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Gov: Half of new tech spending must be made with SME suppliers

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The UK government is trying to accelerate procurement reforms and hit ambitious targets by directing at least half of all new IT spending to small biz suppliers before the next general election.

One of the grand aims of the Cabinet Office had been to route 25 per cent of all government IT business through SMEs by the end of fiscal '15, but as of last March the figure stood at just 10.5 per cent.

"Our ambition is that at least 50 per cent of spend on new government IT flows to SMEs directly and in the supply chain," the Cabinet Office stated in a report Making Government Business More Accessible to SMEs [PDF].

It pointed to the abolition of pre-qualification questionnaires for contracts under £100,000 and the launch of the Contracts Finder service that allows SMEs to locate business more easily, as success stories for SMEs.

The majority of government business, however, continues to go through a select band of mega suppliers - multinational integrators and tech vendors.

The report revealed spending with SMEs, as a proportion of total spend, increased across 12 departments but went backwards in four, including Culture, Media & Sport; Work & Pensions; Justice; and the Home Office.

Programmes such as G-Cloud, now housed within GDS, were designed to level the playing field for SMEs. Yet the speed of progress has been slower than government would have liked. Public sector buyers have found it hard to break their old habits.

That said, the raft of the contracts that make up the majority of central government's £7bn annual IT spend are up for renewal at the end of fiscal '15 and government says it has lifted "barriers to entry".

"Competition in procurement will be encouraged with no like-for like extensions to existing contracts. Programme will be disaggregated for commercial purposes - broken down into components supported by the market to enable many suppliers to bid," the report added.

Outside of the traditional public sector procurement process, the government will set up a Solutions Exchange this summer as a platform for SMEs to pitch proposals. ®

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