THE Government has pledged to radically reform the procurement system, which should make it easier for small firms to get a slice of the £230bn of public-sector contracts put out to tender annually.
The shake-up intends to simplify the process to make it more user-friendly. It includes publishing more than £50bn of contracts on a new website and speeding up the time it takes to do business with the public sector.
The Government intends reduce all but the most complex procurement processes to a maximum of 120 days by January next year, down from the current 200-day maximum.
The moves, announced by cabinet office minister Francis Maude, were welcomed by the Forum of Private Business.
FPB chief executive Phil Orford said: “With a budget of around £230bn a year, the state remains the single biggest source of work for UK business.
“Encouraging smaller firms to compete for access to Government contracts is something we have long campaigned for and, if successful, should provide a vital source of new income for smaller firms in to the future as the UK economy grows.
“Competing for public procurement contracts has traditionally been a complicated, time-consuming process, making it an unattractive, remote prospect for small business.
“Any reform which simplifies the procurement process, demands fewer man hours and less financial outlay is clearly welcome.”
However, he said that in order for the new system to work properly and actually open up public procurement to small firms, the Government must also ensure that businesses are paid on time.
“Big business may well be able to absorb late payments weeks past the invoice date, in some cases months, but for small business it can be a terminal blow,” said Orford.
“It will be a real test of how streamlined the new procurement system is and if it will actually make any difference to SMEs.
“Less red tape, less form filling, and a quicker decision on the actual outcome of tendering should also drive down costs and should mean the public getting better value for money.”