Recent procurement guidance has focused on levelling the playing field. Not only does the government want all public spending to bring the nation closer to its environmental, social, and economic goals, but they also want a diverse, inclusive range of suppliers to get us there.
It’s why they introduced the minimum 10% social value weighting with PPN06/20. This allows smaller suppliers to put up a good fight in competitive contracts. But recently, criticisms of the guidance claim it has had the opposite effect. Jacob Rees-Mogg suggested it excludes smaller suppliers, as they can lack the resources and experience to fully measure their social value.
The truth is that SMEs won’t always have the expensive social value calculators, impressive manpower, or national experience of larger suppliers. But being an SME does bring its own unique benefits. So today, we’re exploring three ways being an SME offers you a competitive advantage during the tender process.
You’re already having a local impact
Social value in construction is all about improving a project’s local area. Let’s say there’s a contract to build a bridge in Bristol. To win, suppliers might have to target Bristol’s homelessness, low employment, or rising emissions. And it’s going to be a completely different beast to those same issues in, say, Derby.
As a local SME, you’re already embedded in a project’s community. You know the area’s most pressing issues and opportunities. And there’s a good chance you’ll already be doing a lot of work towards solving them.
A large supplier from Newcastle is going to have to do extra work to propose relevant initiatives nearby. But as a small local business, you could already be boosting employment by hiring locally. Other initiatives you’re doing – such as minimising waste or choosing low-emission equipment – will also be impacting the local community. And that’s before you even win the contract.
Larger organisations will have to tweak their approach and priorities as they bid for projects across the country. But as an SME with a local focus, you just have to scale up the great work you’re already doing. And while they can only hypothesise about how they will help, you already have the evidence to back your claims up.
Long-standing, local relationships
SMEs have a broad network of local relationships. Whether it’s from previous partnerships, projects, charity sponsorships, or your daily operations, you’ll have a lot of people and experiences to lean on. And these will allow you to keep your ear to the ground about local issues and developments.
Maintaining these relationships will provide a much deeper, more nuanced understanding of local needs. And this will result in more responsive and relevant tender responses. You’ll also have other local businesses you can work with to design and deliver projects, further diversifying the supply chain.
National or international suppliers lack this level of insight and connections. And it would take considerable time and resources for them to replicate it for each tender.
Buyers want suppliers they can count on. Suppliers who are able to deliver on their commitments. And to build this trust, suppliers need to maintain visibility of their activities and outcomes.
With fewer projects and initiatives to keep track of, it’s easier for SMEs to maintain visibility of their full impact. Something that can be a logistical nightmare for large national suppliers.
Even with powerful social value software, large contractors can struggle to track and report every single outcome of every single action. They’ve got projects dotted all over the country. And hundreds of activities to track on an ongoing basis.
Meanwhile, smaller suppliers will often have a closer-knit team operating in one area. As such, it’s simpler to measure, manage, and tweak your impact to ensure you’re always hitting a project’s deliverables. Rather than opting for quantity, you can focus on high-quality measurement and reporting. Take the time to build the full picture of your impact to establish trust with buyers.
There’s a long way to go before government procurement becomes fully accessible to suppliers of all sizes. But there’s a significant competitive advantage SMEs already have over their larger counterparts. It’s by leaning into these social value strengths that you can craft more relevant, localised bids and stand out amongst your competitors.
Impact puts all your social value data in one place. With decentralised data capture, automated conversions, and ongoing contract management, it’s never been easier to show buyers all you have to offer. To find out more, schedule a demo or get in touch with the team on 0161 532 4752.