Why Covid-19 should change Government’s view of contracting with SME’s.
-By Ian Makgill, Founder, Spend Network.
In April the Government awarded a £108m contract to Crisp Websites Limited, trading as Pestfix (https://www.pestfix.co.uk) a small, family-owned firm in Littlehampton, West Sussex for the supply of PPE. At the time of the award, Pestfix had little or no trading history in PPE, just £18,000 in assets and less than twenty employees.
This award, and others like it, led the Good Law Project to sue the Government, in the belief that the contracting process was unfair and mismanaged, their statement is here.
What if Pestfix delivers the promised PPE in good time? At a time when every Government around the world is desperately trying to source PPE, if Pestfix manages to get hold of the PPE we so urgently need, then we should be grateful that they were able to succeed.
What’s interesting here, is that when the situation demands it, Governments are able to rely on small businesses to solve urgent problems. Under normal circumstances, a company like Pestfix would not be considered for a £50,000 contract at a local hospital, so the idea that they might satisfy a national contract in excess of £100m is just fanciful. Like so much else about Covid-19, this is unprecedented.
But the Pestfix award, and other awards, show us that Governments are able to stomach the risk of failure when they feel the need. If Pestfix and others deliver on these contracts, it will show that small companies can deliver big results when they’re given the chance.
Government procurement is notoriously hard to navigate, the process often stifles innovation and it appears to have an in-built bias towards large firms; the firms that tend to look a lot like Government itself. The reasoning behind this is that the Government needs to protect itself from risk, but as the demise of Carillion shows, big is not always better.
So here’s the challenge; if a Government department can give £108m to a small company with negligible assets during the crisis, can they, in normal times, give £108,000 to similar companies in the pursuit of competition, growth and innovation?
Covid-19 has given us a chance to learn many lessons about how we live our lives. It is also a chance for Governments to learn lessons about how they operate. One of those lessons should be that big Governments can give small firms big contracts if they want to.
The question is will they continue to do so post-pandemic?
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Cover image by MJ Tangonan