Government Procurement Service Webinar : Helping SMEs to win more Government business

1. Government Procurement ServiceWebinar:Helping SMEs to win more Government business

2. Stephen AllottCrown Representative for Small and Medium Enterprises, Cabinet Office

3. The Coalition Agreement “We will promote small business procurement, in particular by introducing an aspiration that 25% of government contracts* should be awarded to small and medium-sized businesses and by publishing government tenders in full online and free of charge. “ May 2010 Chapter 2 – Business * Central Government, by value including both direct spend and in the supply chain UNCLASSIFIED

4. The Prime Minister’s speech 11 February 2011 “Today, we are announcing big changes to the way government does business.” “No one should doubt how important this is.” “It’s important for getting to grips with our deficit – as it will help us tackle waste and control public spending.” “...the system doesn’t encourage small and medium-sized businesses, charities and social enterprises to compete for contracts… …the very firms who can provide the competitive pressure to drive down costs.” “.... wherever possible, we’re going to break up large contracts into smaller elements, so that SMEs can make a bid and get involved” UNCLASSIFIED

5. Steve Guy Director of Sourcing and Category Management

6. GPS Spend with SMEs - Overview % suppliers by supplier classification % spend by supplier classification • SMEs as the prime supplier - % GPS spend increased from 10% (£0.8bn) in 2011/12 to 11% (£0.6bn) in 2012/13 YTD • GPS prime suppliers who are SMEs - % has increased from 48% (675) in 2011/12 to 51% (803) in 2012/13 YTD • Spend with SMEs varies across different markets, with some categories, such as Communications and Professional Services being more open to expenditure with SMEs in the first tier of the supply chain • Other markets, such as Energy and Estates will employ SMEs in the second and third tiers of the supply base. SME % 2011/12 spend by category and supplier classification TBC % 2012/13 spend by category and supplier classification Non SME SME SME TBC TBC Non-SME Non-SME

7. GPS Spend with SMEs - Overview Location of spend by ultimate parent in 2011/12 £1bn Unknown Just over 60% of GPS spend is with organisations whose ownership is within the UK £5.3bn in UK £1.0bn in Europe £1.1bn in ROW

8. Challenges • Effort required to bid for framework inclusion may not be rewarded with any forthcoming business • Too much duplication on Frameworks • SME’s need to review the time and effort utilised during the bidding process vs the potential return – and drop out if the numbers don’t add up • ICT moratorium • Ability to provide goods and services across the UK • Previously onerous Public Sector T’s & C’s and ownership of risk • Poor visibility of opportunities • Understanding of complicated Public Sector procurement process

9. Initiatives • Utilisation of LEAN to reduce bureaucracy and eliminate waste. • GPS SME & Growth Category Champions appointed to ensure each strategy and procurement is SME friendly. • Joint working with Cabinet Office to develop an SME & Growth portal to encourage collaboration and innovation. • Implementation of proportionate financial and commercial contract terms. • Appropriate lotting strategies such as those incorporated within recent procurements. • Hosting SME supplier days and webinars. • GPS Spot Buy function is aimed at procuring sub-OJEU goods and services for departments. The value and speed of these procurements makes them highly attractive for SMEs and to date 25 SME’s have been awarded contracts valuing £1.5 million. This equates to 71.4 % of the Spot Buy contracts awarded. On average these procurements take 15 days from advert to award reducing bidding overheads for suppliers. • Develop procurement guidance and best practice for SMEs and customers. • There are some opportunities coming up in the Transport sector – lots have been designed to better accommodate SMEs • Transport will maintain a ’community of interest’ of bidders following award

10. Initiatives - Continued • GPS regularly publishes a forward pipeline of procurements, including updates and contact details • Develop links to BIS Small Business Research Initiative (SBRI) • Develop links to HMRC Enterprise Investment Scheme (EIS) • Guidance is to be offered to SMEs on the creation of consortia. Pre-OJEU market engagement aimed specifically at SMEs is formally included in all Pre OJEU Implementation Plan activity. • Revised Terms & Conditions to include “boilerplate” and optional terms. • Introduction of Webex is planned as standard for providing guidance on procurement and submission of bids. • Monthly SME & Growth reporting is in development to allow GPS to report on its own performance by Category and to provide Departments with data to evidence to report against their own SME targets. • Proactive supplier engagement has been clearly defined by GPS as a pre-OJEU activity.

11. Initiatives - Timescales

12. Carol Holroyd Head of Sourcing & Category Management -  Professional Services, Health

13. SME Suppliers Summary Health and HR Business Services Frameworks in FY11/12 • The Health and HR Business Services Category Team is responsible for 14 procurement frameworks for the public sector • The table below outlines the major spending frameworks that were being widely used in the last full financial year FY11/12 • There are 4 major frameworks for the provision of temporary labour for the NHS and Wider Public Sector; Non Medical-Non Clinical, Agency Nursing, Medical Locums and Allied Health Professionals. Combined, the spend values on the framework were £705M for the full year. • There are also 2 major Business Services Frameworks; L&D and Legal Services that has a combined value of £35M for the full year Source: GPS BI Data Pivot Jan 13

14. Initiatives – Timescales: SMESuppliers • There are 4 key areas that the Health and HR Business Services team recommend that SME companies could work with adopt to grow business share across its major frameworks. • Whilst these 4 key areas are not entirely new, it is surprising how many suppliers DO NOT engage with GPS or its Hub partners in identifying available data and opportunity to win business. • Our advice is that if you have a good robust business plan, complete with suitable performance KPI’s, then GPS will willingly work with you to develop the plan and provide data and contacts where most appropriate

15. Ross Kellett Head of Sourcing & Category Management  - Travel and Fleet

16. Travel Central Government Travel Management Service (CGTMS): History & case study • The fragmented supply base, commercial contracts and departments spend were aggregated to a new central approach which was initially thought to potentially exclude SMEs due to the larger aggregated size of spend. • The new travel strategy aimed to get better value for money by changing the way government customers booked travel. • A key element government’s new strategy was a major shift from offline to online booking services which created a new opportunity for SMEs. • The CGTMS framework has 2 suppliers, 1 of which is Redfern, an SME. This contract was “game changing” for Redfern. Redfern and the Procurement Process • Look for opportunities - Pre OJEU • Market Engagement • Efficient Procurement Processes • Effective Bidding / Attention to detail • Further Opportunities - Be active in the Supply Chain Redfern will need to grow to meet the demands of these public sector contracts potentially taking them out of the SME space and GPS work closely with them to help transition

17. Paddy Howlin Head of Sourcing & Category Management - Property

18. Pre-market engagement activity with industry prior to commencing all procurement exercises. Core activities include: • Notification to market that we intend to deliver a new framework solution via Prior Information Notice in OJEU; • Market sounding events to share initial thoughts/strategy and work with industry and stakeholders to develop and scope out • full requirements; • Engage with suppliers on a 1:1 basis to capture views/industry insights • Share proposed/draft specifications and terms & conditions of contract and seek views and input from industry. • Publish documentation and proposed timescales so industry can prepare and provide views and thoughts in advance of a • formal procurement exercise commencing; • Approach also inform and familiarise industry with emerging requirements, whilst enabling suppliers to help shape and build category strategies for Government procurement. • Reviewing all procurement strategies to see how we can effectively deliver efficiencies and value for money via framework solutions i.e. revised lotting structures or developing separate frameworks where commercially it is practicable to do so. • Example: • Proposed procurement strategy for Facilities Management is to develop a framework with specific lots (i.e. Hard, Soft, Catering and Specialist FM services) to increase opportunities for specialist and regional/local providers to participate on a new national framework from April 2014. Strategy will be developed via pre-market engagement activity during 2013/14.

19. Marie-Helene Durif Head of Sourcing & Category Management - ICT

20. GCloud – SME benefits/opportunities • The G-Cloud framework is an innovative procurement route to allow public sector customers to procure Cloud-based ICT Services • The simplified procurement process of this framework has allowed 462 suppliers to provide a catalogue of their offering accessible through a single Portal by all public sector bodies • 350 (75%) of the 462 suppliers on the G-Cloud framework are SMEs

21. Why is G-Cloud so different from traditional frameworks? At Tender Stage: • No pre-qualification stage used for G-Cloud • Award to all qualifying suppliers – not just a top-sliced pre-set number. • Not the typical host of ‘qualitative’ questions requiring essay answers at tender stage. Most questions require a Yes/No type answer. • Previous artificial barriers such as high financial standing and evidence of past experience were all removed. • T&C’s much reduced with almost everything stripped out reducing the complexity for suppliers and making easier to understand. • Suppliers are able to use own terms as part of call-off, not forced to take on onerous government terms. • Opportunity to participate in G-Cloud heavily publicised: Apply camps held to encourage and show suppliers how to participate, use of social media to further communicate.

22. Why is G-Cloud so different from traditional frameworks? • During Operational Phase: • Suppliers are in control of their catalogue entries at all times • Suppliers do not need to respond to lengthy tenders at call-off as customers can procure straight from the G-Cloud catalogue • Existing information such service descriptions can re-used in next iterations of G- Cloud frameworks • Rollover option for next procurement – no need to fill out documentation again if services remain unchanged

23. SME Tips – How to make the most of G-Cloud • New suppliers not on G-Cloud • Get DUNS number (needed for steps below) • Register with GPS eSourcing suite (via GPS website) needed to take part in Tender • Register with GEM Dynamic marketplace – needed for catalogue maintenance • Think about your pricing and product positioning – view Cloudstore to see what other suppliers have done. • Existing suppliers • • View your cloud catalogue entry and supporting documentation with a critical eye from a customer perspective, does it make sense, is it easy to read and understand, are the key elements of pricing, price bands, service levels etc easy to find ? • • Consider use of tables and diagrams to convey above information. • • Ensure everything is transparent, in particular pricing and service elements. E.g. do not quote 1 price and expect a customer to pay more for critical components of the service you haven’t mentioned.

24. SME Tips – How to make the most of G-Cloud • Dealing with customers • • Remind customers they can view guidance on the gcloud.civilservice website. G- Cloud iterations are OJEU compliant frameworks and are legal • • There is no upper spend limit on G-Cloud other than the estimated capacity set at OJEUtime of £100m. • • All public sector bodies can use the framework; quick rule of thumb is if the customer is public funded or (for charities) provides citizen services then can probably use G- Cloud. • Dealing with GPS • • Management Information returns are vitally important for GPS to track progress of implementation of Cloud-based services within Government (returns due monthly on the 7th of each month). • • GPS are always keen to hear about success stories, particularly those involving a customer saving money, and would like to develop case studies with your input.

25. Questions?