Each year British business bid for and secure up to £140bn of Public Sector contracts. However, many SME's rarely consider this market opportunity believing that larger corporations can be more competitive due to economies of scale.

Recent changes in the Public Sector arena and directives from Central Government are now making it possible for the smaller service providers to compete with the big boys and effectively 'Punch above your weight'.

Many small companies are familiar with the difficulty of competing head on with an organisation 10 to 100 times your size. A little like David and Goliath. Respectively, whilst the urban myth reports that 'Nobody ever got fired for hiring IBM' many SME's would never go into a bid situation if they knew they were up against IBM. Until now, perhaps.

This is a frequent and sometimes insurmountable problem in the Private sector, which leads to SME businesses walking away from the table and not bidding for contracts that, if they won, they could quite easily deliver given the opportunity.

Radical changes and a shake up within Local Government means that the SME can now be competitive in one of the largest sectors of the economy. Recent changes in attitude and philosophy has moved the goalposts on the IBM's of this world and the smaller local supplier is now able to structure a successful tender bid on a series of criteria other than merely price.

The Byatt Report published a couple of years ago reviewed how the Local Government Sector spent taxpayers money and the effectiveness and value they received in return. This report concluded that by initiating a "Best Value" program within the sector (which essentially enabled the decision making process with regard to the award of contracts) to be changed from the historical "cheapest price get the contract" to an environment where price is considered in association with a number of other "value" based judgements. As a result, the larger organisation is no longer seen as the Goliath of the past.

The relevance of these "value" based judgements can vary between Authorities and can be as little as 5% or as much as 60% of the decision making process. This effectively means that an SME that can demonstrate that it adds real value, could still win the business even with a higher priced tender bid.

Value is a fairly loose descriptor but its relevance in winning new business in the Local Government sector is easy to understand, whether or not you can have the edge in the value stakes against the IBM's of this world.

The big advantage the smaller supplier can use in any tender process is a combination of the ability to provide the service coupled with the added value of being a local business. This may include: * You are a business ratepayer for the Local Authority you wish to contract to.

* You are a local employer.

* You support an equal opportunities initiative.

* You are a local 'Investor in People'.

* You have received Government funding (Business Link, DTI, etc) to set up or develop your business in the local area.

Every local authority has an interesting ingredient that you do not see from the private sector, that of the political overlay of the elected members of the authority. There is a huge desire, across all political parties and encouraged by central government to support and grow the local SME business community.

The simple fact is that is very much helps the Authority to spend its money in the local community, enabling growth, providing more jobs, and generating more income and avoiding supporting business that are failing. This political overlay enables procurement officers within the Local Authority to attach a lot a value in considering the award of new contracts, so do not underestimate the advantage you may have.

All Local Authorities will have a website where available supply contracts are posted. There are also a number of online journals that publish upcoming tenders across the country, however, you need not respond to the tender if you do not wish to. Use this opportunity to assess the level of detail required to structure a tender bid.

One current initiative that is underway focuses on engaging the business community with the 'Local Government Online'. The goal of this project is, by this year, to be able to communicate with suppliers electronically via the Internet to place orders and make payments. This initiative will also have the effect of opening up far more opportunities to companies that have not worked within the government sector before. More information can be found at www.localegov.gov.uk.

Finally, the moral of this David and Goliath story should be to ensure that as an SME and a Business Rate payer, within your area, you take full advantage of the opportunity. It also feels great to go up against the big boys, and win.

About Exor Management Services

Exor Management Services is an established Accreditation Body providing Supplier and Contractor Accreditation Services for more than 10% of Public Sector Authorities (PSAs) in the UK. Exor is the only Accreditation Body providing a world-class capability across all categories of public spending and all types of supplier, from Sole Traders through to FTSE 100 Companies.

Many of Exor's Public Sector clients are now using our Supplier Accreditation Service as a fundamental component of their procurement strategies in order to achieve Best Value Audit goals, assist in Urban Regeneration, support Inward Investment schemes and lay the foundations for 2005 e-Government initiatives such as the NePP project.

Developing and maintaining categorised lists of approved suppliers historically absorbed significant amounts of staff time and effort. Exor's service frees your staff to focus on the core Procurement issues removing the pre-qualification component of supplier selection. Exor are able to perform these functions extremely efficiently due to its unique technology,

processes and focus on this sole activity.

Written by Marc Wood, CEO of EXOR Management Services. For further information contact Marc Wood at Exor Management Services on 01992 707272,

email: info@exorgroup.co.uk or visit the website at www.exorgroup.co.uk.

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