What Chance does a small IT technology company have with Public Procurement Contracts?

On the 27th August 2015, Matt Hancock, the Minister for the Cabinet Office announced a new target for small business’ to work in the public sector: 33% of government spending should go to small and medium-sized enterprises (SMEs).

The government definition of an SME is those employing 250 employees or less. In IT, a company of 250 would be huge.. Currently Company Connecting's figures for Scotland show that 97% of IT tech companies registered in Scotland have less than 250 employees.

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So is there a huge opportunity for IT tech SMEs to get into Public Procurement? It’s difficult to say. According to the government figures, it spent £11.4 billion (26%) with SMEs in 2013-2014. But what does that actually mean? According to Peter Smith of Spend Matters in Europe, the actual spending was 10.3% directly with SMEs and 15.8% indirectly.  He goes on to state that for the indirect spend declared via the first tier suppliers that in many cases they have no actual means of measuring how much of their spend actually trickles down to SMEs. So the estimate of 15.8% very conveniently helped to meet the original government target of 25%!

Given that, 70% of IT tech companies registered in Scotland have less than 10 employees, how easy is it for them to win contracts directly in the Public Sector and also with the big tier one suppliers? We are very interested in hearing your experience and any advice you may have for other companies. Can you go it alone? Do you need to team up? Please contact Janice Grant Shaw (janice@companyconnecting.com) with any comments.

First published on www.companyconnecting.com

Interesting links:

Big Opportunities for small firms: government set to spend £1 in every £3 with small Businesses https://www.gov.uk/government/news/big-opportunities-for-small-firms-government-set-to-spend-1-in-every-3-with-small-businesses

Doing business with government: guide for SMEs https://www.gov.uk/guidance/doing-business-with-government-a-guide-for-smes

Supporting SMEs in Public Procurement – New UK Target but We Need More Gazelles http://public.spendmatters.eu/2015/09/09/supporting-smes-in-public-procurement-new-uk-target-but-we-need-more-gazelles/



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"Are commercial concerns and the desire to make a difference mutually exclusive?" First published on Company Connecting January 2018

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