The government has announced initiatives that it says will help double the amount of business that it currently does with SMEs by the end of the financial year.
According to a progress report published today, the Cabinet Office said that the amount of business going to SMEs across central government is on track to double from 6.7 percent to 13.7 percent by 5 April.
However, the increase is not as significant as it first sounds, as this is still a far cry from the target of giving SMEs 25 percent of government business. Furthermore, the Cabinet Office just last month revealed that it had awarded 12 percent of government contracts to SMEs at the Intellect Annual Regent Conference.
Cabinet Office minister Francis Maude said: "Today, we have shown that the measures we introduced a year ago are making a difference.
"Successful SMEs are crucial to the future of this country and can save taxpayers' money with innovative new ideas. We will now go further. We are determined to shake up public buying so radically that there is no turning back to old days of SMEs being shut out."
Making subcontracting opportunities more transparent to SMEs is one of the initiatives that Maude announced today. The government said that nine large companies – including HP, Balfour Beatty, Capgemini, Capita, Logica and Serco – have become the first to sign up to publish their government subcontracting opportunities on its Contracts Finder website.
Government IT contracts will also be more flexible in the future, Maude promised, starting with contracts for application software and infrastructure IT.
"The government is introducing set breakpoints in IT contracts so there is less money locked into large, lengthy contracts. The government will look to disaggregate future contracts and deliver flexible, cheaper solutions," he said.
The government is also exploring ways in which it can pay SMEs more promptly. For example, it is looking at structured finance to enable faster payments, and rolling out Project Bank Accounts, which are already used in the construction sector.
In addition, Maude is extending the investigative mystery shopper service. Under this scheme, the Cabinet Office will investigate all complaints lodged anonymously by SMEs about unfair practices in the supply chain of government contracts.
The Cabinet Office said that 111 out of 151 cases filed in the existing system by mid-February 2012 were now closed, with "75 percent of them resulting in a positive outcome".
Meanwhile, from April the government is launching a new online tool that will enable government buyers to engage earlier with SMEs. The portal will allow buyers to put informal postings about upcoming purchases, and SMEs will be able to respond and explain what they can offer.
The government is also planning to appoint a senior SME 'champion' in every major government department to increase the level of SME engagement.
Stephen Allott, Crown Representative for SMEs, believes the new measures will help the government make more progress this year.
"I've seen real progress. Today's announcements show that the level of commitment to the whole agenda is going even further. The government is committing to a range of innovative policy ideas, including getting SMEs to rate buying departments and hold their feet to the fire," he said.