Clients accused of excluding SMEs

Public sector clients came under fire from MPs this week for excluding smaller contractors by using large framework contracts and not paying firms on time.

The influential Trade and Industry Select Committee hit out at the government's drive for procurement efficiency, accusing it of disadvantaging smaller firms. In its procurement report published this week, the committee states: "Centralising procurement, bundling tenders and seeking economies of scale appear to conflict with the government's aim of increasing SMEs' access to public procurement contracts."

The report refers to a recent National Federation of Builders survey as evidence of how large government frameworks are reducing smaller contractors' public sector workloads. It warns that SMEs could be forced out of even tendering for public sector contracts as procurement is increasingly centralised into large contracts.

The committee called for greater powers to be given to the Office of Government Commerce to force departments to increase SME involvement in government contracts. It also called for better trained and more experienced procurement personnel.

Government departments are also condemned for "consistently failing" to pay SMEs on time. The committee called on the Treasury "to adopt a more vigorous approach and it could start by giving a better example itself".

NFB chief executive Julia Evans said the main problem with framework agreements is in their implementation rather than the policy behind them.

She said: "The public sector landscape has altered for good, and only firms that step up to the plate and embrace the changes expected of them will genuinely succeed."