Reforming procurement must enable Welsh SMEs

Reforming procurement must enable Welsh SMEs

Wales must strengthen its procurement arrangements according to a report by The Wales Audit Office (WAO) on the state of public procurement across the nation.

The report, entitled Public Procurement in Wales, found that Welsh public sector bodies spent approximately £6 billion on the procurement of goods, services and works.

The auditors have, however, pointed out “notable procurement failures” across local public institutions in Wales.

Huw Vaughan Thomas, auditor general at the WAO, said: “Our findings are clear: while public bodies face a range of challenges in a changing procurement landscape, they can do more to strengthen their procurement arrangements and recent examples highlight the financial and reputational risks of getting procurement wrong.”

The National Federation of Builders (NFB) believes that based on the scale of the projects undertaken by larger organisations, SMEs are often overlooked in spite of the expertise and efficiency they bring to the supply chain.

Construction SMEs, in particular, train and retain two-thirds of all construction workers. In addition, for every £1 invested with an SME, 90p remains locally to train local apprentices, employ local workers, and grow the local economy.

A study by Bangor Law School into the barriers preventing SMEs from securing public sector contracts has helped bring about greater transparency in public procurement and resulted in more successful bids for SMEs.

The research uncovered a number of flaws, including evidence that public bodies in Wales were not providing sufficient tender evaluation information.

In many cases, they were not even advertising ‘sub-OJEU-level’ contracts (below £130,000), which are of the ideal size for SMEs.

Rico Wojtulewicz, policy advisor of the NFB, said: “With a third of the £6 billion procurement spend in construction; the Welsh Government has a chance to reform its procurement process and begin enabling local SMEs, who train and retain two out of three apprentices in the industry.

“Unless frameworks become more SME-friendly, Wales will struggle to make sure its investment sees sustainable economic returns.”

The NFB represents small to medium-sized builders, contractors and house builders across England and Wales.

As one of the UK’s longest standing trade bodies, it was created to represent the building profession and to help create the conditions for its members to thrive and contribute to the economic success of the UK.

Its members range from the sole trader to large, multi-million-pound construction companies, with turnover ranging from below £500,000 to £500 million.