Changes to government procurement gives small firms a new competitive edge

Scrapping of Two-Tier code means small businesses can bid for more public sector work

The government’s announced changes to public-sector procurement rules will lead to more small and medium businesses bidding for public sector work, according to EMW law firm.

The Two-Tier code was introduced in 2003 to ensure that the pay and conditions of new staff hired by private companies, which take over public-sector contracts, would be comparable with those received by the former public sector staff they work alongside. However, it was a major disincentive to smaller businesses to bid for government contracts because it restricted their ability to deliver services as cost-effectively as possible.

With the scrapping of the Two-Tier code, EMW says the new flexibility will mean that overall productivity can be increased and improved services can be delivered without an increase in price.

Jon Taylor, head of employment at EMW, said: “Traditionally, flexible working practices were seen as one of the efficiencies that smaller companies could bring to public sector work as they were not locked in deals with public sector unions.

“Smaller companies and the voluntary sector in particular should welcome this change as without the restrictions of the Two-Tier code, they will be able to tender for business more confidently knowing that they can offer a competitive bid and will have greater control over how they deliver the service in future.”

© Crimson Business Ltd. 2010

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