SMEs must be handed more help, says study
The public procurement system in Northern Ireland must undergo radical change to allow small businesses improved access to it, a new report has found.
The study, commissioned by the Federation of Small Businesses (FSB) and carried out by Lestas Consulting, made a number of recommendations that could allow SMEs improved opportunities to successfully tender and access some of the £2bn spent each year on these programmes.
The FSB said it has been concerned for some time that the current system in place for public procurement projects does not fully utilise the services and potential of small businesses.
Chief among the organisation's suggestions is the need to simplify the procurement process and make it much less time consuming after 50% of those surveyed stated they didn't tender for government contracts as they could not afford the time or cost to complete the application stages.
Another major hurdle that must be addressed is the way in which suitable government contracts are publicised to the SME sector with almost 35% of those responding stating they were unaware of available tendering opportunities.
A further 36.5% decided not to bid because they felt they did not stand a chance against an incumbent supplier and almost 30% believed they could not compete with larger suppliers for the work.
The FSB is calling for improved information on the tendering process to be made available to SMEs after almost 18% of those questioned said they did not understand how to go about applying for the contracts while around 12% stated they believed they did not have the skills to complete their bid for the work.
Wilfred Mitchell, FSB policy chair, said: "This research confirms that public procurement is an underused tool when it comes to supporting the indigenous small business sector.
"The current rise in challenges on contract decisions by small businesses is an indicator of the current level of frustration in the systems used and the need for change. Working with the public sector means businesses here could have a long-standing, stable customer who is obliged to pay their bills within the agreed credit period. However, small businesses would say that it is not that easy to secure this work."