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SMEs missing out public contracts worth many millions


Small businesses are missing out on public sector contracts worth millions because the tendering system is too complex and time-consuming, claims a report requested by the Welsh Assembly.

Their findings are supported by research and complaints from small businesses across the country.

In a bid to get more SMES to tender the fee £180 for accessing tender invitations worth up to £100,000 a contract has recently been waived by the government. Tenderwise – a team of specialists from three Welsh universities - was called in to research the progress of public sector tendering and concluded that many SMEs feel the system is designed to stop them from signing lucrative contracts rather than helping them gain work.

Businesses across Wales told researchers that many of them had given up looking for public sector contracts because:

    * Tendering processes are too complex

    * Application forms are too difficult to complete

    * Unduly onerous conditions unrelated to the contract are often imposed

SMEs were especially concerned that the public sector move towards framework or consortia bids locked them out of the tender process because they did not have the funds or resources to compete with bigger firms.

More than 2,000 companies across Wales were invited to take part in the research.

Tenderwise team leader Dr Kath Ringwald of the University of Glamorgan said: “The public sector shows a willingness to work with small and local businesses, but research shows SMEs do not share that view.

“The public sector is concerned with cashable savings, value for money and reducing transaction costs within procedures and legal frameworks while contributing to local economic development.”

Many businesses feel that supplying goods or services to the public sector is like joining an exclusive club and they are not helped or encouraged to take part because the bar to entry level is set too high.

The British Chambers of Commerce said that "too many" companies had a "hard time" bidding for public contracts. Adam Marshall, director of policy, said: "By making tender information free, accessing these contracts should become easier. But, there's still a lot of work to be done in making the tendering process less time-consuming and bureaucratic."


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