Strict Public Sector Tender Rules Stifle Innovation, Say Over 40% Of SMEs

People reviewing a contact in an office New research has revealed that over two fifths (41%) of British SMEs including those in the facilities management sector, believe the parameters set out in public sector tenders are too proscriptive and they are stifling innovation in their responses. The finding is among a series of frustrations SMEs have with the tendering process which are actively discouraging them from pursuing public contracts.

The research carried out by AM Bid, creators of Ultimate Tender Coach – a new digital training platform designed to provide SME businesses with the skills required to secure public contracts – shows that this is one of many real and perceived challenges. Others, such as satisfying arbitrary minimum turnover figures and demonstrating previous public sector experience are among the most common complaints Britain’s SME bosses have when assessing tender qualification rules for public contracts.

Among the other most common frustrations, 46% of respondents to the research cited understanding and navigating the complexities of the procurement process, 48% were concerned with onerous compliance requirements and 41% felt that deadlines were too short.

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“The fact that many business leaders think the way public tenders are procured is so proscriptive that the tenders themselves become a brake on innovation, should be a concern to public procurement professionals”, said David Gray, managing director of AM Bid.

“Part of the reason that the public sector goes out to market is to identify appropriate but novel approaches and to bring in new thinking and new ways of working. Many public procurement bodies do this extremely well, but there’s a common perception although tendering for public work is potentially lucrative, it is still very time consuming and arduous.”

SME businesses make up around 99.9% of all UK businesses and the UK Government wants £1 in every £3 of public procurement spend to go to SMEs by 2022.

Achieving this would represent a huge leap from the current rate of around 12% of the £290billion spent by the UK public sector on procuring goods and services annually.