Can SMEs really win big government contracts? Here’s how …
SMEs make up 99% of all UK businesses and employ 16 million people but they win a tiny sliver of a share of government contracts. Though they may have a small team, they have potentially game-changing local insight. Now, public contracts are becoming more available. SMEs and VCSEs have a chance to get more involved in higher profile, more consistent, well-paid work. This is where Supply Connect comes in.
It’s unlikely that you have but, according to the numbers, you’ll be interested. Enterprise Nation research showed that 51% of SMEs surveyed wanted to win government contracts, 40% need support to do so but 23% had never heard of any such training being available. Supply Connect is the key to unlock all this SME potential.
I noticed the launch last October. As a researcher who’s interviewed hundreds of small businesses and partners with them to help them grow, I am interested to see what’s happening and how it’s all meant to work. Here’s what I found out …
Government contracts are, by definition, large and their performance scrutinised. This leads to more rules and greater answerability. Perhaps naturally, then, contracts are often awarded to large, trusted partners. As an example, prison contracts worth £1 – 4 billion are open to a shortlist of just 6 suppliers. These major players are the Tier-1s. These big projects often require local knowledge and insight so the Tier-1 organisation breaks them up and offers them to its supply chain. These subcontractors are the Tier-2s.
Turns out there hasn’t been much room for them. Lynne Copp, and her SME The Worklife Company won a Challenge Fund contract for work life balance, leading to 5 years of consistent, national growth in the early 2000s, “We had a brilliant contract with the government, the Challenge Fund for worklife balance managed by Tier-1 PwC. We worked as a Tier-2 supplier for about five years… They had about 40 SME organisations approved on the Challenge Fund supplier framework.”
Even with such a positive experience, more recently she has found that there are higher barriers and less transparency in the process. Who is the appointed Tier-1 supplier? Who is able to apply for the Tier-2 contracts? How? Her business model had to adapt as access narrowed. She said, “It’s usually word of mouth. The Tier-1 suppliers for the NHS, I can’t get on because I’m a one-man band. They want the big six and that’s it.”
After the UK left the European Union, there was a chance to revisit how the government awarded public contracts. New rules were needed and thus the Procurement Act 2023 came into being.
It made a slight but significant change to the wording of the previous regulations. Whereas before the contract would be awarded to the “most economically advantageous”, now it would go to the “most advantageous” tender. Notice the loss of ‘economically’.
From 2025, public contracts should be awarded where it would create the most value and not based on who would save the most money
What was the intention behind the change? A broader definition of what public contracts were trying to achieve. From 2025, contracts are to be awarded where it would create the most value and not based on who would save the most money. 10% of the weighting from contract tender scores is now linked directly with Social Value.
Any business who wanted to win public contracts now have to prove they are sufficiently skilled, resourced, insured, digitally secure, fiscally robust and everything in between for the part of the contract they were tendering for. Contractors will write tenders but not solely with Tier-1 national company capacities in mind. This was to be the end of requirements that most SMEs couldn’t dream of meeting e.g. proofs of hundreds of thousands of pounds in cash flow or insurance.
In addition, there is a new focus placed on how interested businesses are contributing to their communities, fostering initiatives for community integration and considerate of the environment. Think local sourcing, local employment, local apprenticeships and training.
Supply Connect spells the end of tendering requirements that most SMEs couldn’t dream of meeting
Here’s the Social Value Model as published by the Cabinet Office and introduced in February 2025:
| Mission | Policy Outcome |
| Kickstart economic growth | Fair work: that offers fair wages and good working conditions. This includes endeavours to address modern slavery. Skills for growth: supporting growth sectors and addressing skills gaps. Resilient, innovative and flexible supply chains: support economic growth through enabling resilient businesses, opportunities for small businesses and voluntary, community and social enterprises. |
| Make Britain a clean energy superpower | Sustainable procurement practices: reducing carbon footprint, minimising waste, and promoting the use of clean energy and green technologies. |
| Take back our streets | Support the reduction in crime through community cohesion, awareness raising and action. Domestic abuse is a big factor here. |
| Break down barriers to opportunity | Employment and training for those who face barriers to employment. Creating a pipeline of opportunities for the contract workforce, reducing barriers to entry for under-represented groups. Partnerships with the local community are especially rewarded. |
| Build an NHS fit for the future | Increasing productivity through physical and mental wellbeing: in the supply chain and communities in the relevant area. |
For all but the biggest contracts, Central Government now have to choose at least one of the above outcomes and ensure a question related to that outcome is included in the tender.
To achieve this, there are organisations who will train and prepare engaged SMEs. From October 2025, the Supply Connect programme would offer tailored training, Meet the Buyer events, and, once approved, access to digital supplier platforms.
Enterprise Nation are leading the programme, developing the digital supplier hub and resources, and advocating for SME involvement.
Newable provides specialist support, including tailored business advice and mentoring, organising and running the Meet the Buyer events.
MSDUK, WEConnect International, and OutBritain are also partnering to support inclusion and diversity.
Funding comes from the UK Government’s £2 billion construction and housing fund as well as £1.2 million of JP Morgan Chase’s £40 million commitment to UK business growth.
Oversight will be the responsibility of the new Cabinet Office body, the Procurement Review Unit (PRU). Within that, the Public Procurement Review Service (PPRS) will deal with complaints, the Procurement Compliance Service (PCS) conducts formal investigations and will offer recommendations and remedies, and the Debarment Review Service (DRS) will maintain a list of excluded organisations. The PPRS replaces the previous Mystery Shopper service for complaints.
What evidence is there that this partnership will work?
Rather than having to fill out an exhaustive and inscrutably worded questionnaire, SMEs will need to make the grade and meet the Supply Connect Standard. What does this involve?
Before tendering for any contracts, SMEs will need to prove they are already Day One ready.
Register to be a member of Enterprise Nation. Register for Supply Connect.
Fill out your business profile. These are general questions about the size and nature of your business.
The “Digital Readiness” Audit. Entry begins with a diagnostic questionnaire as well as submitting your business documentation. This will ask you what support or training you think you might need as well as your confidence level when it comes to bidding.
Which documents need to be provided?
Verification. Your profile is scored. You receive A personalised training plan to help you hit the sufficient ‘Contract-Ready’ standard. You can begin to meet with advisors, work with mentors and attend events in line with the recommendations.
Once you have received confirmation that you qualify, you can move on to Step Five.
“Meet the Buyer” Matching. You’ll receive alerts of opportunities you can bid for. The “Supply Connect Hub” matches your profile with specific buyers. If you get a match, you can choose whether to express interest. Win the bid and you can move to Step Six. If your bid fails, you should receive feedback to explain what changes you may need to make to qualify.
At this point, there are two different kinds of contracts:
Framework Induction. A 6-to-12 month window to introduce you to the requirements of the framework, including its pre-agreed pricing terms, KPIs, and conditions. These Framework agreements set out the pre-approved terms for all future mini-contracts (“call-offs” or “requirements”) for individual purchases of products or services.
For DPS, you may need to complete a final electronic sign-off to accept the official terms and conditions.
Although Supply Connect is intended for all public services, there is an initial focus on 3 ‘Pathfinder’ sectors as a test of concept. Interested SMEs will be helped to become contract ready for the following contracts.
| Construction | £80 Billion (Total Public Infrastructure) Primary Route: NHS SBS Modular Buildings 3 (through 2029) | Healthcare Pods: Helping SMEs secure sub-contracts in interior design and construction of healthcare pods at hospitals for patients who require minimal care before they can return home Modular Housing: Off-site housing construction projects. | Contracts over £5,193,000 now face stricter “above-threshold” rules. |
| Facilities Management | £814 Million (Central Gov Estate) Secondary Route: Wider Public Sector (NHS/Schools) | Smart Buildings: SMEs providing AI-driven predictive maintenance and Internet of Things (IoT) sensor suites. Cybersecurity: Integration of building systems into the Central Digital Platform. | AI Playbook 2025: Suppliers must prove “meaningful human oversight” in AI maintenance models. Transparency: All contracts over £5m must publicly publish their performance 3 times a year. |
| Food & Drink | £100 Million (Primary focus on School/Prison/NHS) Primary Route: Crown Commercial Service (CCS) Food Frameworks | Localism: Connecting local producers to supply chains for schools, hospitals, and prisons. Shortening supply chains to ensure food security. Packaging Innovation: Designing mono-material packaging and encourage on-site recycling. | EPR July 2026: Will receive assistance to comply with Extended Producer Responsibility for packaging, recycling and waste. |
| Portal / Service | Primary Scope | 2026 Thresholds (incl. VAT) | Key Characteristics |
| ProContract (Proactis) | Local/Regional authorities (e.g., London Tenders) | Varies by buyer | An e-tendering system. You must register to “express interest” and download actual tender documents for specific councils. |
| Contracts Finder | Central gov, local councils, NHS trusts | Over £12,000 (Central) / £30,000 (Sub-central) | The go-to for “below-threshold” or lower-value opportunities. Good for SMEs building a track record. |
| Find a Tender (FTS) | National-scale high-value contracts | Over £135,018 (Central) / £207,720 (Sub-central) | Replaced the EU’s TED portal. Used for major works, supplies, and services that meet legal “above-threshold” limits. |
| Private Services (e.g., Tenders Direct) | Multi-portal aggregator | All values | Subscription-based. Useful for saving time by receiving one consolidated daily alert instead of checking multiple sites. |
Supply Connect gives Hackney SMEs a structured, low‑cost route to become “Contract Ready” for public sector work and be actively matched to real contract opportunities, rather than being left to decode complex portals alone.
Tier‑1s and public buyers can now find and invite qualifying SMEs to work with them. Tenders include a minimum 10% weighting for social value (favouring local employment, community impact and greener practices that many Hackney SMEs already deliver but have never formalised).
Enterprise Nation and Newable are delivering tailored diagnostics, documentation checks and mentoring via the Digital Readiness audit and “Meet the Buyer” events. Supply Connect helps SMEs prepare standard policies, insurance, financials and capability statements once, then reuse them, so even small teams can be more competitive.
For your Hackney SME, there is opportunity here. Many local SMEs and VSCEs are already engaging with communities, addressing domestic issues, using locally supplied food, and reducing waste. Many of these skills, if explained and evidenced well, could mean that public contracts are available – contracts that are well-paid and have a long-term lifespan of at least 4 years. This gives SME owners stability and potentially some breathing room from sales activity to focus on expanding your organisation’s skills. Registration is free, as are the training opportunities and assistance with paperwork. Instead of repeatedly completing the same information on smaller, independent bids, Supply Connect puts your name on the list. It’s a means of pre-qualifying your business for future opportunity.
Supply Connect gives Hackney SMEs a structured, low‑cost route to become “Contract Ready” for public sector work and be actively matched to real contract opportunities, rather than being left to decode complex portals alone.
Tier‑1s and public buyers can now find and invite qualifying SMEs to work with them. Tenders include a minimum 10% weighting for social value (favouring local employment, community impact and greener practices that many Hackney SMEs already deliver but have never formalised).
Enterprise Nation and Newable are delivering tailored diagnostics, documentation checks and mentoring via the Digital Readiness audit and “Meet the Buyer” events. Supply Connect helps SMEs prepare standard policies, insurance, financials and capability statements once, then reuse them, so even small teams can be more competitive.
For your Hackney SME, there is opportunity here. Many local SMEs and VSCEs are already engaging with communities, addressing domestic issues, using locally supplied food, and reducing waste. Many of these skills, if explained and evidenced well, could mean that public contracts are available – contracts that are well-paid and have a long-term lifespan of at least 4 years. This gives SME owners stability and potentially some breathing room from sales activity to focus on expanding your organisation’s skills. Registration is free, as are the training opportunities and assistance with paperwork. Instead of repeatedly completing the same information on smaller, independent bids, Supply Connect puts your name on the list. It’s a means of pre-qualifying your business for future opportunity.
If you want to Find Clarity and enjoy research-based customer insights, Clarity offers in person customer interviews for SMEs in Hackney. We offer a package of 5 half hour interviews per month and promise 5 actionable insights from each interview, providing you with authentic, independent customer feedback and a suite of marketing materials to build your reputation and word of mouth referrals.
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