How are Governments using procurement to support SMEs?

Small businesses won a record-breaking amount of government work in the UK in 21/22

The Cabinet Office figures show that UK small businesses received £21 billion worth of work in 2021/22. This breaks down to around £3.8k per British small business.

The work includes all sectors, including public infrastructure - like supporting building schools and hospitals, defence and healthcare.  

The figure is an increase of £1.7bn on the previous year, and the highest since records began, representing the fifth year in a row that government work won by small businesses has increased.

“One in three pounds of public money is spent on public procurement, which is why through the Procurement Bill we are improving the way it is regulated to save the taxpayer money and drive benefits across every region of the country,” said Minister for the Cabinet Office Jeremy Quin.

The Rt Hon Jeremy Quin MP, Paymaster General and Minister for the Cabinet Office (Credit: GOV.UK)

It comes as the new UK Procurement Bill draws closer, that is designed to open up more public procurement to SMEs.

What does the UK Procurement Bill include?

  • Greater visibility of upcoming work, giving SMEs more time to gear up for bidding
  • A new central platform showing future work in each area. This means for example a new SME tech firm in Lancashire will be able to search for tech opportunities upcoming in their region
  • Creating one single website to register on, rather than the multiple and time consuming systems SMEs currently have to register on before bidding for work
  • Reducing unnecessary insurance costs before a supplier has even bid for a contract
  • A new Competitive Flexible procedure, which will allow contracting authorities to design more innovation into the process.
  • Strengthening prompt payment, so that businesses throughout the public sector supply chain receive payment within 30 days

Federal procurement in small US businesses

It comes as recent figures indicate that a record breaking $163 Billion in federal procurement opportunities have gone to small US businesses.

The US Small Business Association is reporting the Biden-Harris Administration has exceeded their small business contracting goal of 23% in the 2022 financial year, awarding a record high 26.5% of federal contract dollars to small businesses.

This is an $8.7bn increase on the previous fiscal year, with a total of $162.9bn in investment in the small business economy.  

“Through President Biden’s Investing in America agenda, we have championed initiatives to fuel our nation’s historic economic growth while reducing barriers and ensuring fair competition in federal contracting,” said SBA Administrator Isabella Casillas Guzman . “The Biden Administration continues to raise the bar, reaching a record high level of contract spending with small businesses, supporting over one million good-paying jobs in manufacturing, construction, research & development, and other vital industries.”

There have been other areas of progress including more spending with small disadvantaged businesses, service-disabled veteran owned small businesses, historically underutilised business zone small businesses, and women-owned small businesses.

In a statement from President Biden, he said he continues to be determined to build the economy from the middle out and the bottom up, and not the top down.

“Small businesses are the engines of our economy and the heart and soul of our communities, and investing in our small business entrepreneurs means investing in competition and job creation,” he said.

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Other magazines that may be of interest - Supply Chain Magazine | Sustainability Magazine

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