ScotlandIS News

Current News: Smaller firms 'face discrimination' in battle to secure technology contracts

TECHNOLOGY leaders have told ministers behind closed doors that the Government is failing to bring an end to "discriminatory" procurement procedures. At stake is who gets what when landing public sector contracts that can regularly run into millions.

ScotlandIS, the trade body representing software, telecoms and IT interests, pleaded with enterprise minister Jim Mather at a private meeting in Glasgow to replace an inferior system that affects all sectors with "a smarter and more sophisticatADVERTISEMENTed" scheme.

Mather heard claims that the procedures favour bigger companies. The IT sector in Scotland employs 105,000, the bulk working with small to medium-sized-firms (SMEs) employing fewer than 50 staff.

ScotlandIS claims the IT industry contributes more than £5bn in annual sales to the Scottish economy, and services other key industries including financial services, tourism and energy and life sciences. Mather's ministerial brief also takes in energy and tourism.

Polly Purvis, its chief executive, said: "Used effectively, public sector contracts provide an invaluable base for growing businesses, and provide authoritative references for those looking to expand overseas.

"Current policy, whilst fair in theory, discriminates heavily against SMEs in practice, a clear case of serious market failure."

Recent Government procurement awards have either been 'amalgamated' over time, say 10 years, or have drawn together a range of services under one contract.

ScotlandIS claims this makes it impossible for even Scotland's largest SMEs to bid for this work. "In addition, the overall cost of tendering is a barrier to all companies bidding for Government work."

ScotlandIS said its members need "a smarter, more sophisticated procurement process where value for money is balanced against local economic impact".

Purvis claimed that while the breadth of small specialist IT companies is an industry strength, it also represents a challenge. "Small companies individually do not have the scale, resources, planning horizon nor collective knowledge of large corporations.

"It means that individually they cannot address industry-wide issues such as skills shortages and procurement barriers to company growth."

The private summit took place after six months of lobbying by ScotlandIS. Mather said he wants formally to develop Scottish technology policy for the next 15 years, identifying what barriers and inhibitors to growth persist in the marketplace.

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