25% of all government contracts should go to small and mid-sized businesses by May 2015, according to guidelines from Cabinet Office minister Francis Maude.
In total, government departments spend around £230 billion per year on products and services. This makes the new rules a major opportunity for smaller players to enter the market and snap up high value contracts in sectors ranging from PR and marketing, courier services, facilities management and office supplies through to IT services such as systems building and coding.
What’s more, central government agencies are now obliged to pay their invoices within 30 days (and must ask contractors to do the same), cutting out the crippling payment delays that put SMEs off bidding for contracts in the past.
In an effort to make the procurement process transparent, the government is in the process of launching Contractsfinder, a new portal for submitting bids, that allows companies to find open contracts in their area, to group together in a collective pitch if required, and to see which contracts went to whom and at what prices.
So, with just six months until the rules come into effect, how can small businesses position themselves to appeal to government procurement teams?
Sally Collier, head of Crown Commercial Services and an expert in government procurement, has the following advice:
- First, determine your strategy. Work out whether you want to sell to central or local government, and whether you want to sell direct or via a large supplier.
- Second, decide on the top six relationships you need to cultivate to achieve this – whether it’s with large suppliers, or direct with the buyers listed on Contractsfinder.
- Finally, talk to the buyers. They want to speak with you to explain what they’re after, so that everyone gets the best result.
For more advice on how SME can win government procurement contracts, take a look at this information from the Crown Commercial Service. As a supplier, you can also register for free with Contractsfinder by clicking here.