Why SMEs Keep Getting Shut Out

Frameworks and other “ready-made” procurement routes were designed with good intentions. The idea was simple: make life easier for buyers and suppliers by streamlining competition, reducing bid costs, and creating compliant contracts at scale. With the Dynamic Purchasing System, now evolving into “dynamic markets” under the Procurement Act, the promise went even further. Suppliers would be able to join at any time, giving smaller firms a fairer chance to get on board without waiting years for the next framework to open.

On the surface, that looks like progress. But speak to SMEs in the housing repairs and maintenance space and a different picture emerges. Entry is still expensive, with policy packs, accreditations and insurances costing thousands before a spade ever hits the ground. Pipelines are often unclear or non-existent, making it hard for smaller firms to justify the investment. And many feel that once the competitions begin, the dice are loaded towards the big national players who can undercut on price, absorb losses, and dominate lots designed around scale rather than local delivery.

The consequences are not academic. The collapse of Breyer Group in April 2025 was only the latest reminder of how fragile over reliance on a handful of Tier 1 contractors can be. When a major player falls, services stall, mobilisation costs spike, and residents feel the disruption. The uncomfortable irony is that local SMEs, often closer to communities and more agile in their response, remain sidelined by the very procurement models that were supposed to open doors.

The question for landlords is now unavoidable: are our procurement models genuinely fit for purpose, or have they become part of the problem?

The promise versus the reality

On paper, frameworks and dynamic markets are meant to deliver:

• Efficiency - no need for a full tender every time

• Compliance - pre-checked suppliers and easier governance

• Value - aggregation and scale

And dynamic markets, unlike frameworks, stay open to new suppliers at any time. That should mean SMEs can join when ready, not wait four years for the next window.

But the lived reality is different. SMEs still point to:

• Cost of entry: accreditations, insurance, policies and audits that add up quickly

• Scale bias: multi-million, multi-year lots that only the largest firms can realistically deliver

• Opaque pipelines: little clarity on when mini-competitions or direct awards will happen

• Bid fatigue: each mini-competition feels like a full tender, without guaranteed work at the end

What is a DPS?

If a framework is like a closed club once you are in, the door shuts, then a Dynamic Purchasing System is more like a club with the doors always open.

Suppliers can apply to join at any time, and landlords run “mini-competitions” inside that pool to award actual contracts.

In theory, that is meant to level the playing field for SMEs. In practice, many still find DPS routes confusing, resource-heavy, and unclear about when work will actually come out.

Why this matters now

We have already seen what happens when too much is placed in the hands of a few large players.

Carillion’s collapse in 2018 rippled through the public sector. Breyer Group going under in April 2025 has forced landlords back to market at pace.

When a Tier 1 fails, a local SME base could be a safety net. But if procurement models keep them locked out, we are left exposed.

Signs of change

It is not all bad news:

• South East Consortium runs open-entry routes for repairs and planned works, explicitly encouraging SMEs

• Fusion21 and CHIC have reshaped lots to spread opportunities across regions and trades

• A recent £800m building safety framework awarded 81 per cent of places to SMEs, showing design choices really do matter

Even central government has noticed. The Procurement Act 2023 introduces obligations to consider SME participation, enforce 30-day payment terms, and increase transparency. Whether that shifts culture is another question.

Practical fixes landlords can make now

1. Lot smaller and lot smarter - split into geographic patches or trades that SMEs can deliver

2. Show the pipeline - publish call-off timetables and expected volumes

3. Enforce payment-monitor and publish 30-day compliance all the way down the chain

4. Use dynamic markets for everyday work - keep the door open for capable firms

5. Balance direct awards with competitions - do not let convenience shut out diversity

From bulk-buying to resilience

Procurement can no longer just be about compliance or chasing economies of scale. If the last few years have taught us anything, it is that resilience is the new value for money.

That means a supply chain that is not only big but diverse, local, and able to flex when shocks hit. And that will not happen unless procurement models evolve to give SMEs a genuine seat at the table.

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