Local Authorities need to give more opportunities
to SMES
The need for SMEs to be given the opportunity to participate in larger scale projects
and procurement is becoming
increasingly recognised.
The OGC is currently carrying
out a review on the role of SMEs in public procurement.
The Chancellor of the Exchequer announced on 12 March 2008 in his budget speech
that he had asked Anne Glover, Chief Executive of Amadeus Capital Partners, to lead a committee to inquire into the barriers small firms face in winning contracts.
The aim is to reduce these barriers over the next 5 years and examine the practicality
of setting a goal for SMEs to win 30% of all public sector business. The call for
evidence is open until 8 August 2008 (further details can be found at http://www.ogc.gov.uk/SME_Consultation.asp).
Some local authorities have already begun to take steps to ensure that local businesses
have the opportunity to participate in public procurement opportunities. ICAM was
formed as an Islington and Camden organisation and started by assisting local businesses
in getting involved in the £800 million Arsenal development.
ICAM focused on researching and gathering information on the suppliers and traders
and forming directories on their findings. They then looked at who the buyers were;
contractors and private developers, main or framework contractors working with the
council, sub-contractors, Housing Associations, major employers etc. By identifying
the market ICAM was then able to approach all parties to ensure they worked together.
Tools such as buyer events, business briefings on major developments, E-bulletins,
directories, listing opportunities on website, tender alerts, case studies and project
literature, all encouraged SMEs to be become involvzed with the larger developers.
(for further details see http://www.icamsupply.co.uk/icamsupply/homePage.do)
One of the difficulties in increasing the involvement of SMEs in public procurement
is the lack of willingness of main contractors to work with them. One way around
this is to use community benefit clauses. The EU does not permit contracting authorities
to insist that contractors only procure supplies/services locally, as it would be
seen as geographical discrimination and would be uncompetitive and contrary to the
free movement of goods, works and services.
However, it is possible to include some sort of community benefit clause in contractual
documents – for example if a s106 agreement is used. Such an agreement could say
for example that a percentage of jobs must go to the long-term unemployed or new entrants to the labour market or people needing vocational training. This is not
contrary to EU rules as it is not restricting the free movement of workers and is
not saying that jobs must go to local people, although in practice many of those
applying for the jobs are going to be local. Another possible route could be for
the contracting authorities
to make the contractors legally bound to provide a certain
number of apprenticeships and training places.
"Responsible Procurement"
The GLA has been focusing on the idea of
‘responsible procurement’ to encourage the involvement of SMEs in public procurement.
This was initially referred to by the GLA as ‘sustainable procurement’ but was rebranded
‘responsible procurement’ in February 2008. Sustainability was often understood
to refer only to environmental issues, however Responsible Procurement aims to communicate
the importance of both social and environmental objects in ensuring best value in
procurement across the GLA Group.
The GLA has seven strands to their Responsible Procurement Policy:
1. Supplier Diversity
2. Community Benefits
3. Skills and Employment
4. Workforce Welfare
5. Fair Employment
6. Ethical Sourcing
7. Environmental Sustainability
Through this policy the GLA hopes to level the playing field and provide under-represented
businesses with the same opportunities to compete for contracts as other qualified
suppliers.
Europa also published some guidance on this area in November 2007 – “Evaluation
of SMEs Access to Public Procurement Markets in the EU.” (A copy of this report
can be viewed at: http://ec.europa.eu/enterprise/entrepreneurship/docs/SME_public_procurement_Report.pdf)
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For More Information Contact:
Matthew Wolton
TPP Law Limited
53 Great Suffolk Street
London SE1 ODB
t 020 7620 0888
f 020 7620 0778
e info@tpplaw.co.uk
Email:
Matthew
For a full printable version
of this article please
click here
To view further details on the call for evidence please
click here
For further details on SMEs becoming involved with the larger developers please
click here
Evalution of SMEs Access to Public Procurement Markets in the EU please
click here
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