Government procurement changes - what they mean for construction

The public sector remains a hugely important source of income for the construction industry. For too long, though, small businesses have been excluded from the procurement process.

The previous government made major steps towards increasing SME access to public sector contracts, but many would argue that they did not go far enough. An announcement from David Cameron earlier this month, setting out the first wave of changes to the procurement process, could therefore be good news for small construction businesses.

What has changed?

Last week, David Cameron announced a series of changes to the way in which public sector procurement takes place. The announcement, hidden away at the end of a big news week, didn’t receive the coverage it deserves. While it might seem esoteric to the press, the announcement will have a significant impact on the way that small firms access public sector contracts.

Perhaps the most important part of the announcement concerns the way in which public sector contracts will be presented in future. The government has launched a new site, called Contracts Finder. This will become the first port of call for contracts worth more than £10,000. This is currently hidden away in the BusinessLink site, and is not performing particularly well in Google. You can access it here.

Contracts Finder also offers high value contracts from TED – the European public sector database.

The Contracts Finder site is rather more user friendly than Supply2Gov. At the moment, so-called low value contracts are still available on Supply2Gov, but this will no longer be the case from 31 March 2011.

What about PPQs?

Small businesses are likely to be heartened by the fact that pre-qualification questionnaires (PPQs) will no longer be required for contracts with a value of less than £10,000. This could mean a major improvement in access to public sector contracts for small businesses. Many small firms were put off the procurement process altogether, simply because they did not have the time or money to work on these documents, which could frequently run to dozens of pages. PPQs will, however, still be required for larger contracts.

What’s this about Dragons’ Den?

Perhaps inevitably, the headlines from the announcement were dominated by talk of Dragons’ Den style tendering panels.

These new, open-access panels will launch in Birmingham in April. They are designed to provide innovative small businesses with the opportunity to present their services to the government, even when no relevant tender currently exists.

The panels will be chaired by Stephen Allcott, an IT entrepreneur and now the government’s ‘Crown Commercial Representative’ for SMEs.

What happens next?

The government has promised to further increase SMEs’ access to public sector contracts. It remains to be seen, of course, what impact the talk coming from Whitehall will actually have.

In the short term, though, SMEs can expect to see improvements to the Contracts Finder website. Phase Two of the project will see added functionality – including the ability to search by buyer.

Finally, it is important to remember that lower value contracts are still available on Supply2Gov. Businesses can, however, expect to see this site gradually phased out.

Despite spending cuts, the public sector will continue to be important for the construction industry. Any measures that help small businesses access public sector contracts can only be good news.