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BEIS SME Action Plan – supporting SMEs to bid for public contracts

Although SMEs may be small, their impact is huge. The UK’s 5.7 million small and medium sized businesses employ 16 million people and account for £1.9 trillion of turnover. The SME Action Plan unveiled by the Department for Business, Energy & Industrial Strategy will unlock more opportunities for smaller businesses to bid for and win government contracts.

The BEIS SME Action Plan sets out a modern, ambitious strategy to ensure that by 2022 at least £1 in every £3 spent by the government will reach SMEs directly or through the supply chain.

BEIS is the government department which brings together responsibilities for business, industrial strategy, science, innovation, energy, and climate change. The department is responsible for ensuring the country has secure energy supplies that are reliable, affordable and clean and ensuring the UK remains at the leading edge of science, research, and innovation.

Progress so far…

  • Lean procurement – BEIS supports and adopts lean procurement principles such as the need for early market engagement and supplier days. This helps break down barriers and encourages greater SME participation and wider interest. It also helps us develop better specifications with greater confidence that our opportunities are attractive to the market and can be delivered;
  • Contracts Finder – BEIS publishes all in-scope opportunities (those valued over £10k in Core BEIS and those valued over £25k for BEIS partner organisations) on Contracts Finder. This open market approach improves visibility and makes it easier for SMEs to find the available opportunities;
  • Small Business Research Initiative (SBRI) – BEIS has been an early adopter of the SBRI procurement route, which is a scheme that allows access to companies with innovative products and ideas, that is particularly suited to SMEs;
  • Short-form Terms and Conditions – BEIS has adopted a simplified version of Terms and Conditions for its procurements valued below £100k. These proportionate and balanced terms reduce the burden on suppliers, which can otherwise discourage SME involvement;

Planned Activity

  • Improved visibility of SME opportunities – Suppliers of major government contracts (where they are refreshing their supply chain) are now required to advertise their subcontracting opportunities on Contracts Finder, so SMEs can bid.
  • Participate in consultation on prompt payment – BEIS will engage in a public consultation on using suppliers past performance record to pay their subcontractors, as grounds for exclusion from the tender process.
  • Support the Business Basics Fund – use this opportunity for small firms to work with BEIS and improve their productivity through adoption of digital tools and technology.
  • Utilising procurement pipeline – BEIS will engage with policy teams and procurement business partners using the pipeline to identify early and target opportunities most suited to SME participation.

Further actions include capturing SME successes, strategic supplier engagement, engage with Cabinet Office and a deep-dive analysis of BEIS procurement spend.

Minister for Small Business, Kelly Tolhurst said ‘This Action Plan will ensure that by 2022 the BEIS Group will be spending an extra £35 million with SMEs. As the Ministerial lead for SMEs, I will be regularly reviewing progress against this Plan and our targets, and I look forward to meeting small businesses right across the country to hear of how the Government can go even further in helping them create the jobs and opportunities on which we depend.’

For the full BEIS Small and Medium Enterprises (SME) Action Plan click here.