The Public Sector still has a way to go in attracting SMEs

• Posted on Dayle
• in Advice, Dayles Blog, Press, RICS, RICS matrics, Uncategorized
• on October 29, 2013
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The Public Sector still has a way to go in attracting SMEs – Dayle gives her opinion in this months RICS Modus magazine, The Cities Issue

As a smaller firm, we welcomed the UK government’s announcement that measures were to be introduced to promote opportunities for small business procurement within the public sector. This drive, we were told, would be across all sectors of procurement (not just construction), and aimed to benefit small and medium-sized enterprises (SMEs) – which all seemed very positive. Being granted access to the type of projects that could be delivered in a cost effective and timely manner would help SMEs reduce overhead costs and inspire growth. However, unfortunately the reality is very different. Projects are published that clearly state they are suitable for SMEs – but once you start ploughing through the Pre- Qualification Questionnaire (PQQ), it soon becomes apparent that even though many SMEs are capable of delivering the project, they will fall at the first hurdle.

A recent example is a project in the Midlands that had a total project value of £4m. The project management fees were in the region of £40,000-80,000 over a two-year period – which is well within the resources of an SME. However, the PQQ requirements stated that the applying company’s turnover had to be over £1m. It’s these figures that start to put the average SME out of the picture: to have a turnover of £1m, a construction project management consultancy would have to be engaged in construction projects with project values in excess of £100m.

So, although it appears that in-roads are being made to encourage SMEs to tender for local authority projects, the reality is that the opportunities to succeed are limited by the restrictive hoops we have to jump through. The ratio of the total contract value to the consultant’s turnover is likely to be higher for an SME than a large company, but what you get with a smaller firm is a responsive and dedicated team that will deliver what they promise within the budget given – which has to be better for the project and the taxpayer.

To read the full interactive version of RICS Modus – Click Here

Dayle Bayliss Associates offer Building Surveying, Architectural Design and Project Management Services.  Email us to see how we can assist with your projects – info@daylebayliss.co.uk