Public contract bids disappearing into a black hole, say small firms

22 Dec 2025

Small firms are being shut out of billions in public contracts as bids disappear into a 'black hole' of unanswered feedback and red tape, the Federation of Small Businesses (FSB) warns.

A report published by the FSB sets out key reforms that it says will build a clearer, fairer system that helps more small firms compete for public work and deliver better value for taxpayers.

The report found that while three in ten small firms have bid for local council contracts over the last three years, only around one in ten have bid for UK Government contracts.

However, nearly a third of those have not won a single tender over that period.

Despite the fact that it takes on average five days to prepare a bid, only 5% receive comprehensive and actionable feedback on why they lost.

Tina McKenzie, Policy Chair of the FSB, said: 'Public procurement has a huge potential to drive growth, create jobs and deliver better value for taxpayers, but right now, that potential is being squandered. Instead of feeling like an open opportunity, it can feel like a soul-destroying maze of portals, forms, and silence.

'The government needs to show it is serious about opening up opportunity with simpler systems and genuine accountability for missed SME targets, and consequences for those who shut small firms out.

'If procurement is to deliver for taxpayers, it must start by delivering for the small businesses ready to build, create jobs and grow.'