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Simpler laws will open up more government procurement for small businesses

Simpler laws will open up more government procurement for small businesses

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A Procurement Bill, which will simplify four sets of laws into one, has had its Second Reading in the House of Commons. The simpler, more flexible and less complicated rules will open up more government procurement for small businesses and voluntary and community groups.

The Procurement Bill will make it easier for small and medium businesses (SMEs) to win more of the £300 billion of goods, services and works that the government buys each year.

The bill introduces new rules to help the government procure in emergency situations, such as during health pandemics, ensuring that contracting authorities can act quickly and transparently to buy vital goods.

The government says that these simpler rules take advantage of freedoms now that Britain has left the EU, as well as strengthening the Government’s ability to exclude suppliers who may have previously underperformed on government work. The rules will help exclude suppliers, both in the UK and overseas who are involved in modern slavery – further clamping down on this abhorrent practice.

The bill also confirms that value for money remains paramount during contracting, whilst also encouraging buyers to take into account other relevant wider social and environmental considerations the supplier may bring.

Minister for the Cabinet Office, Jeremy Quin, said: “We are making public sector procurement simpler, more transparent and easier to navigate.

“This bill will seize the opportunity presented by Brexit to rip up outdated rules, increase opportunities for smaller companies and deliver better value for public money.

“We are determined to deliver the best possible results from the £300 billion the public sector spends each year on procurement.

“That’s why by ending the complicated web of rules and regulations inherited from the EU to even bid for public sector work, we will ensure smaller companies are better able to bring their drive, ingenuity and innovation to government.”

SMEs

The new, more flexible rules will benefit SMEs in particular, through a number of provisions being written into the bill to lift barriers for small businesses. These include:

• Greater visibility of upcoming work, giving SMEs more time to gear up for bidding
• A new central platform showing future work in each area. This means, for example, a new SME tech firm in Lancashire will be able to search for tech opportunities upcoming in their region
• Creating one single website to register on, rather than the multiple and time-consuming systems SMEs currently have to register on before bidding for work
• Reducing unnecessary insurance costs before a supplier has even bid for a contract
• A new competitive flexible procedure, which will allow contractors to design more innovation into the process, benefiting smaller tech start-ups
• Strengthening prompt payment, so that businesses throughout the public sector supply chain receive payment within 30 days

Cabinet Office Minister, Alex Burhart, said: “We know that complex rules have long been one of the major challenges for SMEs trying to win government work.

“And while government spending with small businesses is rising, we want to turbocharge this growth.
“This bill will deliver on that, making it easier for SMEs, who make up 99% of UK businesses, to compete for and win government contracts, through smarter, simpler and more flexible regulations.”

Elizabeth Vega, Group CEO of Informed Solutions, said: “SMEs are vital for growth in our economy and vibrant local communities. They are often the largest local employers, the most active members of our local communities, and amongst those businesses most willing to invest in their local communities, train and upskill their staff.

“So, I am delighted that government is strengthening the support for this sector in its proposed reforms. In particular, placing a specific requirement on public sector buyers to ensure a level playing field for small- and medium-sized suppliers by addressing the procurement barriers that these businesses often face in competing for public sector contract opportunities.”

Emergency procurement and transparency

The bill will make procurement more transparent and effective during times of emergency, for example, a health pandemic, where government needs to act quickly to buy vital goods and services at speed.

During the COVID pandemic, the UK, along with many other countries internationally, relied on direct awards to ensure that vital supplies, such as life-saving PPE, were bought quickly and to high standards.
The new rules will bring more competition into this process, by encouraging more competitive buying in a quick time frame.

The normal tendering process takes a minimum of 30 days, which is not practical in most emergency circumstances. The bill will allow faster competition processes for emergency buying, reducing the reliance on direct awards while retaining and improving the government’s ability to act at pace in situations similar to the COVID pandemic. Clearer requirements on the identification and management of conflicts of interest for those involved in and responsible for procurement are also part of the bill.

Supplier exclusion

The bill will put in place a new exclusions framework that will make it easier for government to exclude suppliers who have underperformed on other contracts. It will also create a new ‘debarment register’, accessible to all public sector organisations, which will list companies who should be excluded from contracts. The bill will also strengthen the government’s ability to exclude suppliers from bidding for work if there’s evidence of modern slavery in their supply chain, both in the UK or overseas.
The bill shall now be committed to a Public Bill Committee.

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