Clearing the Path for SMEs in Public Procurement

For small and medium-sized enterprises (SMEs), entering the world of public procurement can often feel like navigating a maze.  

There are countless myths and misconceptions that circulate within business networks, discouraging many SMEs from even attempting to bid for public sector contracts.  

The common refrain is all too familiar: “Public sector contracts always go to the big players; it’s too difficult to break in; the process takes too long; you never get paid on time.” These myths have held back many Welsh businesses from accessing opportunities that could be a game changer for them. 

At Business Wales, we recognise that busting these myths is crucial if we are to encourage more SMEs to participate in public procurement. Over the past few years, we’ve been creating case studies and videos to show SMEs that procurement is changing, and that these barriers are not always as high as they might seem.  

With initiatives delivering on Welsh Government’s Foundational Economy policy, we’ve been able to engage local businesses in public procurement, especially in sectors like healthcare and construction. For example, we began working with Aneurin Bevan University Health Board to help attract more small local businesses, and now some of our Tier-one construction contractors are actively looking for suppliers within a 30-mile radius. This shift towards a more localised supply chain is great news for Welsh SMEs. 

One of the challenges we faced was the lack of a detailed map of the Welsh supply chain. Without this, it was hard for buyers to find local suppliers. But we now have 165,000 businesses on our live mapping tool, allowing buyers to pinpoint suppliers in their local areas. Now, buyers can find something as specific as carrot growers in Abergavenny. 

The Social Partnership and Public Procurement (Wales) Act will also help by simplifying the procurement process and introducing a greater degree of flexibility, making it easier for SMEs to participate. 

It also places a duty on public buyers to consider what can be done to overcome the barriers facing SMEs throughout the entire procurement lifecycle. The Procurement Act requires public buyers to set objectives on building social, environmental, economic and cultural benefits into the expected outcomes for all procurement, and the statutory Wales Procurement Policy Statement will bring all of this together, setting out the Welsh Government’s policy priorities and expectations. 

One of the standout elements of this legislation is the requirement for the publication of contracting authority pipelines over a specific financial threshold. This increased transparency will allow SMEs to prepare for bidding opportunities in advance. At a recent series of events hosted in Swansea and Llandudno, 48 major buyers shared their procurement pipelines, offering up to £35.9 billion worth of opportunities – all of which were accessible to SMEs.  

However, while much progress has been made, there are still barriers that SMEs need support to overcome. Understanding how to find opportunities, how to bid for them, and how to navigate the procurement process are all skills that need to be developed. We’ve been providing support for SMEs including highlighting more opportunities to bid for frameworks using tools like the Dynamic Purchasing System (DPS), which allows businesses to join framework agreements mid-term, rather than waiting up to ten years for the next opportunity. 

The procurement landscape is changing, and it’s an incredibly exciting time for SMEs. The systems are becoming more flexible, and the barriers that once stood in the way are being dismantled. The opportunities are there, along with real benefits for both businesses and local economies. 

More information from Business Wales on tendering and the supply chain, along with contact details for business support, can be found here: https://businesswales.gov.wales/topics-and-guidance/tendering-and-supply-chain