SME Contract Award Data – September 2017

Hey everyone,

Here’s instalment three of our SME Contract Award Data blog, this time covering September 2017. Remember, it takes a little while to get all the data together, so we run about three months behind.

This month’s highlights:

  • £700m less spent with SMEs compared with last September, but don’t worry – it’s good news!
  • More SME suppliers win government contracts
  • Proportion of spend with SMEs shows a healthy year-on-year improvement
  • Best and worst performing regions revealed
  • Our data covering ‘Contracts/Frameworks suitable for SMEs won by SMEs‘ baffles and frustrates us (and probably needs a rethink)

I hope you enjoy the blog – as ever, if you have any suggestions, please reach out to us.

hello@smebidder.com

 

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Lloyd Johnson | Founder

 


 

Let’s explore the September data…

 

SME vs Large Companies AwardFramework Value - September 2017

If you look at these values year-on-year you’re likely to feel a little depressed… but take a look at the decrease in total spend compared with September last year. It’s actually almost £7bn less.

Although spend with SMEs dropped over £700m compared with last September, it’s actually improved proportionately compared to spend with large companies.  More on this later in the article.

 

Number of Distinct Suppliers by Month - September 2017

Building on the 13-month view provided in our last update, we are seeing positive movement in terms of an increase in SME supplier awards.

Last month we saw that August 2017 experienced a 5% year-on-year increase compared with 2016. For September 2017 that’s jumped significantly to an 18% increase compared with 2016.

On the surface of things, of course, this is great news for SMEs, although I would advise some caution when viewing these figures in isolation. What we want to avoid is lots of small businesses winning extremely low-value contracts or frameworks that never deliver any substantial new revenue.

 

SME percentage of Total AwardFramework Value - September 2017

Earlier in the blog, we mentioned an increase in 18% of distinct SME suppliers awarded contracts. Great news right?

Well, the answer is yes, but only when values also increase. Last month we saw a huge increase year-on-year for August. Although the graph above shows a distinct drop in overall percentage value compared with August, there is actually an improvement of 2% for the month compared with last year (rising from 13% to 15%).

Last month we asked if August was an outlier. Not on this evidence.

 

SME percentage of Total Award Framework Value by Region (September 2017)

Last time we commented on how much this data fluctuates month-on-month.

This is our third SME Contract Award Data blog and we see no signs of that pattern changing. There are huge swings and fluctuations in this data, with regions performing vastly differently month-on-month.

So this month we thought we’d point out some of the best and worst performers over the three month period we’ve covered so far.

Top half for three consecutive months:

– Northern Ireland

– Scotland

Bottom half for three consecutive months:

– London

– North West

 

SME AwardsFrameworks as a Proportion of Those Suitable for SME - September 2017

* We use contracts of <£50m as a proxy for those suitable for SMEs.

I was hoping that reviewing this particular chart would become one of my favourite jobs each month. The story should go something along the lines of: “SMEs are winning proportionately more of the contracts/frameworks that they are suitable for.”

But this just isn’t the case and it’s extremely frustrating.

This data is saying of all the contracts/frameworks that should be suitable for SMEs, only 16% were actually won by SMEs, which is pretty appalling.

We’ve admitted before that this data set has some challenges, predominantly in terms of the ‘< £50m value’ indicator we use, but I can’t help but feel we should be seeing different (better) results.

We’ve already seen that distinct supplier awards are increasing and so is the percentage of value awarded to SMEs. If we believe in all three figures, the only plausible explanation is that SMEs are awarded lots of ‘high-value’ frameworks, of which they’ll only receive a small percentage of the contracts actually awarded under it.

Our biggest frustration is that the ‘suitable for SMEs’ flag is only available in Contracts Finder and therefore cannot be applied across all awards.

Perhaps it’s time to rethink this particular piece of analysis…

 

Feedback

We had some great feedback after our first instalment. Long may that continue.

The blog can only get better with your help and input. What data would you like to see? What analysis and insights are of interest to you? Drop us an email at hello@smebidder.com, or send me a message on LinkedIn.

 

 

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Our data is produced in partnership with the fantastic people at Tussell. It takes into account Contracts Finder and Tenders Electronic Daily (TED) contract award data only.

www.tussell.com

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