Larger contractors get preferential treatment on government contracts, say SMEs

17th October 2013

A new survey of more than 700 small contractors has found that more than two-thirds of SMEs believe larger, more established contractors received preferential treatment when it comes to bidding on government work.
The Constructionline survey revealed that the government’s attempts to level the playing field for SMEs in procurement were failing. Almost 80 per cent of SMEs surveyed felt larger contractors will be given 'preferential treatment' ahead of smaller firms for funding announced in the impending spending review.
Constructionline, a register of pre-qualified contractors and consultants, found that more than a third (39 per cent) of SME contractors who acted as a main contractor for public or private sector projects had seen payment times lengthen in the last quarter.
When questioned on which sectors were most prompt with payment on construction contracts, local authorities (40 per cent) came out on top, followed by the private sector (30 per cent) and housing associations (19 per cent).
The report was released just days after prime minister, David Cameron confirmed the Government is considering introducing extra penalties for firms that pay their suppliers late.
It is just one of many proposals currently under consideration ahead of a consultation to be launched on late payment later in the year.
The Government is working hard to devise a new fair payment charter for the construction industry, which is soon to be reviewed by the Construction Leadership Council.
Despite payment times lengthening, almost half (47 per cent) of those surveyed revealed workloads had increased in the last quarter with 42 per cent anticipating having to expand their workforce as a result.
Philip Prince, director of Constructionline, said: "We have a long road to walk before we can claim a fair landscape for all SMEs.
"Smaller contractors, who don’t have the same resources to invest in tendering as the major players, or extensive cash reserves to fall back on, continue to struggle as the upturn takes longer to trickle down the supply chain.
"The general consensus is that the biggest firms will reap the greatest rewards."

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