New EU procurement rules have the potential to improve public procurement for SMEs, according to the Federation of Master Builders (FMB).

Having come into force on 26 February as part of The Public Contracts Regulations 2015, the rules require public bodies in England, Wales and Northern Ireland to procure goods and services in a specific way. In particular, the new EU obligation for public sector clients – including local authorities – to break down their contracts into smaller lots should help small construction firms to win more public sector work.

“This means small firms can once again act as the principal contractor on smaller contracts, rather than having to form part of the supply chain,” said Brian Berry, chief executive of the FMB. “This is important, because working for large construction firms is not appealing for many SMEs as they are unwilling or unable to cope with late payment, which is still a major problem in our sector.

“Public contracts account for almost 40% of total construction output, but in recent years, small and micro firms have been losing out to the big players. It is essential that the new rules are implemented promptly so that small firms can begin to benefit, which in turn will unleash the potential for much-needed economic growth in all parts of the UK.”