Government consults on 'single market' principles for public procurement

New ‘single market’ principles for public sector procurement have been put out for consultation by the Government as part of plans to improve access for small and medium-sized enterprises (SMEs).

The consultation paper said: “These principles should simplify and standardise the advertising, bidding and payment of public contracts, and should remove the complexity, cost and inconsistency when trying to sell to more than one public sector body.”

The principles would also apply to businesses as direct contractors with government and as sub-contractors or partners in a procurement supply chain.

The reforms cover three areas:

• Pre-qualification: eliminating the use of pre-qualification questionnaires (PQQs) for low value contracts; mandating a core PQQ with standard questions for relevant high value contracts (the government would legislate to extend this to the whole of the public sector); and allowing suppliers to provide PQQ data only once (via a single online platform).
• Transparency: ensuring all new contract opportunities (above £10,000) and contract awards are advertised online via the Contracts Finder site and the public sector reports its performance on spend with SMEs and centrally negotiated deals. Public bodies could be required to ‘comply or explain’ when choosing whether to use alternative procurement routes to centrally negotiated deals.
• Payment and finance: ensuring contractors pay their suppliers on time; consideration of whether performance bonds can be an unnecessary barrier for SMEs; and encouraging the use of e-invoicing in the public sector.

The consultation paper said that historically SMEs had been “shut out of government business and have found bidding for public sector contracts excessively, and sometimes prohibitively, bureaucratic, time-consuming and expensive”.

It claimed that, since 2010, there had been considerable progress in central government and many other parts of the public sector in opening up the procurement process to SMEs, and these latest reforms were intended to built on that improvement.

Earlier reforms included the removal of PQQs for almost all central government contracts below £100,000. “Lean procurement methods have also stripped out unnecessary waste from the procurement process and reduced timescales delivering benefits to public authorities and the businesses that bid for and win contracts," it was claimed.

The consultation paper, including the proposed PQQ core questions, can be viewed here. It runs until 17 October 2013.

Cabinet Office Minister Chloë Smith said: "With £230bn per year spent on goods and services right across the whole public sector, government wants to seize the opportunity to help hard-working SMEs get on by competing for and winning this business.

"Removing barriers and setting out a consistent, single set of SME-friendly principles for the whole public sector will provide the right support to encourage significant business and growth opportunities for SMEs, and help give the UK a better starting position in the global race."