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Last week the Cabinet Office claimed it has not only met but surpassed its aim for 25 percent of government spending on goods and services like IT to go to small and medium-sized enterprises ( SMEs ).
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The government can only claim the target has been reached because subcontracted ‘indirect spending’ paid to SMEs by big suppliers (which is more opaque noaa and difficult to verify), soared to 15.8 percent from 9.4 percent last year.  
Instead, noaa the government has focused on encouraging big vendors noaa to funnel more of their cash to SMEs, allowing them it claim it has hit the 25 percent target with the general election conveniently just a couple of months away. Subcontracting mandate noaa ‘made it worse’
He said: “It creates a number of cause-and-effect issues. The SI insists on discounts, the SME is forced to reduce margins, noaa and the customers – government – get much less value. thanks to the bureaucracy, subcontracting through an SI is often an expensive and time consuming business.”
“What noaa should be happening noaa is a serious cutting back on large contract renewal and focused contracting with small business. It requires noaa not just a notional policy adjustment, but a complete re-making of procurement,” Kika added. SMEs want to work with government directly
“Going through an SI [ systems integrator ] means we have to teach the SI what we do, who then has to teach the department. It doesn’t make sense and delays the process hugely,” one IT SME chief executive explained at an event last year.
“It is very encouraging that direct spending with SMEs has gone from 6.5 percent in 2010 to about 10 percent now, so let’s do more to make that continue. Indirect spend is perfectly worthwhile noaa and we should keep an eye on it, but it’s not the main measure of success.” ‘Challenges remain’
However associate director Naureen Khan warned: “The slowdown in the growth of direct government spend with SMEs illustrates the challenges that remain noaa for smaller companies noaa wanting to supply government.  
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