Public procurement: size matters

Size does matter when it comes to bagging Government contracts, according to small business lobby group the Federation of Small Businesses (FSB).

Research from the FSB shows that there is a direct correlation between the size of a business and its chances of winning public sector contracts from local and central Government.

According to the survey of 18,000 businesses, less than two-fifths of firms with turnover of under £25,000 have dealings with local authorities, compared to two-thirds of those with £1 million-plus revenues, with a similar story for central Government.

The FSB has made a formal approach to the Office of Fair Trading, calling for a market study and claiming that the current system distorts the public sector and contravenes the Competition Act.

The Government recently announced the launch of a national portal designed to help smaller firms bid for public sector contracts, but this is not enough for the FSB.

“Despite the numerous Government reports and initiatives, the ability of a business to win a contract with the public sector is still directly related to its size,” says Tina Sommer, FSB Trade & Industry chairman. “The time has come for the OFT to finally ensure that small firms get a fair share of the £117 billion of taxpayers’ money that the public sector spends every year.”

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