SMEs are vital to construction tendering

The construction industry relies heavily upon small and medium-sized enterprises – firms generally with fewer than 50 employees. Such firms enrich the local community they are an integral part of and help keep the UK economy going strong. SMEs, therefore, play a key role in the UK construction tendering process. In recent years, a slew of important statistics have emerged to support the central role that SMEs play throughout the sector.

The importance of SMEs shown in statistics

In 2016, it was reported that of the 5.5 million businesses in the UK, 99.5% qualified as SMEs, accounting for 60% of all private sector employment in the country. In January 2018, it was revealed that the number of SMEs operating in the construction sector had passed the one million mark for the first time. This means that construction SMEs now account for roughly one in five of all small businesses in the UK, compared to one in a hundred in the mining, quarrying and utility sectors. The data also established that these same SMEs are responsible for turning over around £185 billion per year. The statistics convincingly show that SMEs play a vitally important role in the procurement process in the UK, particularly for construction tenders.

SMEs are key drivers of today’s economy in the UK. They provide specialist thinking, innovative capabilities and agile ways of working – often demonstrating an openness and collaborative nature which larger organisations can sometimes lack. These qualities are essential in providing the more cost-effective, productive and environmentally conscious construction required for the future.

New measures to support SMEs and the supply chain

For SMEs to continue to thrive and drive greater value across the economy, both locally and nationally, appropriate procurement frameworks need to be in place to give them a fair opportunity to win business. In its SME Action Plan, launched in March 2019, the UK Government pledged to spend £1 in every £3 on small businesses by 2022. Small Business Minister Kelly Tolhurst also announced that the Department for Business, Energy and Industrial Strategy (BEIS) will spend an additional £35 million with SMEs to level the playing field for smaller companies bidding for government procurement contracts. Work is currently being undertaken to ensure these goals are met – meaning even greater, fairer opportunities to get a slice of the construction procurement action for SMEs seeking to grow their business.

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