Oligopoly public sector procurement to be eradicated, new government SME contract welcomed by lawyers

One of the UK's leading law firms that serves SMEs, Moore Blatch, believes that the new SME focused government procurement contract could eradicate many of the virtual oligopolies that exist in current public-sector tendering.

This is particularly evident in the IT and telecoms sector, where many innovative providers have a major impact on private sector business, both with improvements and cost reductions, but there penetration into the public sector is minimal.

The lawyers advise that currently many SMEs are effectively barred from tendering for contracts, worth up to £12 million, due to not having in-house legal resources to support a tender plus costs of employing external lawyers.

The new SME focused Crown Commercial Service contract has reduced the core terms across multiple public sector contracts, from 50,000 words to a single 20 page 'slimline' public sector contract.

Peter Jeffery, partner, Moore Blatch, comments, "We have previously seen clients spend hundreds of thousands of pounds with us, and many millions of pounds tendering for contracts which were ultimately not ever awarded. So, while not technically barred from tendering for public sector contracts, many medium sized SMEs are effectively barred, due to resources and costs associated with the process. As a result, a virtual oligopoly exists for many services.  Plainly wherever this is the case best value is not necessarily always achieved.

“This new contract is both flexible and customisable and should make it much easier for SMEs to apply. While external legal support is likely to still be necessary, this should open up the market for many of our clients."