Comment: Seizing public contract opportunities

The last quarter of the year can often present a period of angst and stress for those running a business.

Debbie Mackenzie is general manager at Proactis. Picture: Contributed
Debbie Mackenzie is general manager at Proactis. Picture: Contributed

It’s a time when those responsible for ensuring their organisation is on track to meet year-end targets will be scrambling to fill the gaps to end the year profitably but also to ensure a healthy start to 2019 and beyond.

However, there is one way businesses, particularly small and medium-sized enterprises (SMEs). can look to plug the gap. This is to consider bidding for public sector contracts. As an organisation that runs a tender alerts service, we see a spike around October and November for the release of public contracts.

Sign up to our daily newsletter

Unfortunately, many Scottish SMEs still do not recognise the value in public sector contracts.

They often feel that they’re out of their reach and that there’s not much value in committing dedicated resources to trying to win this type of business.

When we consider that there’s potentially work worth £11 billion available a year in Scotland, it seems odd that more SMEs aren’t considering this revenue stream as an option to make up their bottom lines.

You only need to look at the stats to see the value in this. The Scottish Government reported in May that almost 80 per cent of public sector contracts are now awarded to SMES. In 2017/18, of the 22,000 contracts advertised through Public Contracts Scotland, 17,500 were awarded to SMEs, of which 13,500 were Scottish.

The main reasons SMEs give us for not bidding for government work are that they feel the process is too confusing and time-consuming and they feel larger corporations have a better chance of winning.

However, when you consider the opportunities that could be missed as well as Brexit approaching, now is a great time for SMEs to rethink their approach and start looking at such contracts as a new revenue stream.

Our observation of public contract notice data from 2014 to 2018 found that, although March and June remain the traditional “busy months” of the year for new tender notices, there is also a noticeable “late year surge” in October and November across the country’s public procuring bodies.

These contracts offer opportunities in a range of services and sectors, from stationery to construction.

The Procurement Reform Scotland Act, introduced by the Scottish Government in 2014, and similar moves in other parts of the UK have demonstrated that there is real appetite from within government to use smaller organisations and to buy locally where possible.

Smaller firms must realise that they’ve never been more empowered to seek out and secure public contracts – and should not forget that they often possess certain advantages over larger organisations, such as being more flexible and having a deeper understanding of local nuances.

- Debbie Mackenzie is general manager at Proactis