Streamline PQQs and use smaller lots, small businesses tell councils

Local authorities should streamline and standardise pre-qualification processes, break contracts into smaller lots, and provide detailed feedback to all unsuccessful bidders, the Federation of Small Businesses has argued.

In relation to PQQs, the FSB said specific approaches should be adopted for the lowest value contracts.

The Federation called for more accurate and public recording of spend, claiming that it would help to understand the link between procurement and local economic development.

It also recommended that all councils:

  • Put mechanisms in place to record and analyse where and with which businesses money is spent. “This should also measure the size of business by micro, small and medium. The data should be transparent and publicly available.”
  • Ensure they have initiatives to support small firms with the tender process and to develop the potential of their local small business supply base.
  • Provide detailed, specific and timely feedback to all unsuccessful businesses “so they are in a better place to bid in the future”.
  • Use the relevant national portal to advertise procurement opportunities.

The comments came after FSB research found that many councils hand more than half their procurement spend to small and medium-sized businesses.

On average, local authorities spend 49% of their total procurement spend on SMEs.

But the research also revealed significant variation, with some councils spending less than 10% with SMEs and others more than 70%.

In addition, more than a third of respondents (38%) did not actively record the location of their spending and almost half (49%) did not know the size of the business they trade with.

Two-thirds of local authorities admitted that SMEs faced barriers in accessing procurement opportunities.

John Walker, National Chairman of the Federation of Small Businesses, said: “We were surprised that so many councils aren't being more proactive in terms of the how they record their spending. Knowing where spend is going in the local area, as well as what type of businesses are getting contracts, would help councils focus on improving their procurement processes and ultimately boost local communities by helping councils ensure their local small businesses are getting a fair chance to compete for contracts.

"There are a number of steps we would like to see local procurers take to maximise opportunities for small suppliers. No council is likely to be doing everything we recommend, but we would very much like to see as many as possible work with their local small businesses." 

Philip Hoult