Business
What SMEs should look out for to get a fair deal from public sector window providers
I was very interested to see that Labor has pledged to champion the cause of British SMEs. As a frontrunner in the elections, it could signal new opportunities for economic growth, at least according to the polls.
In terms of government contracts, there will be a guaranteed shortlist for smaller companies to give them a fairer chance when bidding for government contracts.
It is something we find important at LHC. We have been consciously advancing the cause of SMEs for decades and while we recognize that we can always improve, we are proud of what we have achieved so far.
As a building construction provider, we are at the heart of public sector projects such as schools, hospitals and affordable housing. And in a sector that consists mainly of SMEs, you would expect construction to lead the way.
But in reality, frameworks’ approach is inconsistent when it comes to attracting and bringing in designated businesses. It means that many SMEs feel like it’s a closed shop when it comes to public sector contracts: difficult to bid for and difficult to win.
Here at LHC we try to ensure that SMEs get a fair beating, so much so that LHC Procurement Group has appointed 1,266 suppliers for our frameworks over the last ten years and 1,048 of these suppliers were SMEs. That is 82.7%.
Looking at last year’s projects (April 23 to March 24), we awarded 1,356 projects, of which 956 were awarded to SMEs. That is 70.5%.
How does this translate when it comes to SME income? Well, here the numbers are equally interesting.
Last year, project values at LHC exceeded half a billion pounds for the first time in our history. Of this, £245 million was awarded to SMEs.
To achieve this high success rate, we follow a number of guiding principles:
- We work hard to engage smaller and local businesses and underrepresented groups during our tender process and when designing our frameworks themselves.
- We are keen to attract organizations that have never been engaged on public sector projects before and deliver workshops so that they fully understand the process.
- We take extra care in the design of our frameworks to ensure we don’t create barriers that could stop smaller businesses from signing up.
- Proactive engagement with underrepresented groups is another key; looking for and collaborating with industrial networks, and they are plentiful. Removing arbitrary barriers for SMEs, such as unattainable PI levels.
- Be specific about the desired results rather than just “testing based on what has been done before”.
- Evaluating qualities instead of repeating previous work. Not lowering the quality threshold – this is crucial – but instead reassessing the way we evaluate quality. Provide support training with SME groups.
It is also worth adding that we discuss with customers and end users what their perception of “risk” is when it comes to working with an SME; Is it real or is it just a set of rules they have been following for a long time?
In Labor’s small business plan published in November, shadow business and trade secretary Jonathan Reynolds said there would be £30 billion worth of government contracts available to smaller businesses, but currently 90% of that is still awarded to large companies.
We are seven days away from the general election and Labor has said it will look carefully at the treatment of this country’s small and medium-sized businesses, ‘the beating heart of our economy.’
It adds that it will “embed the voice of small businesses in everything we do”, adding: “ensuring we have the policy framework needed to help our small businesses thrive and grow.”
I think we are doing well at LHC when it comes to SME engagement, but we never become complacent. There is always more to do. SMEs truly are the lifeblood of our economy and we will do our part to keep it that way.
