UK Government to include SMEs in the award of contracts worth £31 billion

£31bn Procurement Contracts

​​Love it or loathe it, the UK public procurement process is still the only lawful way to sell high value goods and services to public sector buyers. 
​ 
​In 2020/21 £357 billion was spent by the UK Government (including the public sector) as a direct result of a public procurement process. 

Admittedly, this was largely driven by the public sector’s collective response to the COVID-19 pandemic. But, an estimated £31 billion in procurement contracts will be awarded by the UK Government in 2022/23. 

So what is public procurement and what is a procurement framework? 

What UK Government contracts will be awarded in 2022/23 and what opportunities exist for Small and Medium Enterprises (SMEs) who participate in a public procurement process?

​Read on to find out.

What is public procurement? 
​

Public procurement refers to the official procurement procedure followed by UK Government departments and UK public sector bodies when procuring common goods and services for the benefit of UK citizens in England, Wales, Scotland and Northern Ireland.

Why is public procurement important? 
​

Public procurement is important to ensure public sector bodies and government departments are made accountable for the decisions they make on how they spend public money and who they spend public money with. 

What is a procurement framework? 
​​

A procurement framework is defined as a list of pre-approved suppliers, with agreed terms and conditions and legal protections.

Procurement frameworks are created for public sector buyers (who want a simple process to pre-select suppliers).

​Procurement frameworks are used extensively in the UK with the intention of speeding up the procurement process and leveraging better prices.

Who in Government is responsible for awarding procurement frameworks?
​

​​The Crown Commercial Service (CCS) is the largest creator of procurement frameworks for common goods and services in the UK.

Established in April 2014, the Crown Commercial Service is a trading fund and Executive Agency of the Cabinet Office.

The Crown Commercial Service works closely with (and provides funding to) the Cabinet Office who ​has overall responsibility for setting public procurement policy in England and influencing public procurement policy in Wales, Scotland and Northern Ireland. 

What are common goods and services? 
​

The term 'common goods and services' is reference to the goods and services all UK Government departments and UK public sector organisations purchase using a consistent specification.  

Examples include: 

• agency and recruitment services,
• MFD's and office supplies,
• facilities management,
• management consultancy,
• soft FM and hard FM,
• waste management services,
• laptops, mobile phones and computer equipment,
• utilities,
• uniforms and workwear,
• furniture,
• telecoms and network services,
• accountancy and audit services,
• insurance, 
• legal services,
• marketing, media, event management and PR services,
• hotel services, 
• payroll management and salary sacrifice,
• vehicle leasing services.

Does the UK Government have an SME procurement strategy? 
​

Yes, the UK Government does have a procurement strategy for SMEs and lists the benefits that SMEs offer public sector buyers as:

• being more relatable to customer needs, 
• offering better, more personalised customer service,
• providing speed and agility to respond to customer requirements,
• providing more competitive rates,
• providing specialist expertise and industry knowledge,
• being more agile and adept at driving innovation,
• supporting local social, economic and environmental commitments.

The Cabinet Office recommends public procurement should be leveraged to support national priority outcomes and local priority outcomes. Examples include:

• creating new businesses, new jobs and new skills,
• tackling climate change and reducing waste, and
• improving supplier diversity, innovation and resilience.

The UK Governments SME procurement strategy could be used to achieve all of the above priorities and outcomes. 

Do SMEs win business from CCS procurement frameworks? 
​

Yes, £27.6 billion pounds of taxpayers' money was spent through the Crown Commercial Service procurement frameworks in 2021/22. 
​
Of the £27.6 billion, £2.2 billion (13.1%) was spent 'directly' with 2,473 SMEs, as of March 2022. 

in November 2021 there were 13,000 SMEs awarded a place on a Crown Commercial Service procurement framework agreement.

But in September 2021 only 1,500 (12%) of the 13,000 awarded SMEs had recorded winning any spend under the CCS procurement framework.

The vast majority of awarded spend to SMEs was through the G-Cloud, Technology Products and Digital Outcomes procurement framework agreements. ​

What percentage of CCS tenders are awarded to SMEs? 
​

​SMEs represent 66% of the total Crown Commercial Service awarded procurement framework suppliers.

Of the 66% of SMEs awarded a place on a Crown Commercial Service procurement framework: 

36% are micro enterprises,
19% are small enterprises, and 
11% are medium sized enterprises. 

The remaining 34% of suppliers are large businesses. At the time of writing the Crown Commercial Service lists 51 strategic suppliers on their website. 

Strategic suppliers are defined as the suppliers the UK government spends the most money with and with whom they have entered into a Memorandum of Understanding (MOU) with to ‘enhance’ the contractual relationships. 

The UK Governments strategic suppliers include: 

• the big 4 accounting and consulting firms,
• infrastructure, engineering & construction firms,

• defence & security firms,

• communications infrastructure / technology / software providers,

• facility management & back office outsourcing providers, and

• one energy provider.

What CCS tenders are due for release? 
​

There are 6 brand new Crown Commercial Service procurement frameworks planned for release in 2022/23: 

RM6264: Facilities Management and Services DPS
RM6279: Food and Drink 
RM6241: Housing Maintenance and Management DPS
RM6257: Security - Physical, Technical and Support Services
​RM6195: Big data, Analytics and MI
RM6261: Mobile Voice and Data Services

There are a further 14 Crown Commercial Service procurement frameworks (to replace existing procurement framework agreements) planned for release in 2022/23 : 

RM6313: Demand Management and Renewables DPS
RM6314: Demand Management and Renewables
RM6184: Offsite Construction Solutions
RM6251: Supply of Energy 2
RM6244: Purchase of Standard and Specialist Vehicles
RM6248: Payment Solutions
RM6322: Fund Administration &  Disbursement Services
RM6268: Vehicle Lease, Fleet Management and Salary Sacrifice
RM6290: Executive Recruitment Services
RM6240: Public Sector Legal Services
RM1557.13 L1 - 3: G-Cloud 13
RM1557.13 L4: G-Cloud 13
RM6259: Vertical Applications Solutions (was DAS 2)
RM6292: Cloud Compute 2

Are CCS tender processes SME friendly? 
​

The short answer is yes and no, it ultimately depends on the procurement strategy. 

In our experience, we have found the Crown Commercial Service G-Cloud and digital procurement framework tender process to be extremely SME friendly.
​ 
But, we have equally experienced very SME 'unfriendly' tender processes facilitated by the Crown Commercial Service. For example, the management consultancy tender used a minimum turnover threshold as a barrier to entry onto the procurement framework.

The fundamental principles of public procurement are transparency, equal treatment and fair and open competition. All public procurement must be conducted in accordance with an auditable procedure that fully adheres to the relevant public procurement legislation at that time.
​
We have experienced inconsistencies in the Crown Commercial Service tender approach in terms of the:
​

• minimum selection requirements,
• number of places on the procurement framework,
• tender evaluation approach and scoring,
• award communications and supplier debrief.    

The UK Governments green paper 'transforming public procurement' also raised similar concerns stating publicly that:
 
“The Government - will intervene if capability is lacking. Contracting authorities should be held to account for ensuring their commercial teams have the necessary skills and experience to ensure taxpayers’ money is spent effectively and efficiently.......We (UK Government) propose establishing a new unit to oversee public procurement with powers to review and, if necessary, intervene to improve the commercial capability of contracting authorities”

From April 2022 contracting authorities are required to benchmark their procurement capability. 

​This includes the Commercial Continuous Improvement Assessment Framework produced by the Government Commercial Function with NHS England and NHS Improvement, and the National Procurement Strategy Toolkit produced by the Local Government Association.

In benchmarking procurement and commercial capability, the UK Government suggest contracting authorities should consider the following:
 
● is work undertaken and assigned to people who have the required capability and capacity to undertake it;
 
● are business needs adequately informed by the commercial strategy to determine when, and how to procure services and works;
 
● are market conditions sufficiently understood and do procurement routes align with supply capacity and capability. ​​

Is winning a procurement framework guaranteed business? 
​

Procurement frameworks are used to create a catalogue of maximum charge rates and/or a list of suppliers who can supply goods and services at the required quality and acceptable risk levels to public sector buyers. 

The award onto a procurement framework does not usually guarantee any business.

Public sector buyers use procurement frameworks to award commitment contracts to suppliers.

What issues are associated with the use of procurement frameworks? 
​ 

A common criticism of procurement frameworks is that the majority are poorly designed and executed.

The UK Governments green paper - 'transforming public procurement' acknowledged public sector buyers have a mixed understanding of the procurement frameworks available. 

They found that public sector buyers often struggle with:

• knowing which procurement framework to use due to multiple procurement frameworks having a similar scope and suppliers, 

 

• the complexity of the call off contract process, e.g. when to direct award and when to invite all suppliers to a procurement process,

 

• the time and resources required to comply with the procurement framework call off contract process, 

 

• inflexibility and limited circumstances in which some procurement frameworks can be used,

​

• transparency, matching the values of procurement framework call off contract awards to the original procurement advert and procurement framework.

 

• ​​standstill periods, debriefing suppliers and understanding the rights and remedies available to suppliers (who may contest the award).  

The Crown Commercial Service also recognises supplier related risks to their business growth strategy as economic and market conditions have the propensity to increase the risk of supplier failure.

Can tender consultants guarantee a CCS bid will win?
 ​

There is no ethical way a bid can be guaranteed to win a place on a Crown Commercial Service procurement framework. 

​Why is this?

​Procurement Law states that a tender process must be fair and transparent with all bidders treated equally.

Equal treatment and transparency are fundamental principles of public procurement. Meaning, to go to tender with a preconceived idea of who the winning bidder will be, is unlawful.  

About the author

Naomi Clews Consultancy are public procurement process experts who specialise in helping our clients to bid for and win more Crown Commercial Service procurement frameworks.