The high profile failures of major government contractors Carillion and Interserve in the last two years have placed renewed emphasis on supplier risk management in public procurement and given more weight to the ongoing policy priority of “levelling the playing field” for SMEs when it comes to competitive tendering.
Smaller operators face several obstacles in their efforts to secure business from public sector bodies: qualification requirements can be a struggle to satisfy, writing competitive and compliant bids takes a great deal of skill and effort, and taking on larger competitors is always daunting.
However, these obstacles are not insurmountable and the benefits of having public contracts in your portfolio are difficult to overstate.
The challenge for SMEs
The UK construction market is prone to cyclical fluctuations but the overall value of activity has been increasing every year since 2012, with publicly funded contracts consistently accounting for around a quarter of total construction spend nationally.
Uncertainty surrounding the Brexit process has had some impact on levels of private investment but high levels of public spend have helped to fill the gap. Huge infrastructure projects such as HS2 - as well as ongoing refurbishment and repair programmes across social housing and the education and health estates - are providing a steady flow of opportunities across every discipline from design, works, repair & maintenance as well as numerous consultancy and support services.
Any business wishing to grow sustainably needs diverse revenue streams and this is particularly relevant to SME construction contractors. With uncertainty over levels of private sector investment in the coming years along with a strong and varied flow of public sector activity, securing public contracts can help to insulate smaller companies from wider economic shocks even if their focus remains on private sector clients.
Want to know more?
General Manager at Proactis Debbie Mackenzie recently spoke to constructaquote about the state of the industry, the challenges SMEs face when bidding for contracts and how best to tackle them. Topics include:
Click here for the ConstructaQuote blog and podcast
- What is the outlook for the construction sector over the next few years?
- Will Brexit affect public procurement and tendering processes?
- What do SME suppliers need to do to prepare for their first public sector bid?
- What are the biggest challenges for SME construction companies in securing public contracts and how can these be overcome?
or listen on Spotify