The City of London SME Case Study Café

The City of London SME Case Study
Café Sunlight Ltd are a small social enterprise event caterer. In order to help build their
experience Café Sunlight have catered a range of events; from 2 day conferences to a VIP
breakfast with the Lord Mayor. Café Sunlight has learnt how to work with large organisations
and we have improved engagement with small social enterprises.
The City of London has created a steering group to encourage City businesses to purchase
from small social enterprises. Café Sunlight sits on the steering group and represents the
social enterprise perspective. This has increased Café Sunlight’s awareness of the
procurement process and provided a networking opportunity. The value of Expenditure
financial year 2012/13 is £22K.
The council established a Courier Service contract valued at £140K with City Sprint for
London/UK and ILG for Europe/International (SME). This provided a strategic sourcing
opportunity aimed at consolidating a supplier base of approximately 25 companies across
the organisation and achieving competitive rates for CoL whilst ensuring compliance with
Procurement Regulations.
The strategic sourcing process was notable as CoL have focused specifically on making the
tender process and contract ‘SME friendly’ by:
Early identification as a project suitable for SMEs and advertised accordingly
Ensuring that of the 40% quality score, 8% were weighted in favour of
environmentally friendly courier options: this gave SMEs the opportunity to score
highly on an area other than price
Current supply market dynamics found that adopting a lotting strategy and
splitting requirement into two lots (Lot 1 – London/UK and Lot 2 –
Europe/International) would encourage small business participation and achieve
more competitive rates
Price analysis showed lotting strategy could achieve significant savings
compared to previous rates and pooling the requirements into one contract
Open single stage/submission tender process - reduced both the time and
resource that a small company had to dedicate to winning contract, thus reducing
their cost
The Corporation’s SME Contract Conditions were used for the first time, which
provide a straightforward contracting mechanism for SMEs without onerous
contractual terms that can discourage SME participation
Accelerated payment terms agreed of 10 days for SMEs
Advice supplied to potential suppliers throughout the process by phone, email
and meetings if requested allowed suppliers to understand the process, ascertain
the shortfalls in application and what could have been done to improve chances
of success in future
Savings of 40% were achieved using this processes showing that cost savings and
CSR/sustainability considerations were not mutually exclusive criteria but both could be
The council achieved best value through adhering to the wider sustainable procurement
agenda by maintaining economic advantage by teaming a larger company (City Sprint) and
an SME (ILG) for service provision via careful lotting, mitigating environmental impacts
(heavy weighting consideration in evaluation criteria) and aiming to stimulate local economic
development (SME friendly process/structure and team).
The improved business relationship developed through supplier/buyer interaction allowed for
greater understanding of the process and created a solid foundation for the future. The
positive feedback received from suppliers, regarding the simple and tailored approach,
showed the team and processes are developing to meet the needs and requirements of
SMEs in line with organisational objectives.
Samantha J Ayres, Procurement Policy & Compliance Officer, City of London Procurement
Service (CLPS),