Local Authorities and Opportunities for SMEs - the Outome of the Glover Review
November 2008 saw the publication of the Glover Review, looking into the opportunities
for Small and Medium Sized Enterprises (SMEs) participating in large scale projects.
The Review was commissioned by the Chancellor of the Exchequer and chaired by Anne
Glover CBE, Director of Amadeus Capital Partners. The Review, entitled “Accelerating
the SME economic engine: through transparent, simple and strategic procurement”,
issues recommendations to build on improving SME participation in public procurement.
The Consultation
The Glover Review is informed by a consultation involving both businesses and public
authorities, with over 13,000 responses received. The Review notes that UK public
procurement nationwide has an estimated value of £175 billion per annum, amounting
to approximately 13% of UK GDP, however, SMEs find that they have substantial difficulties
in competing with larger businesses in the public procurement market. The opinion
of the SMEs consulted was that the key issue for Government was to address the issues
of transparency, simplicity and making procurement strategic.
The consultation looked at the practicality of creating a target for SMEs to win
30% or more of all UK public procurement, although the view of the SMEs consulted
was that a goal of this nature is not necessary, if SMEs could compete on equal
terms with large firms. Public Authorities also believe that an “optimal level”
of procurement from SMEs should not be given as it would risk distorting the markets.
The Review concluded that although a target would be ineffective, it would be beneficial
to require the public sector to report on the value of contract spend with SMEs.
The Review considers that this monitoring would allow the Government to examine
the success of the measures used to improve SME access to public procurement, as
well as providing evidence for any future policy decisions.
The Recommendations
The Glover Review made twelve recommendations under the headings of “Transparency”,
“Simplicity”, “Strategic Improvement” and “Measurement” to improve SME participation
in public procurement. These recommendations are:
Transparency
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Contract opportunities above £20K across the public sector should be advertised
electronically with standard indicative contract value ranges. These advertisements
should be accessible through a single, free online portal. |
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Government should issue all tender documentation electronically by 2010. Businesses
should be permitted to tender electronically by 2010 and there should be no paper
only tenders after 2010. All tenders should be electronic by 2012. |
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Contract Awards naming the successful tenderer should be published online, in a
standard format within 48 days of the contract signature. This information should
be accessible via a single portal. |
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Tenders thought especially suitable to SMEs or consortia of SMEs should be flagged
as such by the procurer during the advertising process. The Government should provide
guidance for procuring authorities on assessing the contracts for flagging. The
guidance should be based on risk, value and market maturity. |
Simplicity
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Qualification criteria not specific to a sector should be standardised and incorporated
into prequalification questionnaires. This is to prevent unnecessary repetition
of submitting the same core information in different formats. |
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Procurers should give businesses the opportunity to provide details of all previous
relevant experience when bidding for contracts, rather than just public sector experience. |
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If procurers rely on a specific accreditation scheme or standard as part of the
prequalification of contract award, a flexible approach should be taken. There should
be an opportunity for businesses to provide evidence that they can meet the contract
requirements by reference to similar accreditations or standards that they may hold
– especially if those standards have been recognised or required by other public
sector procurers. |
Strategic Procurement
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Departments should use Innovation Procurement Plans to set
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how procurement aligns with their overall commercial strategy. This should encourage
innovation and give advance notice of long-term procurement plans. |
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Government should encourage wider use of outcome-based specifications across the
public sector, as a means of driving innovation. |
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Government should expect and enable prime contractors to
make sub-contracting opportunities accessible through a single, online portal. |
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Government should ensure that SMEs and other firms acting
as sub-contractors obtain contract conditions (including promptness of payment terms)
that are no worse than the main contractor. |
Measurement
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Central government departments should report annually on
the value of their contract spend with SMEs. This should create a reliable source
of data to be used to inform future policy and evaluate the recommendations in the
Review. |
Response to the Glover Review
The response to the Review appears positive.
The OGC notes that the Government has welcomed the Review’s findings. Furthermore,
the All Party Parliamentary Small Business Group has launched an inquiry to further examine SME participation in public procurement – with comments being welcomed on
the recommendations of the Review. It would seem that the need to create opportunities
for SMEs to participate in public procurement is now being appreciated.
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For More Information
Contact:
Peter Hill
TPP Law Limited
53 Great Suffolk Street
London SE1 ODB
t 020 7620 0888
f 020 7620 0778
e info@tpplaw.co.uk
Email:
Peter
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