GPS SME’s & Growth Action Plan 2012 - 2014

1. GPS SME’s & Growth Action Plan 2012 - 2014 Obtaining full value from SME Suppliers for the Taxpayer Version 2 Dec 12

2. FM & Property Services Strategy: Replace and Grow FM & Property frameworks The focus is to develop a new contracting vehicle over the next 18 months for CG & WPS to procure FM services which will capturing Total, Hard, Soft and Specialist FM adopting principles of GCloud and dynamic procurement. This will significantly increase opportunities for SME’s to participate and provide services directly, rather than on a ‘2nd or 3rd tier’ basis within the supply chain. Adding specialist lots to future frameworks or reducing the scope and developing a broader range of smaller frameworks (i.e. Building Materials) to encourage SME engagement will be considered for all procurements. Current SME Landscape: 10 % Future Impact: Forecast increased SME business on a range of 15-25 %. It is our aspiration to grow the number of SME’s participating through new frameworks agreements as ‘tier 1’ suppliers by devising lotting structures for frameworks that will cater for large suppliers and more specialist providers that are typically SME’s.

3. Professional Services Health Strategy: Meet NHS Requirement Through Local & National Companies New frameworks in the Medical Locums, Agency Nursing and Allied Health Professionals market are being competed to provide increased access giving opportunities to suppliers and choice for customers. The frameworks for Medical Locums and Allied Health each has the option for the NHS to employ Neutral Vendors to manage their supply chain, closely managed by GPS contract management to support SME relationships where at least 25% has to be in support of the SME agenda. SME’s can be added at any time, subject to meeting the NHS Employers guidelines and other legal requirements. The current Non Medical/Non Clinical framework has 180 suppliers contracted where 75% of the suppliers are SME. Two new frameworks are also being planned which are new to this category; Managed Staff Banks and DVLA Drivers Tests presenting additional opportunities for suppliers in these areas. Current SME Landscape: 39.1% through tier 1. Over 70 % including supply chain. Future Impact: Improved relations between the NHS, master vendors and SME suppliers through robust terms and contract management.

4. Energy Strategy: Stabilisation, Development & Innovation CG mandation, data stability, robust risk & governance controls are key to this strategy. The Category plans to introduce self-serve, Lean data systems to remove reporting and administration burden. Diversification of the buying strategy will support Growth – particularly for SME’s. Moving away from the wholesale market, spreading purchasing to include new power suppliers. Currently the majority of the £1.8b spend in Energy comes through 3 suppliers. The Energy for Growth project means we will buy longer term, engage with existing/new SME’s, move into new power generating facilities such as wind, waste and other renewable energy, boost the energy market, support stalled projects, meet carbon emission targets for renewable energy, create a more geographically diverse energy supply and provide ability to identify originators of supply Current SME Landscape: 1 % Future Impact: Forecast increased SME business on a range of 1 to 25% of £1.8bn spend at today’s prices – therefore up to £450m p.a. although this will likely not be until 2014/15 and subject to variables.

5. Professional Services Strategy: Revise procurement strategies to encourage an Agile Marketplace. New frameworks in the consultancy and contingent labour category are being competed to provide increased access to opportunities for suppliers and choice for customers. For Consultancy requirements < £100k or >£2m departments will run competitions through the open market providing more opportunity to SME’s. Legal Services will also be procured in a similar way for requirements < £100k or >£500k departments will run competitions through the open market. Contingent Labour will be awarded to a single Neutral vendor who must compete 80% of business via the dynamic supply chain. SME’s can be added at any time. Payment throughout the supply chain is on back to back terms. Two new frameworks are also being competed which are new to this category; Insurance Services and Debt recovery offering new opportunity to engage with the Public Sector through a centralised approach. Current SME Landscape: 8 % Future Impact: Forecast increased SME business by a range of 10 - 20% as departments must adhere to the agreed strategy when procuring these services and not maintain relations with larger companies.

6. Fleet Strategy: Standardisation & Aggregation. Across the Fleet market there are many opportunities  for SME’s to actively participate  in Public Sector Fleet business. Fleet frameworks support this inclusion whether as direct suppliers or via the main contractor . It is anticipated that the conversions framework due to be let QTR 2 2013 will see many SME’s successfully tender across the 7 lots . There is also a newly created  opportunity  for SME’s to take part in e-Auctions for Vehicle Leasing . The Vehicle Purchase framework allows all customers to nominate their local dealer for both delivery and after sales service and maintenance, thus promoting local SME’S. Similarly Hire and Tyre providers can only fulfil their Nationwide Service provision by subcontracting to SME’S . In addition to supporting inclusion of SME’s Fleet frameworks also provide a choice of vehicles which help departments meet carbon reduction targets , offering the zero and low carbon options and encouraging growth and development of these types of vehicle in the marketplace. Current SME Landscape: 8 % Future Impact: Forecast increased business with SME’s to a range of 18 – 22%

7. Travel Strategy: Centralisation Through Key Suppliers. The centralisation of travel management services offers opportunities for SME’s and represents a significant change to the way this service has been delivered in the past with a significant shift to online services. It highlights the potential influence that GPS can exert in markets in order to deliver on the Growth agenda. The Central Government Travel Management Services (CGTMS) framework has 2 suppliers, 1 of which is an SME. Meetings and Events management has also been awarded to an SME. These suppliers 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. Further opportunity for SME’s in this market will be offered through future procurements for the provision of travel management for the Wider Public Sector. Suppliers on the current frameworks run regular competitions (RfP’s)on behalf of GPS to continuously improve the offering and providing further opportunity for tier 2 suppliers to be engaged. This widens the benefits of the framework to the customer, for example, through the increased availability of improved rates, new hotels, or air routes and fares. Current SME Landscape: 32 % Future Impact: Forecast increased SME business by a further 10 – 20 %

8. Communications Strategy: Centralised Agile Route to Market. The supply market to the Communications Category has a high degree of SMEs.  GPS is engaging with trade associations in advance of launching invitation to tenders to understand how we can make it easier for SMEs to tender for government business. In addition to framework agreements GPS has developed a route for requirements below £100k called the Agile Route to Market (ARM) which is an online service where communications businesses can quickly and easily compete for government business. 335 suppliers are registered in ARM, with 230 (69%) SMEs. Through ARM we will gather information relating to pitch/award ratio and feed this back to SMEs so they can improve their future offering. Future framework tenders will have a reduced number of questions and simplified requirements. Consortia bids will be encouraged and will use standard rate card pricing which benefit SMEs who have lower overheads and operation costs. Current SME Landscape: 78 % Future Impact: An increase to 80 - 85 %. The award of the new communication frameworks will see the 78% increase over the next 12 -18months.

9. Office Solutions Strategy: An Agile Market Place offering. The Dynamic Market Place for print provides a complimentary route to market to service sub OJEU/low value basic print requirements for Wider Public Sector (WPS) customers. This route provides easy access for suppliers including small agencies and sole traders as it reduces the cost and time burden on suppliers when competing for government business.   • Lot 4 of the new Multifunctional Devices Framework provides regional coverage in order to be attractive to the SME market. Of the 14 successful suppliers on Lot 4, eight are SME’s (57%) which accounts for 43% of successful suppliers across all 4 Lots. • Current SME Landscape: 8 % • Future Impact: GPS are working with organisations to facilitate regional or SME agendas through the Framework and working with tier 1 suppliers to on-board SMEs or local suppliers to utilise further in their supply chains to increase future engagement by 10 – 15%

10. Office Solutions - CG Strategy: Simplify processes to encourage SMEs and, through continued application of SRM, grow SME (indirect) spend within the supply chain. • In the Courier, Print and Office Supplies market opportunities are currently mainly for SMEs within the supply chain. Work is underway with key suppliers to optimise spend with SMEs in their supply chain: • Office Supplies (c£30m) – supply chain contains c53% SMEs accounting for c40% of contract spend (CG & WPS) • Print (c£30m) - supply chain contains c75% SMEs accounting for c32% of CG Spend (40% targeted by FYE). • Dedicated Courier Network, HMRC & DWP (c£20m) – supply chain SME spend is c42%. Current SME Landscape: 0 % direct - SME engagement is currently at Tier 2. Future Impact: Increase direct spend with SMEs through National and Seasonal Courier Frameworks (c£5m) and continue to optimise spend with SMEs at Tier 2. Achieve 10% (direct and indirect spend) with SMEs across all category spend by FYE. 10

11. ICT Strategy: Joined Up Vision & Execution Across Government. Historically ICT Goods & Services have been procured through large Tier 1 suppliers. Recent strategy has focused on the need to engage new and innovative suppliers to Government. This has necessitated more agile routes to market and lotting strategies. For example the simplification of procurement process for G-Cloud: a vastly simplified procurement process has allowed over 450 suppliers to win a place on frameworks (circa 75% SMEs), allowing them to offer innovative and often niche services to government for the first time. A recently formed SME, Skyscape has won the contract with GDS to host the .gov.uk website. Over £2m has been spent through G-Cloud in the six months to the end of September 2012 and nearly 45% of this spend was with SMEs. G-Cloud is due to be refreshed before the end of 12/13 and the documentation has been further simplified. Current SME Landscape Hardware: 6 % ; Software : 8 %; Network Services: 10 % Future Impact: Adoption of Cloud Services across the public sector will increase spend with SMEs, in all ICT commoditised services areas by 8%

12. General (i) Strategy: Making procurement quicker, accessible and less costly through simplified processes. • Over 50% of the suppliers we have engaged with since 2010 are SME’s and proportionally spend has increased through SME’s. Some examples of how we encourage and strive to improve upon this are: • 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.

13. General (ii) • 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 and to provide Departments with data to evidence to report against their own SME targets. Supporting UK growth is of great importance to GPS. Through the frameworks we let and manage and the way we compete requirements through agile market routes, GPS can contribute to a number of drivers for growth by changing our approach and focusing on emerging players and new markets, which may have a relevance for the Public Sector. Proactive supplier engagement has been clearly defined by GPS as a pre-OJEU activity.

14. General (iii) Current SME Landscape: Spend through GPS with SMEs in the financial year to the end of October 2012 totalled over £581m; (CG £189m, WPS £392m) 11% of total to date compared to an 11/12 baseline of 9.5%. Future Impact: SME spend by category will be identified and targets set to further increase SME engagement and growth.