SMEs struggle with public sector tenders

Small businesses are still struggling to win public sector contracts despite the government's efforts to make it easier, research finds.

The latest figures from a survey of 2,700 companies by the Federation of Small Businesses (FSB) reveal that 40 per cent of small operators believe the tendering process for public sector contracts is too complex, while 37 per cent think they are sidelined by public officials who believe bigger firms must be better.

The findings come despite the government’s launch of its Contracts Finder website designed to make it easier for small firms to find and bid for public sector work.

Although one in seven companies had bid for a public sector contract in the last year, 41 per cent failed to secure any business from any of the bids they had submitted.

Of those that had won contracts, only a quarter (27 per cent) say they had found the Contracts Finder website useful, with twice that number (55 per cent) relying on personal contacts and referrals.

Two fifths of small businesses still want a simplified tendering process, with 38 per cent believing that public sector bosses should evaluate tenders based on experience and ability rather than on the size and turnover of bidding firms.

The FSB is calling for all parts of the public sector to agree to the range of measures to support small firms detailed in the Procurement Pledge published by the government last week.

FSB national chairman John Walker says, ‘The government has made an effort to raise awareness in the public sector that Britain’s entrepreneurs and small businesses are willing and able business partners.

‘But clearly more must be done. While central government has raised its game, without a true culture change across the public sector as a whole the government’s initiatives will have little impact.’

See also: How to apply for public sector tendering as a small business

Ben Lobel

Ben Lobel

Ben Lobel was the editor of from 2010 to 2018. He specialises in writing for start-up and scale-up companies in the areas of finance, marketing and HR.

Related Topics

Government contracts