Policy paper

The Foreign, Commonwealth & Development Office's small and medium-sized enterprise (SME) action plan: 2025 to 2028

Published 24 March 2026

How we are backing your business

Through Backing your business: our plan for small and medium-sized businesses, we are delivering the most comprehensive package of support for small and medium-sized enterprises (SMEs) in a generation.

Growth is this government’s number one mission and SMEs are the engine room. Our plan is to make the UK the best place to start and grow a business, with a culture that supports entrepreneurship in every community and high street.

We’re delivering:

• the most significant legislation to tackle late payments in over 25 years, giving the UK the strongest legal framework on late payments in the G7

• a new Business Growth Service to simplify finding advice and support, including a new streamlined digital offer – Business.gov.uk, ending the chop and change of previous government business support programmes

• a package of support tailored to high streets to make it easier for SMEs to set up shop, ranging from a new licensing framework to targeted funding for places

• a massive £4 billion finance boost to increase access to finance for entrepreneurs – to inspire the next generation of small business owners, make the UK the best place to start and grow a business, and build a culture that celebrates and champions entrepreneurs

We also committed to making SMEs a national priority, ensuring they have a fair opportunity to win public contracts and setting ambitious SME targets for each department. Each departmental SME action plan sets the steps government departments are taking to maximise SME and start-up spend across their department and wider agencies. These plans also include departmental targets for direct spend with SMEs and the actions being taken to remove and reduce barriers to SMEs bidding for government contracts.

The Procurement Act 2023 creates a more simple and transparent procurement regime, making it easier for SMEs to do business with the government. This action plan sets out why SMEs should work with us, where to find opportunities, and the actions we are taking to reduce barriers for SMEs in bidding for work.

The plan is monitored through an annual publication (as a minimum) of our direct spend with SMEs as a percentage of our total procurement spend.

SMEs are suppliers that have fewer than 250 staff, and have a turnover of an amount less than or equal to £44 million or a balance sheet total of an amount less than or equal to £38 million. For more information, see Clause 123 of the Procurement Act 2023

Foreword

Seema Malhotra MP, Minister for the Indo-Pacific and Minister for Equalities

Driving economic growth through FCDOs SME action plan

The FCDO’s SMEs Action Plan is a crucial element of the Government’s mission to promote sustainable economic growth. SMEs are fundamental to our local economies; with over 5.5 million small businesses in the UK, they generate employment and drive innovation across all our communities. SME’s have an invaluable role in the international work of the FCDO.

The National Procurement Policy Statement (NPPS) ensures that small businesses have equitable opportunities in public contracts, strengthening supply chains and enhancing economic growth. By prioritising our efforts to increase procurement spending with SMEs, economic growth can be stimulated, opening substantial opportunities for small businesses both domestically and internationally. SMEs play a vital role in supporting FCDO to deliver its priorities, whether that’s through diplomatic and development programmes, or operating our global network. Building on relationships with SMEs is also important in supporting greater international trade and driving opportunities for businesses through our trade deals across the world.

Public procurement is a key instrument in achieving the Government’s objectives by securing goods and services that offer value for money while generating social and economic benefits throughout the commercial lifecycle. This action plan provides a solid foundation for future economic development, ensuring that small businesses receive the necessary support to thrive and contribute to our national prosperity.

Gareth Nugent, Chief Commercial Offer, Foreign, Commonwealth and Development Office

As the Chief Commercial Officer of the Foreign, Commonwealth & Development Office (FCDO), I recognise our commitment to supporting small and medium-sized enterprises (SMEs) over recent years. Our efforts are ongoing, and we have reflected on our achievements to date to inform this updated Action Plan, addressing what SMEs have identified as priorities.

Leveraging the opportunities provided by the Procurement Act 2023, FCDO Commercial will advocate for and adapt to the needs of small businesses, creating opportunities as outlined in the National Procurement Policy Statement (NPPS). This approach aims to pave the way for success and innovation, ensuring that small businesses contribute to achieving the FCDO’s objectives.

SMEs are an important part of FCDO’s global supply network, accounting for a significant portion of our expenditure. The SME Action Plan has been developed to support the continuation of this positive trend. We recognise the challenges SMEs face when bidding for Government contracts. Nevertheless, we are committed to implementing new initiatives and processes to reduce the barriers.

By collaborating closely with our SME Advisory Forum, we aim to make funding opportunities more accessible to both UK-based SMEs and local businesses abroad. This strategy seeks to foster healthier markets both domestically and internationally, thereby supporting the Government’s mission of delivering sustainable economic growth and, most importantly, delivering increased value in FCDO’s missions.

Department overview

The FCDOs Commercial Directorate provides end-to-end procurement and commercial solutions to deliver the FCDO’s priorities, whether that is through diplomatic and development programmes, or operating our global network. The Commercial Vision is to deliver better diplomatic and development outcomes through global commercial excellence.

We manage the award of all contracts above the procurement threshold, and contracts above £25,000 for operating spend on behalf of posts and 1HMG overseas. In 2023 to 2024, £1.9 billion was spent via commercial contracts on development and operating spend across our global network.

In addition, Commercial has taken lead responsibility for the management of non-contractual agreements (Grants and MOUs), which represents a substantial area of spend in its own right (approximately £2.7 billion in 2023 to 2024). The Commercial Operating Model delivers sourcing for a wide range of contract values in the UK and across 180 posts, in line with UK policy and legal requirements. Our supply chain management team is responsible for supplier relationship management, market creation, supply chain risk, due diligence and broader supplier management activities.

Why SMEs should work with us

Small and medium‑sized enterprises (SMEs) are a vital part of the FCDO global supply network. SMEs bring agility, innovation and specialist expertise that strengthen our ability to deliver high‑quality diplomatic, development and operational outcomes across the UK and overseas. Their capacity to respond quickly, propose creative solutions and adopt new technologies enhances the diversity and resilience of our supply chains, ensuring we can meet complex and evolving requirements effectively.

SMEs also make an important contribution to sustainable economic growth. With millions of small businesses operating across the UK, increasing opportunities for SMEs within public procurement supports innovation, creates high‑quality jobs, and enables a more dynamic and competitive commercial environment. For SMEs working internationally on FCDO programmes, their local knowledge and specialist capabilities also help advance the UK’s development objectives, including progress towards the Sustainable Development Goals

The FCDO is committed to ensuring that SMEs can engage fairly and successfully in our commercial processes. By removing barriers, improving visibility of opportunities, simplifying tendering where appropriate, and collaborating closely with our SME Advisory Forum, we aim to create a procurement system that is more open, transparent and accessible. This supports SMEs to thrive as prime suppliers, subcontractors or consortium partners, strengthening markets, improving value for money, and ultimately contributing to a more effective, efficient and socially responsible commercial ecosystem.

Links to departmental commercial opportunities

Direct opportunities

One of the most important things contracting authorities can do is to provide the market with information about current and future public contract opportunities by publishing a forward-looking procurement pipeline.

The Procurement Act 2023 achieves this by requiring the publication of pipeline notices in certain circumstances. This is of particular benefit to SMEs, as it provides them with time to plan for future work, ensuring a competitive and diverse market.

Pipeline notices (UK1) for any intended requirement over £2 million are published on Find a Tender. Our pipeline notices are a forward look for 18 months and are reviewed and updated annually or as necessary.

For suppliers

To search for a notice, visit find a tender.

Steps:

1. Using the left-hand menu, go to Procurement stage and select Pipeline.

2. Clear the tick from Other notice types.

3. Enter the date range, starting from 1 April 2025.

4. Search by CPV code, for example technology services.

5. Search for opportunities suitable for small and medium‑sized enterprises (SMEs).

To find Foreign Commonwealth and Development Office notices

Steps:

1. Go to find a tender.

2. Enter foreign, commonwealth and development office in the “Keywords” box. Include the quotation marks to avoid unrelated results.

To find other FCDO UK1 pipeline notices (Procurement Act 2023)

Keep the foreign, commonwealth and development office keyword filter applied while you select the Pipeline and Notice type filters.

Steps:

1. In the left-hand menu, go to Procurement stage and select Pipeline.

2. Scroll to Notice type.

   • open Procurement Act 2023
     • Deselect all, then select UK1: Pipeline notice
     • close the section

3. Still under Notice type, open Other notice types.

   • Deselect all (this removes all PCR 2015 notices)
   • close the section

4. Scroll to Date range and enter:

   • From: 1 April 2025
   • To: leave blank or enter your preferred end date

5. Select Update results.

Optional filters:

• add CPV codes (e.g., technology services).
• select SME‑suitable opportunities if relevant

To search for other Procurement Act 2023 notice types

To look for other notice types under the Procurement Act 2023:

1. Go to Notice type → Procurement Act 2023.

2. Deselect all notice types.

3. Select one of the following notice types:

   • UK2: Preliminary market engagement notice
   • UK3: Planned procurement notice
   • UK4: Tender notice
   • UK5: Transparency notice
   • UK6: Contract award notice

Find more information

• Learn about the different procurement notice types 

• Read about how to look at the notices, notifications and the use of data

• Search and apply for contract opportunities

Joining Frameworks or Dynamic Purchasing System

Joining a commercial agreement, such as a framework or Dynamic Purchasing System (DPS), can put SMEs in front of buyers actively seeking their services.

• framework agreements establish terms for future contracts, providing a pool of pre-selected suppliers from which public sector buyers can call off orders

• DPSs are an “always open” electronic list of pre-qualified suppliers that public sector buyers use to quickly and flexibly purchase goods, services, or works

The Foreign, Commonwealth & Development Office (FCDO) has several frameworks that enable it and other government departments to manage and deliver international development programmes. Additionally, FCDO covers Dynamic Purchasing Systems (DPS) for international construction services and global facilities management.

Find more information

Visit FCDO procurement. for details about FCDO’s commercial policy, guidance and current frameworks.

Visit Upcoming agreements to see upcoming agreements that are not covered by FCDO’s own framework agreements.

Joining a supply chain

Joining an FCDO supply chain allows SMEs to access larger government contracts that may be difficult to secure independently. This can help build relationships with larger companies and provide experience working on sizable projects.

Additionally, suppliers may establish their own consortium, which enables SMEs to collectively leverage their specialised skills and compete more effectively for individual contracts or framework agreements.

The Find a Tender service and the newly launched Central Digital Platform can be used to identify potential prime contractors bidding on large government projects. By monitoring these opportunities, SMEs can reach out to organisations to offer their services as subcontractors or suppliers, which is an effective way to participate in significant projects and become part of the government supply chain.

Many industry bodies and trade associations advertise opportunities within supply chains. Find out how to do business with FCDO

Departmental supplier events

We host several procurement-focused events each year, promoted through social media and our weekly newsletter. Most events are online to reduce barriers and ensure maximum participation, especially for small businesses regardless of location. This approach is also more environmentally sound in terms of carbon footprint.

Follow us for event updates:

• LinkedIn  www.linkedin.com/in/fcdo-procurement

• X  @FCDOProcurement

• weekly engagement newsletter FCDO Supplier Engagement Newsletter

Our actions and milestones

The FCDO values working with SME’s because of the specialist skills and innovative approaches they bring to delivering our requirements. By increasing SME participation in our procurement processes, we aim to see more SMEs securing contracts both as lead suppliers and in key supporting roles within supply chains.

Through regular webinars, comprehensive guides, virtual engagement sessions and simplified tender processes, we equip SMEs with the knowledge, tools and opportunities needed to compete effectively for FCDO contracts.

By fostering partnerships, improving communication channels and reducing the cost and complexity of bidding, we are working to build a supply chain that is more inclusive, dynamic and resilient. Building on the progress achieved through the SME Advisory Forum, our annual membership refresh, paired with the retention of institutional knowledge, will ensure that a broad range of SMEs continue to be represented and able to influence change.

This approach aligns with the UK Government’s wider ambition to stimulate economic growth by partnering with business. The National Procurement Policy Statement (NPPS) sets out the Government’s priorities for public procurement, aiming to strengthen supply chains and promote economic growth by giving SMEs a fair chance at public contracts, supporting high‑quality jobs and championing innovation.

The FCDO’s SME Action Plan 2025 to 2026 provides a comprehensive and aspirational framework for engaging with SMEs. Through increased visibility, robust support, strategic partnership and greater empowerment of the SME sector, we aim to foster a supply chain that is more inclusive, more dynamic and more effective.

                                                                               

Improvement action	Benefit to SMEs	Milestones
Greater visibility and accessibility of opportunities	Updating procurement pipelines, using the Jaggaer e-procurement portal, and sharing updates through social media and newsletters helps SMEs plan ahead. Clear and timely communication reduces uncertainty and improves SMEs’ ability to compete.	Publication of pipeline notices for procurements above £2 million. Publishing a pipeline of lower-value contracts on Jaggaer to inform suppliers about upcoming opportunities and call-offs from frameworks. Using the Jaggaer e-procurement portal to explain procurement routes early and to notify suppliers about tender release dates or delays. Maintaining a digital-first approach to premarket engagement so all suppliers can take part regardless of location. Exploring additional premarket engagement approaches where appropriate. Using social media and the weekly FCDO Procurement newsletter to publicise events and key updates.
Support for SMEs in the bidding process	Targeted webinars and guidance help SMEs and new entrants understand FCDO’s bidding requirements. Simplifying tender processes reduces the cost of bidding and encourages greater participation. These changes help build a diverse and resilient supplier base that supports economic growth.	Publishing SME focused webinars on the bidding process and FCDO requirements. Providing comprehensive and regularly updated guides on bidding for FCDO contracts. Hosting portfolio level market engagement sessions that outline upcoming opportunities by region and theme. Simplifying tender processes and requirements where possible to lower bidding costs and increase SME participation. Using lower-value FCDO frameworks and splitting contracts into smaller lots when appropriate. Using provisions in the Procurement Act 2023, including the light touch regime and the competitive flexible procedure, to encourage SME participation.
Collaboration and networking of SMEs and larger organisations	Networking supports partnerships that help SMEs grow and increase their visibility. Sharing subcontracting opportunities enables SMEs to join consortiums and strengthen their capability. Regular virtual meetings ensure SMEs stay informed and can prepare for future opportunities.	Organising events that help SMEs connect with larger organisations. Encouraging existing suppliers to share partnership and subcontracting opportunities transparently. Exploring ways to showcase effective collaboration across supply chains. Holding virtual meetings with the supply market throughout the year.
Empower SMEs to drive change	The SME Advisory Forum ensures SME perspectives shape improvements to FCDO procurement processes. Annual membership updates keep a balance between new insights and existing experience. A focus on cocreation helps SMEs influence meaningful changes that support the wider SME community.	Using the SME Advisory Forum as the central platform for SMEs to inform improvements to FCDO procurement. Refreshing Forum membership annually to balance continuity and new perspectives. Holding quarterly and ad hoc meetings with senior FCDO leaders so SMEs can raise issues directly. Working with Forum members on practical steps to remove barriers to SME participation.

Case studies

FCDO will provide updated case studies periodically during the year.

Our spend with SMEs

The table below presents historical data on our spending with SMEs. We are committed to monitoring our annual SME spend to ensure alignment with our SME Action Plan and to maintain transparency in our reporting.

Our target for the three-year period ending in fiscal year 2027 to 2028 is set at 14%. This reflects the overall reduction in the FCDO’s budget settlement following the June 2025 Spending Review, while still incorporating a stretch target to drive increased SME engagement through targeted measures outlined in this action plan.

Given the large scale and value of many FCDO contracts, a significant portion of our SME engagement occurs indirectly through the supply chain. We will continue to monitor and report on both direct and indirect SME spend and support small businesses in working with us whether as lead suppliers or as key partners within our delivery chains (see table below for further details).

Financial year	Direct spend with SMEs % Target	Total procurement spend (£m)	Direct spend with SMEs (£000)	Direct spend with SMEs %
2020/21	N/A	£1,486	£292	19.7%
2021/22	N/A	£1,362	£203	14.9%
2022/23	N/A	£1,425	£239	16.8%
2023/24	N/A	£1,885	£340	18.1%
2024/25	N/A	£2,022	£408	20.2%
2025/26	12%	No data	No data	No data
2026/27	13%	No data	No data	No data
2027/28	14%	No data	No data	No data

Financial year	Indirect spend with SMEs % Target	Total procurement spend (£m)	Indirect spend with SMEs (£000)	Indirect spend with SMEs %
2020/21	N/A	£1,486	£237	16%
2021/22	N/A	£1362	£314	23%
2022/23	N/A	£1,425	£183	12.8%
2023/24	N/A	£1,885	£240	12.7%
2024/25	N/A	£2,022	TBC	TBC
2025/26	N/A	No data	No data	No data
2026/27	N/A	No data	No data	No data
2027/28	N/A	No data	No data	No data

Latest report covering Quarter 4: 2024

• 95% Percent of invoices were paid within 5 days
• 98% Percent of invoices were paid within 30 days

Find more information

View our payment statistics

read more about the government’s payment policy and legislation

SME Hub

The small and medium business hub is a dedicated space for SMEs looking to work with the government. Here you will find links to other departmental action plans and centralised guidance on bidding for government work.

Contact us

FCDO Supply Chain Management Team - Market Creation

smeengagement@fcdo.gov.uk

Find out about our department