What SMEs need to know to win government contracts

By Adrian Chamberlain, CEO, Achilles.

Chancellor George Osborne announced in his Budget that UK small and medium businesses (SMEs) are set to get five times as much from government contracts in 2014-15 as they did in 2012. But will this new scheme dubbed the Small Business Research Initiative (SBRI), actually help innovative small businesses get their fair share of work in the public sector?

In the past, many SMEs were fearful of the time and cost of tendering for government or large infrastructure projects. Clearly the coalition government is looking to address this issue via the introduction of SBRI to give SMEs the confidence that they can get a slice of the pie. However, it is also important that industry rallies to help SMEs by sharing tips on how to increase their chances of success.

First, it makes sense to start thinking about what procurement teams in government and highly regulated industries are actually looking for. No SME will ever get off the starting blocks if standard company documents are not in order – from financial statements, to insurance certificates and policies around sustainability and health & safety. Many smaller organisations chose to work with a neutral, third-party to ensure their data is up-to-date, verified and easily accessible by both large and public sector organisations.

Second, SMEs need to embrace audits and accept the challenge of continually improving standards. In our experience, the majority of SMEs recognise that audits are a key tool for driving improvement within their businesses; however in order to really benefit the organisation audits must not be seen as simply a tick-box exercise. Provided they are qualified, validated and evaluated by an independent third-party, supplier audits can help identify potential areas to shine in a competitive marketplace, reduce costs, risks and inefficiencies across the entire supply chain.

One of the biggest blocks to SMEs securing large procurement contracts is their lack of belief in their ability to deliver a good service to a much larger organisation. SMEs often think it's not worth bothering because they'll be up against much bigger players. The reality is different. Evidence from the buyers we work with shows that buyers like to work with SMEs because of their flexibility and the value they offer. As an example, Link-up – the UK rail industry supplier registration and qualification service, comprises 77 per cent SMEs. In addition SMEs tell us it's useful being part of cross-industry communities, where they can be considered for contracts on a level playing field with the big operators.

The SBRI is offering SMEs a huge window of opportunity – and those organisations that are agile and forward-thinking will reap the benefits. George Osborne said during the Budget that, "Under the SBRI, businesses compete for government contracts to develop new ideas with the potential to tackle public sector challenges." The SMEs who win those big government contracts will come equipped with original ideas, and, just as importantly, with their paperwork in order to pacify the procurement team.