Strict public sector tender rules stifle innovation, say over 40% of SMEs


New research has revealed that over two fifths (41%) of British SMEs believe the parameters set out in public sector tenders are too proscriptive and they are stifling innovation in their responses. The finding is among a series of frustrations SMEs have with the tendering process which are actively discouraging them from pursuing public contracts.

The research carried out by AM Bid, creators of Ultimate Tender Coach – a new digital training platform designed to provide SME businesses with the skills required to secure public contracts – shows that this is one of many real and perceived challenges. Others, such as satisfying arbitrary minimum turnover figures and demonstrating previous public sector experience are among the most common complaints Britain’s SME bosses have when assessing tender qualification rules for public contracts.

Among the other most common frustrations, 46% of respondents to the research cited understanding and navigating the complexities of the procurement process, 48% were concerned with onerous compliance requirements and 41% felt that deadlines were too short.

“The fact that many business leaders think the way public tenders are procured is so proscriptive that the tenders themselves become a brake on innovation, should be a concern to public procurement professionals”, said David Gray, managing director of AM Bid.

“Part of the reason that the public sector goes out to market is to identify appropriate but novel approaches and to bring in new thinking and new ways of working. Many public procurement bodies do this extremely well, but there’s a common perception although tendering for public work is potentially lucrative, it is still very time consuming and arduous.”

Gray added: “The research shows that the vast majority of SMEs find the public procurement process challenging, and while the sector is already reacting to some of these barriers and trying to encourage greater SME engagement, we set out to use our bidding expertise to provide additional help.

“We created Ultimate Tender Coach to provide SMEs with the skills they need to win contracts that their businesses are very capable of delivering. It’s a unique digital learning programme informed by over 40 years of successful public tender winning experience and SME feedback on the challenges they face winning contracts.

“The programme provides the knowledge SMEs need to navigate the procurement process to develop compelling tender responses and win more business.

“We are also supporting the programme with weekly live coaching calls and a private members group, as we know SMEs want more than just online training. This means we can share news, industry insights, contract opportunities whilst building a community of SMEs committed to winning more public contracts.”

SME businesses make up around 99.9% of all UK businesses and the UK Government wants £1 in every £3 of public procurement spend to go to SMEs by 2022.

Achieving this would represent a huge leap from the current rate of around 12% of the £290billion spent by the UK public sector on procuring goods and services annually.

Ultimate Tender Coach is aimed at SME businesses that are currently bidding for public contracts and not winning enough of them, or those that want to bid for public contracts but don’t understand the process or what it takes to develop a winning tender. 

About the research

The Ultimate Tender Coach research was carried out online by 3Gem throughout 23/08/2021 to 31/08/2021 amongst a panel of UK based SME owners, resulting in 200 responding. All research conducted adheres to the MRS Codes of Conduct (2010) in the UK and ICC/ESOMAR World Research Guidelines.

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