back to article Can SMEs score those big gov contracts?

The UK public sector spends £230bn on goods and services a year, roughly 15 per cent of the UK economy and £1 for every £7 spent in Britain. The procurement of these goods and services is a massively complex undertaking, fraught with inefficiency accumulated over successive governments. When the Coalition government was …

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  1. Anonymous Coward
    Anonymous Coward

    Two things

    First, this article needs a disclaimer: "Michael Keegan is Executive Director,Technology Product Group at Fujitsu UK and Ireland Region"

    Second, the problem is not that SMEs can't win big contracts, it's that Government procurement processes don't fit smaller contracts. The effect of that is that procurement costs are wildly out of alignment with contarct value, for all the parties involved.

    1. gerryg
      FAIL

      and another thing

      "Government projects, for example the DVLA putting tax disc renewals online, are often inherently big and complicated. And that’s a reflection of the complexity of the civil service, and the technology it relies upon to maintain and constantly improve public services."

      because: giving a stack of tax discs to on-line insurance compaines is so much more difficult than having Fujitsu (and IBM) build some huge platform to capture the same information and then check the motor insurer's database for a valid insurance certificate

      why: if your job importance is measured on size of budget and number of staff then the HM Treasury "do nothing" investment option appraisal is nothing more than an inconvenient truth.

      For a supplementary view as the comment to this article

      http://www.computerweekly.com/blogs/when-it-meets-politics/2010/11/no-taxation-without-services-c.html

      puts it:

      "References to On-line Driving License renewal as a flagship should recognise that its success demonstrates shows that about a 40% of us are content to pay £2.50 extra for the privilege of helping HMG save 80p! I live barely 50 yards from a Bank and 200 yards from a Post Office. But for the queues in both, it would nearly always take me less time to transact with a human being than it does on-line - thanks to poor response times, bloatware and the need to look up security codes that I have forgotten. The Driving License renewal is one of the few cases where that is not the case."

    2. Anonymous Coward
      Anonymous Coward

      Re: Two things

      It says that at the top right of the page, next to his picture.

  2. All names Taken

    SME DNA and public body DNA are not the same thing.

    So while public procurement initiatives are out there they tend to be clunky, obfuscated and require staffing levels that SMEs are likely not to have along with a mindset essential in public body administration yet almost totally absent in SMEs.

    Plus public procurement contracts tend to be aimed at the once were part of public services departments now with a local authority as single shareholder (yet Treasury able to exert tonnes of influence) type companies.

    And as for sub-contracting but shhhhhh - I think the Treasury really does seek to keep a lid on that one and make sure that no politician draws too much attention to sub-contracting within procurement processes?

  3. Harry Kiri

    Oh really?

    What biased rubbish.

    Do the oligarchy always have massively resources teams waiting around for this big projects? No - they have to go and recruit.

    Here are the reasons why SMEs don't get contracts:

    1. Buyers love dealing with big contracts and big suppliers.

    2. SMEs are seen as 'risky' - more than once we've had to demo a 'fully functional prototype' (ie end product) to prove we weren't a risk.

    3. Apparently big suppliers can charge more because 'they have support behind them' whatever this means. Trying charging 1200 quid a day as an SME and you'll get questioned all ends up.

    4. SME's can't afford the overhead of recruiting ex-civil servants and military personnel to keep the wheels greased.

    5. SME's are under the impression that providing innovation and giving value means something to public sector procurement - it doesn't, the bigger and better for their CV.

    6. Rarely do procurors really know what they're doing and rely on suppliers to tell them what they want, creating a nice little partnership.

    7. Even public sector initiatives like the MoD's CDE prefer to give to the same old oligarchy as opposed to funding innovation.

    8. Ha! Penalty clauses - how often do these get invoked?!?!?!

    The big surprise? That SME's even got 6.5% of the budget.

    1. Nick Ryan Silver badge

      Re: Oh really?

      Absolutely agree.

      We gave up on even considering tendering because of the amount of bias and bribery that goes on in these kind of projects. Even though we knew that we could do the project and we could undoubtedly do it better and cheaper than the big name government contractors, if we didn't spunk money up the wall on overpriced sub-contracts and supplier deals and other back handers there was no way we'd ever get the contract.

      Often the contracts were rife with clauses (threats) that you had to purchase specific required (but no really) kit from a single specified supplier who, when contacted, would refuse to deal with you or even discuss actual requirements.

      Likewise if you weren't willing to take the buying manager on frequent all-expense paid golf trips you'd find that he'd frequently be in meetings, would nit pick on details that when you found the winning contract weren't include in that and all kind of other little hindrances that when added together made for a fruitless exercise.

      A lot of money can be made from these projects, so there's a lot at stake and this tends to not produce the best from people on all sides of the table.

  4. Wibble
    Gimp

    Cultural risk aversion

    There's a genetic aversion to risk in government procurement which results in the "less risky" big boys getting all the work. Saving money appears well down the list when compared with the possibility -- real or imagined -- of a problem affecting a procurement career. That and the importance placed on process over results.

  5. Jim 59

    Declaration of interest

    "Michael Keegan is Executive Director,Technology Product Group at Fujitsu UK and Ireland Region"

    The author really should have declared his interest at the outset of the article. Could The Register please ensure that happens in future. As a reader I need to differentiate between editorial/comment/advocacy/advertising and what-have-you.

    Given the Author's job, the tenor of his article is unsurprising. I have nothing against Fujitsu, but they don't want to lose business to SMEs, and the views here expressed are redolent of that old IBM slogan - "Nobody ever got sacked for buying IBM". Mr Keegan referring to himself as "We..." does not help matters.

  6. Frank Oliver Green

    pretty boring article.

    The posts on this article are the most insightful and interesting element of this piece! Firstly Mr Keegan tries to tackle a subject that is obviously dear to his heart without wanting to sound biased but instead has come across as boring and a fence sitter and has delivered nothing new or insightful in the slightest. Govt want to give SME's more business but they can't/won't because its risky and not how things work. Well done.

    Fujitsu have historically had some extremely juicy HMG service contracts (£40 mouse.. anyone?) and I no doubt Mr Keegan wants to keep those but still keep in with Maudy et al. at the Civil Service and toe the "more business for SME's" line...maybe if everyone at HP/IBM/Fujitsu/CSC etc...talk about it enough the Govt will think they're actually subbing out work to SME's. who knows!

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