Technology SMEs could comprise more than 25% of government business, Cabinet Office minister Francis Maude has said.
Speaking at the Better Deal for Small Businesses event, he said the ICT sector could exceed the government’s target to have one-quarter of public sector contracts from small businesses.
ICT will also become the first sector to introduce caps to limit the size and duration of contracts, with the government introducing set breakpoints to prevent large amounts of money being locked into lengthy contracts.
He said the government was committed to making IT contracts more flexible, starting with application software and infrastructure IT. Government departments will be judged by smaller businesses who will individually rate them, the Cabinet Office will be the first to do this in May.
Maude said the government was on track to double the amount of SMEs doing business with it, from 6.7% to 13.7% by the end of the year. “Doubling the amount of business going to these companies is no small feat but we will now go further. We are determined to shake up public buying so radically that there is no turning back to old days of SMEs being shut out.”
Nine large companies have published their subcontracting commitments to small businesses, including HP, Capgemini, Capita, and Level 3.
Stephen Allott, crown representative for SMEs, agreed that technology small businesses could constitute more than the 25% of the government’s target because of the innovative nature of the sector. “Technology is so fast-changing and things like the CloudStore are revolutionising things so procurements can be done in a day,” he said.
Liam Maxwell, director of ICT Futures, who controls all IT spend over £5m, said the key task would be to disaggregate large contracts.
He said in the future contracts would last no more than 12 months. Previously IT was prohibitive to SMEs as it required large capital investment, but routes to procurement through the CloudStore will change that process, he said.
“It means companies can work on what they are best at and don’t need massive capital to get involved or huge development contracts.”
The news follows recent comments from Chris Chant, G-Cloud programme director, that system integrators sometimes charge more in paperwork to write a report on IT options to government than SMEs have quoted to provide those same services.