In May 2003 the Better Regulation Task Force (BRTF) and Small Business Council (SBC) published a report ‘Government, Supporter and Customer’, which detailed many barriers facing SMEs when seeking to trade with local and central government. Consequently the Small Business Service (SBS), an agency of the Department of Trade and Industry (DTI), commissioned two SME Procurement Pilot projects (Haringey and West Midlands) to address many of the recommendations in the BRTF’s reports, especially in relation to researching existing good practice within purchasing organisations in opening up supply chains to SMEs. Put differently, these pilots sought to identify and assess the viability of a ‘Think Small First’ approach in public procurement.

From the evaluation of these pilots a number of key recommendations were made in relation to reforming public procurement. One of the key features of this work centred on the use of electronic procurement (hereafter eProcurement). Such techniques help to increase competition and streamline public procurement in terms of savings and money which their use allows. In the European Union (EU) contracting authorities can make use of eProcurement providing they comply with rules under the EU Procurement Directive and the EU Treaty principles of equal treatment, non-discrimination and transparency. Moreover, it makes it easier to identify contract opportunities and to supply goods and services across (national) borders; in other words, they should open up access to a diverse range of suppliers.

The link between the ‘Think Small First’ agenda and eProcurement crystallised with the creation of the Supply2.gov.uk portal by the DTI – the first port of call to consolidate access to lower-value opportunities from across the whole of the UK public sector. Supply2.gov.uk aims to open up the public procurement market to all types of business including SMEs, start-up companies and social enterprises to search and view open lower-value contract opportunities (typically under £100,000). It also offers public sector buyers the opportunity to post their lower-value contract opportunities and access profiles of pre-qualification information created by suppliers registering on the site. In short, the site aims to provide an easy-to-use portal uniting buyers and suppliers in a single location.

But the public procurement and SME issue now seems to have fallen down the government’s (political) agenda. For instance, the business simplification process and subsequent streamlining of the SBS does not appear to give any particular priority to issues related to SME access to public procurement. Moreover, whilst the Office of Government Commerce (OGC) remains the lead on public procurement policy, it is unclear how they are going to promote the SME agenda now. Similarly, the Department of Communities and Local Government (DCLG) leads on procurement in the local government sector (assisted by the Regional Centres of Excellence) but it lacks any precision or concrete polices on how the ‘Think Small First’ agenda will be promoted.

The DTI will still be responsible for the Supply2.gov site, and the main contractor - Business Information Publication solutions – remains responsible for its delivery. And whilst the site was designed to be self-funding after its first year, without the direct influence of government there are understandable concerns about its impartiality and how it will promote the use of SMEs in public procurement.

Moreover, on-going training and business support to SMEs appears to have reached a hiatus. Although South East England Development Agency (SEEDA) have agreed to co-ordinate a best practice group and to continue as lead Regional Development Agency (RDA) on procurement, few concrete measures on how the individual RDAs are taking this agenda forward can be identified.

But there are some encouraging activities that will help promote the ‘Think Small First’ agenda. For example, on-line training for SMEs on winning public sector contracts especially designed to help small businesses develop the skills and knowledge needed to win public sector contracts has been developed by LearnDirect (UfI) and will sit on their site with links to Business Link and Supply2.gov. Furthermore, the Small Business Friendly Concordat - drawn up by the Local Government Association, the SBS and the then Office of the Deputy Prime Minister – still has relevance as a voluntary, non-statutory code of practice setting out what small firms and others supplying Local Government can expect when tendering for Local Authority contracts. Moreover, the National Health Service continues to champion SMEs through its work on procurement and commissioning in the Mosaic project. In addition, there remain opportunities to develop the role of third sector groups through local compacts and, in part, championed by the Office of the Third Sector. And, naturally, the 2012 Olympics may be encouraged to open up some supply chain opportunities – not least through their own supplier database and registration system. In fact, there is still an opportunity to encourage the OGC and departments and agencies involved in the procurement processes for the 2012 Olympics to become examples of good practice in public procurement, including access to opportunities in the supply chain for SMEs.

From a public procurement point of view, then, the ‘Think Small First’ (or supplier diversity) agenda is seemingly at a critical juncture. Whether it is able to recapture the interest of government – or the wider political arena – remains to be seen; the current Comprehensive Spending Review may provide some pointers to where this agenda is going. But clearly some of the early impetus has been lost, and clarity and direction in this agenda is now required in order for SMEs to help contribute to a more effective and innovative system for (public and private) procurement.

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