Contract caterers cast doubt over Government plans to help SMEs

04 November 2010 by
Contract caterers cast doubt over Government plans to help SMEs

Contract caterers have greeted with scepticism new Government plans to make its contracts more accessible to small and medium-sized businesses (SMEs).

The Government has set a goal to award a quarter of its contracts to SMEs and the Department for Business Innovation and Skills]( wants the rate of SME procurement to increase each year.

In addition, a standardised Pre-Qualification Questionnaire, developed in co-operation with the [Federation of Small Businesses](, will be introduced in December and its use will be mandatory across central Government.

While smaller operators welcomed new opportunities to go up against the big players, there were worries that the amount of red tape involved in a Government tender process, such as stringent environmental policies and multiple ISO accreditations, would remain a barrier to entry.

Tim Jones, chairman of [CH&Co](, was not convinced that SMEs would have the resources to meet all the tender requirements to compete. He said: "There needs to be a fundamental change to the whole tender process.

"It's not enough to have a standardised pre-qualification questionnaire because many operators will not be able to answer ‘yes' to certain questions and thus be eliminated at the first stage."

As public sector budgets were squeezed, another fear was that large operators with bigger buying power would lead price to be the ultimate deal clincher.

"I think we're going back to where we were a few years back, when the tender with the lowest number was more likely to win the business," said Geoffrey Harrison, managing director of [Harrison Catering](

"These are tough times. They'll be looking at the most competitive number and it's up to the operators to show that value is not necessarily the lowest price."

[The Crown Group's ]( executive, Charles Beer, said that one regulated process would bring numerous benefits, not least increasing competition and driving innovation by opening the market up to smaller entrepreneurial businesses.

"We really welcome this much-needed announcement and, while it promises much for SMEs in theory, we look forward to seeing how it develops in practice," he added.


â- A further £200m has been committed to Enterprise Capital Funds, supporting investment in high-growth potential business over four years.
â- It will work with banks on several areas, including a £1.5b Business Growth Fund, mentoring and a new lending code.
â- A new standardised Pre-Qualification Questionnaire will be introduced in December and made mandatory across central government.
â- A target to award 25% of government contracts to SMEs.

By Janie Stamford

E-mail your comments to Janie Stamford here.

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