they lack the time and resources needed to commit to the tender process.
David Kwiatek, head of commercial at ESPO said: "We have recognised the advantages that SMEs can bring to the supply chain, including diversity, local knowledge, an innovative approach and a contribution to CSR. We are therefore keen to encourage more SMEs to bid for our tenders.
"We've worked hard to address many of the misunderstandings or perceptions that discourage SMEs from bidding for tenders. These include dispelling the myth that only big firms win tenders and simplifying the tendering process itself. We are delighted that the steps that we have taken have obviously paid off and in the past two years we've seen such a significant increase in SMEs being awarded places on our frameworks."
The initiatives that ESPO has successfully adopted to encourage wider SME engagement in the tender process include:
- Standardisation of all tender documents making them more concise and easier to fulfil.
- Where possible, ESPO breaks down requirements into smaller Lots based on geographic areas making it possible for SMEs who don't have the capacity for national provision to break into the market locally.
- ESPO has introduced a new risk-based approach for the assessment of supplier's financial standing so that SMEs and start-ups are not put off or disadvantaged by the level of financial detail or audited accounts that are required under frameworks.
- ESPO also takes a risk-managed approach when it comes to insurance, setting levels proportionate to risk. Where a supplier doesn't already have the required level of cover they can just ‘top up' their existing cover and it can be priced into their bid.
- ESPO has joined forces with local authorities to enable electronic tendering through a shared portal. This offers an easier route for private sector suppliers to access tenders, and once registered, suppliers are alerted to new opportunities.
- Debriefing suppliers on why their bid has been unsuccessful is also important to help SMEs understand how they can improve their tender submission next time.
With over 30 years' experience in public sector procurement, ESPO has specialist buying teams with expertise in providing high quality procurement solutions to the government and its partner organisations on a nationwide basis. It works with a strong and diverse supply chain to deliver best value procurement solutions.
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