Procurement job cuts have unintended consequences for SMEs
I was with a government procurement representative recently. She happened to mention the reduction in procurement staff meant they were being encouraged to place contracts that encompassed more and more capability. This policy is to get them ready for yet more job losses. Simply put, if the number of contracts isn’t reduced the remaining staff will not be able to cope with the workload in the future.
But more capability means higher value contracts with more varied skills. So, where does this leave SMEs? The obvious answer is not as the tier one contractor. This is a shame, given the Governments aspiration to include more SMEs in the supply chain.
So what can the public sector do to compensate for this catch-22 situation? They can’t increase posts. They can’t place many small contracts. They cannot use frameworks because even they require the very resource that is being cut. Could they ensure sub-contacts are let for a certain percentage of the contract value (as appears to be the case here)? Can they encourage the SMEs to band together and pool resources, to offset risk etc?
I would like to be able to say “time will tell”, but time is running out. An already stretched resource is trying extremely hard to ensure that vital services have some coverage, and they do not have the headroom to mentor the industry on collaboration. Small businesses will need to rely on the usual prime contactors to share the work. Let’s hope the slim pickings do not lead to famine.
☛ Richard Tottman is a principal consultant at QinetiQ Commerce Decisions
![[Bloglines]](http://blog.supplymanagement.com/wp-content/plugins/bookmarkify/bloglines.png)
![[del.icio.us]](http://blog.supplymanagement.com/wp-content/plugins/bookmarkify/delicious.png)
![[Digg]](http://blog.supplymanagement.com/wp-content/plugins/bookmarkify/digg.png)
![[Facebook]](http://blog.supplymanagement.com/wp-content/plugins/bookmarkify/facebook.png)
![[Google]](http://blog.supplymanagement.com/wp-content/plugins/bookmarkify/google.png)
![[LinkedIn]](http://blog.supplymanagement.com/wp-content/plugins/bookmarkify/linkedin.png)
![[Twitter]](http://blog.supplymanagement.com/wp-content/plugins/bookmarkify/twitter.png)
Richard, you have raised very valid points and I believe this should be fed directly to Francis Maude Office. Goverment is very keen to stimulate SMEs market and want us to make it happen. If procurement across the land do not feel they have capacity and skill to do it this will have to be addressed.
Richard: super blog. Renata: dream on.
Again it is back to priorities. Does the government want Lean procurement more or less than more business for SMEs. Clarity of priorities is still the issue – see my response to Renata’s “Rising to the Challenge” blog.
Who cares about SMEs? The important headline is “Taxpayers money wasted by bad procurement”
I agree with you Roy. Consequences that multiple policies have on the working level rarely seem to be understood, or thought through. Or, if they are understood, where is the evidence? Those at the coalface are left to deal with the conflicting policies as best they can. This doesn’t seem fair or sensible.