Opening the public procurement door to the small business entrepreneur

It has now become recognised that an important catalyst to business growth is enabling entrepreneurs to compete on the public procurement market.

Government is by far the biggest consumer of goods and services in any economy. Unfortunately, most small business enterprises are locked out of the public procurement system.

However with the current financial crises causing huge job losses, the need to make it easier for small businesses to win government contracts and thus protect jobs has gained in prominence.

In the UK where just today one of the largest employers British Telecom announced 10,000 job losses, the conservative party has also put the necessity for small businesses to competitively bid for government tenders on their agenda. The party has developed an action plan that calls for Whitehall to open up the massive £125 billion government procurement budget to small and medium firms across the country.

Other small business enabling action items include calling for the scrapping of a rule requiring companies to provide three years of audited accounts when bidding for contracts. This regulation acts as a barrier to startups simply because they may not have been in operation for three years.

They are also calling for the introduction of a single questionnaire to bid for government contracts worth less than £50,000. This would only have to be filled in once and logged for future contract bids. This process would radically reduce the administrative burden involved in bidding for government contracts.

Publicising tenders by requiring that all contracts over £10,000 be published online should also increase the number of entrepreneurs who find out about such procurement opportunities.

Finally, in line with the United States Small Business Administration, the conservatives are aiming for 25% of public contracts to be awarded to small and medium enterprises. This in their view would help to overcome the risk aversion that leads many entrepreneurs to overlook government contracts.

Trade Assistant Minister Omingo Magara during the launch of preparations for Global Entrepreneurship week (slated to begin on 17th November) said that his ministry was seeking ways in which to encourage and enable local entrepreneurs to compete on the public procurement market. The conservatives action plan would go a long way in achieving this.