Mystery Shopper initiative exposes poor public procurement

The Cabinet Office has investigated more than 300 complaints from SMEs concerning its procurement process, with many businesses supplying to the public sector frustrated by financial requirements.


The Cabinet Office has investigated more than 300 complaints from SMEs concerning its procurement process, with many public sector suppliers frustrated by financial requirements.

Following the launch of the Mystery Shopper initiative 18 months ago, a Cabinet Office report has revealed that there have been hundreds of instances in which businesses have highlighted poor practice across central government and the wider public sector.

The reports shows that 80 percent of all cases raised with the Cabinet Office concerned the procurement process.

For SMEs this often centred around "unachievable" financial requirements that are involved in providing services to the public sector. A lack of early market engagement is also cited as a problem for businesses.

The Cabinet Office highlighted that in 38 percent of complaints, SMEs were frustrated at the "lengthy and complex" pre qualification questionnaires that they are forced to fill out. In many cases these place too much of an emphasis on financial guarantees and requirements, the department said, serving to disadvantage smaller firms involved in the procurement process.

However Cabinet Office Parliamentary Secretary Chloe Smith said that the department is doing its best to create a level playing field for smaller companies tendering for contracts with the government.

"In the past the playing field was stacked against SMEs winning public sector contracts and public procurement seemed as if it was designed to serve the needs of procureaucrats not business," Smith said.

"This Government is determined to change all that and to strip out unnecessary process from public procurement. We have made good progress already but there’s still a long way to go and in this global race our businesses need all the help they can get."

Smith added that the anonymous Mystery Shopper initiative is one of the ways in which the government is seeking to reform its procurement process, with success following the reporting of problems.

"It allows us to make sure that our work to reform central government procurement is as effective as we want it to be. And – although we can’t always directly deal with poor practice in the wider public sector – it’s great news that in four out of five cases investigated, the scheme has improved things."

"We want more businesses to use this service to raise complaints so we can name and shame the parts of the public sector still doing procurement in the clunky old-style."

Mike Cherry, National Policy Chairman at the Federation of Small Businesses, commented that  SMEs are in many cases put off by the barriers that make supplying to the government difficult.

"SMEs represent 99 percent of all businesses yet a survey of our members suggests that around 70 percent of them rarely or never bid for government procurement opportunities," Cherry said.

"As such, we welcome these efforts by the Cabinet Office to tackle procurement practices and allow SMEs to deliver value for taxpayers.

The Cabinet Office has been undergoing a major drive to shake up a procurement system which has been criticised by MPs in the past for enabling a 'cartel' of larger companies to win major IT contracts.

The government's G-Cloud project has been one of the ways in which it has sought to update the process.  In the latest iteration of the procurement framework enabling 458 SMEs to tender for cloud services alongside the larger suppliers, making up three quarters of the total number.

However the number of SMEs which are actually awarded contracts across both central government and local government has stayed relatively low so far.

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