Reconsidering SMEs
Increasingly, there is a move to ensure more small- to medium-sized enterprises (SMEs) are included in the supply chain, particularly within central and local government. Indeed, central government has committed to a target of 25 per cent of contracts going either direct or transparently indirectly to SMEs by 2015.
As far as local authorities are concerned, the arguments for using local suppliers and keeping money within the local community are so strong one would hope that figure would be considerably higher given 99.9 per cent of businesses are SMEs.
Do most procurement departments really consider the DNA of the SMEs they might want to deal with: the unique characteristics of those small, innovative, entrepreneurial businesses?
In most instances the answer is a resounding “no”. Some of these very small firms provide excellent goods and services. So why, I wonder, do tender processes, particularly those under OJEU, remain so complicated and inappropriate? Does it make sense to ask a company of, say, six graphic designers/web developers to complete a 60-page PQQ requiring them to have ISO 9001 certification and asking what their biodiversity policy is?
Does that sound a bit extreme? It is, but it happens.
I’m not one for the dreaded acronyms, but there are two we use when training consultants to be able to undertake The Responsible Business Standard. We insist that they take KATE (knowledge, attitude, training and experience) with them on every audit and remind them that KATE likes ASTI (appropriate, size, type and impact).
In other words, we don’t audit to a specific benchmark, but to what is appropriate for each company.
For a small business, the cost and time commitments of attaining certifications such as ISO 9001 are far too onerous: they do not have the resources available.
Consider this: is it better that a company has systems and processes that are used and understood by all, even if not in writing or to some specified format, than a filing system full of perfect documentation that no-one ever uses?
Of course it is excellent if businesses do have some form of certification, which is why we designed The Responsible Business Standard specifically for smaller businesses, but if there is a genuine desire to use more SMEs, this continual demand for policies, documentation and certification that do not meet the ‘ASTI’ test must be addressed.
☛ Have a rant. Something you want to get off your chest? Get on the SM Soapbox. Send a brief outline of your proposed article to rebecca.ellinor@supplymanagement.com
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Jill
Thank you so much for putting together a clear, succinct case on behalf of sme’s and the tender process! We are not ISO accredited, not becuse we do not provide a quality service but simply because of cost, time, resource and bureaucracy. We do not have a full blown environmental policy but that doesn’t mean to say that we do not take our responsibilities for the environment seriously. We also do not have a Freedom of Association policy but again, we would not support any organisation that uses and absuses its people. The list goes on and because we invariably say no, we lose points and cannot compete favourably with some local and central government tenders. Does that mean that we are not as good as some of our larger competitors who can tick all of the boxes? Absolutely no. We operate to high standards; we have our own in-house processes that are monitored and measured to ensure that we deliver a quality service and our wish is that we are not penalised as part of a tender process just because we are small and can’t tick all of the boxes!
Well said Gail. Your company absolutely typifies the thousands of small business across the UK who do operate their businesses to high standards but don’t fit the normal blueprint.
Clearly this unfair situation needs to be addressed if SMEs really are going to be welcomed in to the public sector procurement fold!