Corporate report

DCMS action plan to engage small and medium-sized enterprises in its supply chain

Published 30 March 2023

DCMS Commercial Director statement

Our departmental commercial objectives include achieving value for money and creating competitive and diverse supply chains — small and medium-sized enterprises (SMEs) help us to deliver this. They are flexible, customer focused and employ 16 million people across the UK. DCMS is fortunate enough to have 25% of UK businesses operating within its sectors, and we want these innovative suppliers to see us as a priority business partner.

SMEs consistently amount to a high proportion of DCMS spend and as Commercial Director and departmental SME champion, I am keen to maintain a high level of SME engagement. This plan sets out our strategy to give more SMEs the tools to confidently bid for DCMS contracts, including market engagement and training, and early pipeline publication. We will continue to encourage feedback from the sector to better understand their experiences of contracting with us.

I am proud of our work so far in this area and this action plan demonstrates our commitment to, and recognition of, the SME sector. Our ambition is to see SMEs play a larger role in our supply chains and create economic growth for the long term across all of our sectors.

Marc Bryant
DCMS Commercial Director

Introduction

Small and medium-sized enterprises (SMEs) play a vital role in driving innovation and growth within the UK economy, opening new markets and creating jobs. As the source of innovation, they encourage competition and bring fresh ideas that challenge the status quo.

The government is committed to maximising spend with SMEs through supporting start ups and small businesses. As part of that commitment the Department for Culture, Media and Sport (‘DCMS’ or ‘department’) is focused on tackling barriers for SMEs contracting with DCMS. The department has consistently maintained a high level of SMEs in its supply chain (direct^{[footnote 1]} and indirect^{[footnote 2]}). This action plan sets out how DCMS intends to maintain its engagement with SMEs.

This action plan details the measures in place to ensure public supply opportunities are accessible to all businesses. It outlines how the department will maintain a high number of SMEs in its supply chains and promote SME inclusiveness to all businesses. DCMS has published a separate Voluntary, Community and Social Enterprise (VCSE) Action Plan providing a targeted approach to engagement with the VCSE sector.

Further support to SMEs is available through the SME guide to working with government and the small and medium business hub.

About DCMS

What DCMS does

DCMS helps to drive growth, enrich lives and promote Britain abroad. We protect and promote our cultural and artistic heritage and help businesses and communities to grow by investing in innovation and highlighting Britain as a fantastic place to visit. We help to give the UK a unique advantage on the global stage, striving for economic success.

Our department operates at the heart of government on some of the UK’s biggest economic and social issues. The role of DCMS has significantly contributed and shaped the UK into the nation it is today.

DCMS sectors are among the most dynamic and fast-growing in the UK. Supporting them through the pandemic has therefore not just been about protecting our nation’s cultural and social fabric, but making an investment in the industries that will power our recovery and shape our future.

DCMS manages a large breadth of government policy and therefore requires its commercial function to procure a wide portfolio of services. As a result, DCMS has a diverse supply chain which includes a range of markets and suppliers. As a core department, we predominantly procure professional services such as research, consultancy and legal services. Our reach further increases with the inclusion of our arms length bodies (ALBs) and major programmes who regularly engage with markets such as facilities management, construction and catering.

You can find out more about the department and its priorities in our Outcome Delivery Plan.

The DCMS family

DCMS is a ministerial department, supported by our agencies and public bodies – together this is the ‘DCMS family’.

Spend with SMEs

The SME spend target for the DCMS family is 33%, inclusive of direct and indirect spend.

Table 1: DCMS family SME spend (rounded to the nearest million)

Financial year	Total procurement spend	Direct SME spend	Indirect SME spend	Total SME spend (direct and indirect)
15/16	£428m	£182m	£13m	45.6%
16/17	£422m	£176m	£9m	43.9%
17/18	£358m	£135m	£22m	46.2%
18/19	£336m	£129m	£23m	45.2%
19/20	£608m	£268m	£19m	47.2%
20/21	£614m	£276m	£23m	48.7%

As illustrated in the above table, DCMS has continued to exceed its target year on year, with the majority of spend through our direct supply chain. This action plan sets out the department’s commitments to maintain this level of SME engagement.

Strategy and planned actions

Objectives

As a result of the goods and services purchased and the markets we operate within, the DCMS family has historically seen a high volume of spend with SMEs. DCMS’ updated SME Action Plan will focus on the below objectives:

1. Education and engagement: through increased engagement we would like to gain a better understanding of barriers to entry for SMEs, provide training and discuss future procurement opportunities;

2. Transparency: raise awareness of DCMS opportunities at the earliest possible stage so that they have the appropriate and necessary time to prepare;

3. Accessibility: ensure SMEs are informed of how to access DCMS contracts and our tendering processes are not unnecessarily complicated;

4. Confidence: providing SMEs with the confidence to tender for DCMS contracts.

The below SME Action Plan sets DCMS’ commitments to meet the above objectives.

SME action plan

SME champions

We have appointed a departmental SME champion to drive the SME agenda within the DCMS family and to drive the commitments within this action plan. The SME champion will form a network of SME leads across the department and the DCMS family who will support the delivery of the action plan.

The SME champion will continue to work closely with the Cabinet Office, and where appropriate other government departments, to learn best practice and share lessons learned. SME leads within the department will promote the SME agenda at a more granular level to increase awareness and accountability.

Pipeline

DCMS’ pipeline is available to view online. Our pipeline provides a look ahead of the Department’s procurement activity and opportunities for suppliers. We will refresh our published commercial pipeline every six months. The majority of DCMS’ contracts are tendered using Crown Commercial Services (CCS) frameworks; however, alternative routes to market are used within the DCMS family. Further information on how to sell through CCS and why sell through CCS can be found on CCS web pages. Our pipeline includes details of the expected routes to market and which opportunities are accessible to both SMEs and VCSEs.

Publication of our pipeline will allow all organisations easy insight into upcoming opportunities as a prime or subcontractor allowing for adequate time to prepare.

Supplier and market engagement

A major component of our action plan is to increase engagement to allow for further opportunities for DCMS and SMEs to work collaboratively.

We will use supplier workshops and surveys to obtain direct feedback from our supply chain to gain an understanding of supplier experiences with DCMS. To attract new businesses we will host meet the buyer events providing information on DCMS, our pipeline and procurement processes. Our aim is to understand SME experiences and how DCMS can improve its processes to accommodate SMEs.

DCMS will conduct pre-market engagement activity where appropriate. We will utilise early market engagement to help the development of requirements and prepare suppliers for upcoming tenders.

Strategy

When developing requirements and considering routes to market, we have placed emphasis on the need to consider SME suitability. Our Commercial Directorate works closely with the department to understand requirements and advise on the most appropriate delivery model. Where appropriate and possible, we will split large procurement requirements into smaller contracts to ensure greater accessibility and suitability for SMEs.

The Procurement Policy Note on Reserving Below Threshold Procurements provides the rights for contracting authorities to reserve the procurement opportunities for SMEs - this means being able to run a competition and specify that only SMEs and VCSEs can bid. As per the PPN guidance, DCMS applies careful consideration when using this option considering this on a case-by-case basis.

Publication

Where applicable, DCMS continues to utilise open tenders as a route to market publishing opportunities over £12,000 (or £30,000 for sub-central contracting authorities) on Contracts Finder and Find a Tender. As a default, all DCMS opportunities are made available and tagged as suitable for SMEs unless adequate justification can be provided and approved.

We understand the time and effort required to participate in a procurement process; therefore, where possible, DCMS will ensure a sufficient window of opportunity to tender is provided to ensure SMEs are given an appropriate chance to reply and produce credible tenders, as well as continue to review our procurement processes to ensure bidding for contracts is as simple and easy as possible.

Post procurement

To ensure continuous improvement, lessons learnt are captured throughout the commercial life cycle and fed back into future procurements. Lessons will be captured and recorded through all aspects of the commercial lifecycle including procurement, delivery and contract completion.

Prompt payment

The department aims to pay all valid invoices within five working days of receipt, and is working to improve prompt payment down the supply chain, in line with government policy. The department’s policy is to comply with the Institute of Credit Management’s prompt payment code, of which DCMS is an approved signatory. DCMS prompt payment statistics are published quarterly on GOV.UK.

PPN 08/21 requires departments to ask bidders for information about their performance in paying subcontractors. The PPN allows contracting authorities to exclude tenderers on the basis of their payment practices.

The wider supply chain

The DCMS family is undertaking a strategic supply chain mapping exercise enabling the better visibility of its suppliers across its tiers. Through this, DCMS will be able to monitor SME engagement in the department’s supply chain with a view to identify SME and VCSE trends.

We will develop more accessible, accurate and straightforward reports. To facilitate this we will continue to work with the Cabinet Office and our suppliers, to draw on the skills and experience across government and its supply chains.

DCMS has implemented a commercial system to help with better generation and monitoring of data. This system is expected to go through various developments and upgrades to ensure improvements to data quality and accuracy of reports.

Social value

Departments have an obligation under the Social Value Act to explicitly evaluate social value in all procurements where the requirements are related and proportionate to the subject matter of the contract. Social value can be described as the positive legacy created from contracts such as a more diverse workforce, fewer single use plastics in the environment and more cohesive communities.

DCMS takes account of social value in the award of contracts by using the social value model. This model defines social value through a series of priority themes and policy outcomes. It takes account of the additional social benefits that can be achieved through the delivery of contracts, using policy outcomes aligned with government priorities.

The use of the social value model will support supplier diversity across the supply base (i.e. creating a vibrant, diverse, mixed market with varied sizes and types of supplier including VCSEs, SMEs and mutuals).

DCMS has built in social value criteria in all procurement activity above £100,000, and will continue to review our procurement processes to ensure this is efficient and effective. DCMS will also increase engagement across the department and the DCMS family to ensure understanding of social value and alignment of processes.

Driving for improvement

Continuous improvement is necessary and critical to ensure the DCMS family is capable of maintaining its engagement with SMEs. We will:

• proactively seek and act on feedback from SMEs and VCSEs to improve the processes and drive innovation in procurement, and embrace effective sharing of information and best practice across government
• increase prime or major suppliers’ awareness and involvement encouraging them to open up their supply chain to SMEs where possible — alongside this, and where appropriate, we will ensure our prime suppliers advertise subcontracting opportunities on Contracts Finder
• review and improve the way we identify and communicate with SMEs

1. To calculate direct spend we use Dun and Bradstreet, a leading provider of business information, to classify all government suppliers as either SMEs or non-SMEs in line with the EC definition. We then use departments’ accounting systems to calculate how much money has been directly spent with those SMEs. Departments are asked to include the core department and its Executive Agencies and Non-Departmental Public Bodies (NDPBs). ↩

2. Indirect spend with SMEs via the supply chain was collected through a survey issued by departments to their suppliers. For each department, we calculated the percentage of their procurement spend with large suppliers which had been captured by supplier responses. For those departments with over 70% of spend captured (i.e. with high levels of confidence in the supply-chain data) an extrapolation has been applied over the remaining spend to obtain a more complete picture. ↩