SMEs urged to ready themselves for public procurement changes

01/02/2022
David Gray, Managing Director of AM Bid

SMEs are being urged to prepare themselves for the UK government’s planned overhaul of procedures for the awarding of public sector contracts – or risk losing out on millions of pounds’ worth of business.

Westminster’s Transforming Public Procurement Green Paper proposes a switch away from Most Economically Advantageous Tender (MEAT) to Most Advantageous Tender (MAT) evaluations.

Under the proposals which are expected to be implemented in the near future, elements such as social value, environmental factors and prompt payment of suppliers would all be considered, along with the cost, as part of the tender evaluation process. 

The change is designed to unlock new opportunities for small businesses but if they are not ready to adapt, SMEs risk missing out to larger businesses on their share of the £290bn the public sector spends annually.

The warning came from Scottish bidding and tender expert David Gray, the creator of Ultimate Tender Coach (UTC), an online training programme designed to help SMEs win more public contracts by covering the end-to-end bid process.

Research into the proposals conducted in association with the recently-launched digital learning platform revealed that 30% of SMEs are currently unaware of the proposed changes and Mr Gray said: “The upcoming changes should be seen as a positive step, reducing the importance of price alone being the deciding factor and addressing the often perceived ‘race to the bottom’ in public sector procurement. 

“However, the changes will require businesses to closely examine their operations and consider how they will be able to demonstrate their value if not simply through attractive pricing. The good news is that this should enhance public procurement and contracting, potentially improving efficiency, sustainability and profitability for suppliers. 

“And with large private corporations increasingly prioritising environmental, social, and governance within their supply chains, small businesses that focus on developing their own ESG initiatives should find themselves in a stronger position to win both public sector and private sector contracts.”

Other findings of the survey raised concerns that moving away from the term “economically” would reduce the focus of the evaluation on value for money, and might create barriers for SMEs who might not have the capability or capacity to invest in projects in a way that would score well against a Most Advantageous Tender evaluation.

On the other hand, the changes present new opportunities for SMEs who have previously found themselves frustrated by the public procurement process. 

The UTC research found that 34% of SMEs believe their small size has proved a disadvantage, 20% have been concerned that the incumbent supplier or contractor is likely to win, and 41% have found the requirements too prescriptive. 

Mr Gray, who is managing director at Scotland’s leading bid and tender consultancy, Edinburgh-based AM Bid, added: “Importantly, businesses will also need to ensure their responses to public sector tenders appropriately highlight their strengths with the new criteria in mind. 

“It may be sensible for SMEs to seek out professional bid writing training or support to equip themselves with the knowledge and skills required to write effective tender responses.”

Developed by AM Bid’s public sector bid experts, the Ultimate Tender Coach programme is made up of flexible online video modules that can be worked through by SMEs at their own pace. It is supported with live weekly coaching calls with a Bid Director and a private LinkedIn members group, providing the opportunity to network and share information, ideas and opportunities.  

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