Bridging the gap: how to help corporates and SMEs win and deliver consortium-based government contracts //13.09.20
The UK government is increasingly focused on overcoming the stagnation of its supply chain. Ensuring that the SME community has access to large-scale public-sector contracts is seen as one of the ways of overcoming this. To support this goal it aims to spend £1 in every £3 with an SME by 2022. A key driver behind this is to help government departments become more innovative and make sure that they’re able to benefit from the leading technologies and solutions to their challenges.
The ambition is clear, however there are a number of challenges that need to be overcome for genuine value to be created. To come up with feasible solutions it’s important to empathise with the key stakeholders involved. In no particular order, these include system integrators, technology consultancies, UK government departments such as the Ministry of Defence (MoD), larger enterprises and cybersecurity scaleups. Each of these face different challenges when faced with these government contract tenders.
There are a number of trends that are shaping the future of government outsourcing. As society’s expectations have become increasingly personalised, the government has had to move from large-scale, standardised solutions to more intelligent and interactive solutions. At the same time, the role of government departments is evolving from a provider of services to a facilitator and broker of services. This requires a new set of skills and capabilities. Government departments such as the MoD are constantly tasking teams with finding solutions to the innovation barriers that exist. Despite the efforts of these resources over a number of years, feedback suggests that a scalable and replicable solution remains out of reach.
From an SME’s perspective, some of the most significant challenges come from the one-size-fits-all commercial approach from the government. This involves a lengthy procurement process and terms and conditions that often have liability implications that are unachievable for a small business. This becomes even harder when looking to bid for an MoD contract with the associated security clearance and sovereignty requirements. These companies need access to the necessary commercial support teams on a pro rata basis. They also need to have an appreciation for the challenges a systems integrator faces which priming large government contracts. They are often required to take on the contract risk of the SME, which results in a number of additional considerations that are not always appreciated by the SME.
This is why taking a partnership-led approach is so valuable. The systems integrator often acts as the bridge between the government and an SME. They can easily be perceived as the awkward middle layer that adds cost, bureaucracy and opacity but they in fact have an important role to play.
There is also a perception that the systems integrator is an obstacle in between the government and innovative solutions that will transform their operations. However, the commercial, regulatory and legal requirements that government processes mandate often sit firmly with the systems integrator. They must evaluate the suitability of an SME (or a number of SMEs, depending on the consortium requirements) and be able to underwrite or guarantee delivery to government. This is often a challenging and complex task.
We are seeing signs that all stakeholders now recognise the need for a new model based on collaboration to overcome these challenges – a model that goes against the grain of the established way of doing things. We see LORCA and it’s ecosystem of cyber SMEs, enterprises, platform partners and government as an important enabler of this future state.
Watch a playback of a workshop Dave hosted for LORCA Live on this subject, and find out how to join our innovation ecosystem by taking up a LORCA for Enterprise membership.