Friday, 29 July 2011

Government and IT- "A Recipe For Rip-Offs": Time For A New Approach

Post Adrian Burns
Parliament’s Public Administration Committee has issued a damning report on SMEs’ experience in pitching for Government contracts. Time and again successive governments have favoured large IT suppliers/Systems Integrators (SIs) who have taken advantage of SMEs’ innovative input only to drop them once a contract has been secured.

The findings sit uncomfortably alongside David Cameron’s ‘Enemies of Enterprise’ speech at his party’s 2011 spring conference, where the Prime Minister slammed “the public sector procurement managers who think that the answer to everything is a big contract with a big business and who shut out millions of Britain's small- and medium-sized companies from a massive potential market.”

"Millions of SMEs shut out from a massive potential market"

Points 39 and 42 from the report are worth quoting in full.
"39. SMEs approached us informally to express concerns based on their own experiences of subcontracting. We heard of cases where SIs had involved SMEs in the bidding process so they could demonstrate innovation, only for the SME to be dropped after award of contract. In some of these cases SMEs felt that they have provided innovative ideas which had then been exploited by the larger SIs. We were also told by SMEs that by subcontracting with an SI they were barred from approaching government directly with ideas that might allow it to radically transform its services and reduce costs. This was because SIs did not want the Government to be provided with ideas that could result in them losing business, or having to reduce costs."

"42. We take seriously the concerns expressed by many SMEs that by speaking openly to the Government about innovative ideas they risk losing future business particularly if they are already in a sub-contracting relationship with an SI. The Government should reiterate its willingness to speak to SMEs directly, and commit to meeting SMEs in private where this is requested. We recommend that the Government establish a permanent mechanism that enables SMEs to bring innovative ideas directly to government in confidence, thereby minimising the risk of losing business with prime contractors."

"SMEs to bring innovative ideas directly to government"

The report should be good news for SME IT suppliers as long as there is a will to implement the report’s strong recommendations. And, while it doesn’t dwell on SMEs forming their own advantageous partnerships there are surely compelling reasons to collaborate. Not least due to turnover requirements, professional indemnity, required certifications, currency of recent experience and more.

Let’s hope the doors are opening, stay open and SMEs are no longer shut out of the bidding process.

If you have ideas for possible collaborations in the West Midlands or want to find out how Interiors & Lifestyle Futures can help you form successful bidding collaborations, please contact: Iain Acton on 0121 331 7922 or at
Navin Sood on 0121 331 7924 or at

For the full committee report please click here.