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Reforming Procurement Must Enable Welsh SMEs

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The Wales Audit Office (WAO) published a report on the current state of public procurement across the nation.

The report, entitled Public Procurement in Wales, found that Welsh public sector bodies spent approximately £6 billion on the procurement of goods, services and works. The auditors have however pointed out “notable procurement failures” across local public institutions in Wales.

Huw Vaughan Thomas, auditor general at the WAO, has said:

“Our findings are clear: while public bodies face a range of challenges in a changing procurement landscape, they can do more to strengthen their procurement arrangements and recent examples highlight the financial and reputational risks of getting procurement wrong.”

The National Federation of Builders (NFB) believes that based on the scale of the projects undertaken by larger organisations, SMEs are often overlooked in spite of the expertise and efficiency they bring to the supply chain.

Construction SMEs, in particular, train and retain two-thirds of all construction workers. In addition, for every £1 invested with an SME, 90p remains locally to train local apprentices, employ local workers, and grow the local economy.

A study by Bangor Law School into the barriers preventing SMEs from securing public sector contracts has helped bring about greater transparency in public procurement and resulted in more successful bids for SMEs.

The research uncovered a number of flaws, including evidence that public bodies in Wales were not providing sufficient tender evaluation information. In many cases, they were not even advertising ‘sub-OJEU-level’ contracts (below £130,000), which are of the ideal size for SMEs.

Rico Wojtulewicz, policy advisor of the NFB, said:

“With a third of the £6 billion procurement spend in construction; the Welsh Government has a chance to reform its procurement process and begin enabling local SMEs, who train and retain two out of three apprentices in the industry.

He continued:

“Unless frameworks become more SME-friendly, Wales will struggle to make sure its investment sees sustainable economic returns.”